Managing health supply chain risk through strategic outsourcing in low- and middle-income countries

Julia Perri, Giuliana Canessa Walker and Ségolène D’Herlincourt
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Julia Perri: Supply Chain Management Division, USA
Giuliana Canessa Walker: Chemonics, USA
Ségolène D’Herlincourt: GHSC-PSM, Zambia

Journal of Supply Chain Management, Logistics and Procurement, 2023, vol. 6, issue 1, 79-90

Abstract: This paper explores how strategic outsourcing of public health supply chain functions to private sector companies in low- and middle-income countries (LMICs) is a catalyst to reduce operational risks and achieve agility and efficiency. Private sector engagement in public health supply chains increases market competitivity, improves efficiency and allows for cost reduction, while enabling ministries of health to focus on their core competencies and become stewards of their supply chain operations. The paper highlights best practices on strategic outsourcing for contracting entities and third-party logistics (3PL) to minimise risk. Strategic outsourcing has become increasingly common across LMIC contexts as emerging economies take advantage of private sector growth; however, outsourcing does not automatically mean increased efficiency or transparency, unless it is done properly. Recommended best practices include ensuring transparent and fair competition; understanding market capabilities and geographical constraints, as well as available infrastructure; setting up key performance indicators; improving service agility; and creating the best distribution network for higher efficiency. The paper also presents three case studies, including lessons learned and results from strategic outsourcing in Zambia, Angola and the Democratic Republic of the Congo.

Keywords: private sector engagement; strategic outsourcing; risk management; supply chain for health; in-country logistics for health (search for similar items in EconPapers)
JEL-codes: L23 M11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jscm00:y:2023:v:6:i:1:p:79-90

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