UNICEF`s Plumpy` Nut Supply Chain - UNC Kenan

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UNICEF`s Plumpy` Nut Supply Chain - UNC Kenan
 UNICEF’S PLUMPY’ NUT SUPPLY CHAIN
Author
Jayashankar M. Swaminathan, Senior Associate
Dean of Academic Affairs and Glaxo Distinguished
Professor of Operations, Technology and
Innovation Management (OTIM)
Publication Date: 2009
©2009 Kenan-Flagler Business School, University of North
Carolina, Chapel Hill, NC, USA. Reprinted by permission.
Available online at www.cse.unc.edu. Clarifications or comments
may be directed to [email protected]
UNICEF’S
PLUMPY’ NUT
SUPPLY CHAIN
A TEACHING CASE FROM THE
UNIVERSITY OF NORTH CAROLINA’S
KENAN-FLAGLER BUSINESS SCHOOL
UNICEF Plumpy’Nut Supply Chain
Paul looked around the round table in the conference room at Copenhagen. Peter Hailey, a nutritional
coordinator at the Regional Office was on phone with a representative from one of the donors while Emma
Maspero, a logistics officer at the Somalia Country Office was lamenting the lack of visibility to Plumpy’Nut
orders once they cross into Mogadishu and beyond. As soon as the call was over, Peter began in earnest to
continue with his previous point. “We need to get funds in earlier; this should solve most of our problems.
ECHO has agreed to meet us next week to discuss funding for the next fiscal year, let us show them why we
need to change the way funds are currently distributed.” Emma chimed in at that time, “That sounds like a
good plan, we could talk to them about investing in a buffer stock, but we need to first decide where to hold
them” pointing to the cost benefit analysis of holding buffer stock at various warehouse locations that Jurgen
had earlier passed out. Noreen Prendivilee from the Somalia Country Office frowned at this. “How does that
help anyone? Are we not just tying inventory up at warehouses? How does that help us get deliveries any
earlier? No wonder we try to hold some safety stock at our district warehouses.” Lars Jensen from the Regional
Office stated: “What we need is a safe warehouse that is easily accessible. Even while all countries border each
other, we cannot do transshipments. Neither can we hold more than 45 days of stock at the Mombasa port. On
the other hand we have some spare space at the warehouse in Jebel Ali that could be made use of.” Paul
listened carefully to all the thoughts and said, “We have all the data. What do we do next?”
Background Information on UNICEF Plumpy’Nut Supply Chain
A week before the round table meeting, on a late Thursday evening in September 2008 Jurgen Hulst was
having an urgent meeting with his manager Paul Molinaro1 on the recent delays and alarming increase in costs
of delivery of nutritional emergency products to key affected regions in Ethiopia, Kenya and Somalia. In a
typical case, an order placed in early May 2008 for 1000 cartons of RUTF (Ready to Use Therapeutic Food) or
Plumpy’Nut was still shown to be enroute in the system. Paul could not quite understand how a product, with
an estimated delivery time of 2 months, could still not be delivered 4 months later. Earlier in the week, Paul
had finally agreed to airlift supplies from France to Ethiopia to cover for this shortage, and this was just one of
the many unanticipated air shipments that were being made recently. Recent field reports indicated a severe
shortage of supply in district offices and feeding centers. As a result, some of the NGOs on the ground were
considering direct procurement from the producer to get faster deliveries, a far more costly proposition.
Correspondingly, a sudden buildup of new orders was observed that originated from the Country Offices of
Kenya and Somalia. From a recent meeting with Nutriset (producer of RUTF), Jurgen knew that production
was operating close to capacity which left him wondering how they would satisfy this spike in demand
without incurring any additional delays. UNICEF’s current operations in the Horn of Africa involved delivery
of nutritional products to children in need that would otherwise starve to death. Constant delays and rapidly
increasing costs of delivery not only caused UNICEF to miss its targeted coverage but also led to frequent
budget overruns. Paul had called Jurgen to understand the causes for these delays before the next regional
meeting with nutrition and logistics officers from Kenya and Somalia. Jurgen was aware that the long and
variable lead times were leading to poor performance of the supply chain, and this occurred frequently even
after months of meticulous planning. He wondered what would cause such high variability and how UNICEF
could address it to make the supply chain more efficient and responsive. An end to end supply chain analysis
was essential to obtain constructive solutions to the problem at hand.
1
Organization Structure is depicted in Exhibit 7 © Swaminathan 2009. This case was prepared by Professor Jayashankar Swaminathan with the help of doctoral student Vidya Mani as a basis for class discussion rather than to illustrate good or bad administrative practices. 2 Nutritional Emergencies in Horn of Africa
The Horn of Africa has been the focus of humanitarian efforts in recent years due to the continuous escalation
in natural and man-made disasters, leaving many children in a state of severe acute malnourishment (SAM).
Regional drought, flooding and wide spread civil strife have led to reduced crop yields as well as a rise in
overall food and fuel costs. This situation is most severe in countries of Kenya, Somalia and Ethiopia. For
example, in the past year alone prices of basic food commodities in Kenya had increased by almost 40%. In
Somalia, where an estimated 52% of the population is under the age of 18, inter and intra clan conflicts as well
as lack of adequate government infrastructure make it highly vulnerable to natural and man-made
emergencies. Ethiopia has seen similar political tensions and internal conflicts that have led to large scale
violence and left many people stranded with no amenities. Rampant poverty and poor sanitation add to this
creating widespread malnutrition amongst children in the country.
UNICEF
In emergency situations, humanitarian organizations like the United Nations Children’s Fund (UNICEF) help
in disbursing necessary food and medical supplies to children in need. Created in 1946 right after World War
II, UNICEF is mandated by the United Nations General Assembly to advocate for the protection of children's
rights, to help meet their basic needs and to expand their opportunities to reach their full potential. It is guided
by the Convention on the Rights of the Child and strives to establish children's rights as enduring ethical
principles and international standards of behavior towards children. UNICEF’s Medium Term Strategic Plan
for 2006-2009 identifies Young Child Survival and Development as the first right of the child.
The Supply Warehouse of UNICEF came into being in 1953 in the basement of the United Nations building in
New York. From the earliest days of UNICEF, the supply operation has been a major instrument for the
implementation of various UNICEF-assisted programs. Nine years later, in 1962, the storage, packing and
assembly functions were moved to Copenhagen. When operations began in Copenhagen, the value of the
annual throughput of the packing and assembly operations was between US $2 and 3 million centered on the
functions of warehousing, packing and shipping. As of 2005, the total global procurement was over US $1
billion. The UNICEF Supply Division is responsible for all supply functions related to various internal
programs as well as other externally funded programs. It has staff working in 158 Country and Regional
Offices worldwide as well as at the Supply HQ in Copenhagen, Denmark. It also oversees a supply section in
New York and warehouse hubs in Dubai, Panama and Shanghai. Upstream activities (assessment,
procurement, and shipping) as well as downstream activities (customs, storage, distribution) for all emergency
relief products are managed by UNICEF Supply Division, along with country and regional offices. In most
countries, UNICEF works in partnership with local communities, numerous national and international NGOs,
multi-lateral organizations, funding agencies, local administrations, civil society and the private sector, as well
as in close coordination with the UN Country and Regional Teams.
Plumpy’Nut (Ready to Use Therapeutic Food)
As part of a new strategy to combat the rapidly deteriorating nutritional health status of children, UNICEF
along with other humanitarian organizations facilitate the provision of Ready to Use Therapeutic Food sachets
to severely malnourished children. RUTF are portable, shelf-stable, single-serving foods that are used in a
prescribed manner to treat children with Severe Acute Malnutrition (SAM). In the current scenario, where
RUTF is used for treatment of severely malnourished children, primary screening for nutritional status is
conducted by community members using a simple armband that associates arm circumference with level of
malnutrition. Only those children classified with SAM are then referred to a health facility. Children with
3 complicated cases of SAM are treated in a hospital in-patient setting, while those with uncomplicated SAM are
given home-based care with periodic check-ups at the health facility. The shift from treating severely
malnourished children in hospitals to treating them in community-based programs signals not only a strategic
change in nutrition policy, but also presents challenges in the supply of ready-to-use therapeutic foods (RUTF)
due to increasing demand in strife torn countries (Exhibit 1). A recent article in Science Magazine (October
2008) highlighted the considerable debate amongst various nutritional professionals if RUTF should also be
used in prevention of SAM along with its current use in treatment of SAM. Some non-governmental
organizations like Medecins Sans Frontieres (MSF) vociferously advocate distribution of RUTF to all children
in a disaster affected area, thereby arresting any incidence of severe acute malnutrition. On the other hand
many skeptics including the World Health Organization (WHO) believe that other products are needed for
prevention. One of the factors fueling this debate is the high cost of delivery and limited worldwide capacity
for production of RUTF.
The type of RUTF purchased most often by UNICEF is called Plumpy’Nut, an oil-based paste of peanuts, sugar
and milk powder. Plumpy’Nut is packaged in foil sachets weighing 92 grams, each containing 500 kilocalories,
which are then packed into cartons weighing 13.8 kilograms each. They come prepared and correctly dosed,
are not water-based and hence do not as easily host contaminants. Depending on a child’s weight, a protocol
details how many packets of Plumpy’Nut will be needed per day to treat a malnourished child. A caretaker is
typically given one or two week’s worth of Plumpy’Nut to take home, and is asked to bring all empty packets
back during the next follow-up appointment. This product has a shelf life of 2 years. In case of delivery,
UNICEF works closely with the Ministry of Health (MOH) in Kenya, as well as Non-governmental
Organizations like European Commission’s Humanitarian Aid Office (ECHO), U.S. Agency for International
Development (USAID), UK Department of International Development (DFID), World Food Programme (WFP),
Clinton Foundation, Medecins Sans Frontieres (MSF) and Action Against Hunger (ACF).
Plumpy’Nut Supply Chain
UNICEF and its partners maintain estimates of Plumpy’Nut need in their communities, based on demographic
information combined with partners’ knowledge of their projects. The order planning process starts when a
Ministry of Health or an NGO partner identifies a specific need for Plumpy’Nut among severely malnourished
children in its area. The partner then assesses how much Plumpy’Nut is required for treating these children,
and relays this information either directly to the UNICEF country office (as in Somalia) or to the Ministry of
Health and then UNICEF (as in Kenya).
Typically, there are two types of orders for Plumpy’Nut: Non-Emergency and Emergency. Non-emergency
orders are planned in advance. These comprise nearly half of all orders placed by Kenya and Somalia Country
Offices. Often these orders are entered into UNICEF’s order tracking system months in anticipation of actual
need. Non-emergency orders are typically shipped via sea freight. Emergency orders are expedited orders
placed due to an unexpected increase in the need for Plumpy’Nut. Many emergency orders are shipped via
air freight, to any location in the world within a few days.
Most Plumpy’Nut (RUTF) is made in Malaunay (France) by a company called Nutriset. It has several
franchises around the world that also produce RUTF products, but on a small scale. Current agreements with
Nutriset entail a commitment to deliver Plumpy’Nut within one week from receipt of purchase order and that
there should be a minimum of 18 months shelf life remaining when the product is delivered to the global
logistics provider. Once Plumpy’Nut has been manufactured and packaged, Kuehne+Nagel (K+N), a global
4 logistics supplier, delivers the product to the port of export for sea freight at Le Havre (France), and to Paris for
air freight to the destination country.
Product, Funds and Information Flows
The product flow for Plumpy’Nut starts when it is shipped globally from Nutriset by Kuehne + Nagel, Scan
Logistics or DHL, then transported from the port of arrival by local logistics suppliers and distributed by
implementing partners in country (Exhibit 2). Kenyan and Somali orders of Plumpy’Nut have largely been
shipped via sea so they travel via a transshipment port to Mombasa from France. Upon arrival at Mombasa,
the containers bound for Kenya clear customs and are then transported by truck to the UNICEF warehouse in
Nairobi. From here, the product is released for distribution to the districts, where the District Nutrition Officer
and/or NGO partners store the product until it can be used to treat children with severe acute malnutrition.
The Plumpy’Nut that is provided to partners in Somalia is held at a bonded in-transit warehouse in Mombasa
until a local freight forwarder can move it to Somalia. This usually happens by sea, from Mombasa to
Mogadishu. In some circumstances, the product is moved by land from the Mombasa warehouse to parts of
Somalia. In most situations in-country transportation is hampered by poor road conditions and security
concerns. The product is then held at UNICEF warehouses until partner NGOs request deliveries of
Plumpy’Nut for children in their catchment area. The product flow for Ethiopia is similar to that of Kenya with
K+N transporting the products from France to Addis Ababa and from there on to the district warehouses.
For UNICEF, the funding process begins with the Country and Regional Offices. Donors examine proposals,
assess need on the ground, and decide which proposals as well as amount to fund. Once Country Offices have
the funds lined up, they can submit purchase requisitions for Plumpy’Nut. When a purchase requisition is
submitted, funds are transferred to Supply Division to pay for the product and global transportation costs.
When a producer receives an order, they generate an invoice which is submitted to Supply Division. Freight
forwarders also submit invoices directly to Supply Division once they have picked up an order for transport.
Supply Division pays invoices received from producers and freight forwarders using Country Office funds.
Supply Division is responsible for payment of global transportation—from point of production to the point of
entry (port if by sea or airport if by air). In most cases, in-country transportation is paid for by Ministries of
Health and implementing partners, and at times supplemented by funds from UNICEF (Exhibit 3).
Forward information flows, such as projections of need, order processes, and financial information, and
backward information flows, including stock monitoring reports, quality information, and performance data
occur as needed (Exhibit 4). The information flow on orders, on the basis of need and forecasts, flow upstream
from field officers and Country Offices to the Supply Division and Nutriset while downstream flow of
information on delivery times and order status is highly fragmented. Kuehne+Nagel, responsible for the
shipments from Le-Havre to Mombasa, has an online system for tracking shipment data while its office in
Nairobi sends weekly reports that are made accessible to the Country Office. Each stakeholder in the supply
chain has its own information system in place, for e.g. UNICEF’s Supply Division uses SAP, Country Offices
use ProMS and warehouses use UniTrack, while Kuehne+Nagel uses CEIL and Scan Logistics uses
TWM/LWM.
Complexities in the Plumpy’Nut Supply Chain
Variable lead time
Variable lead time makes it extremely hard to predict arrival dates for orders. Typically, many orders receive
an amendment for an adjusted Target Arrival Date (TAD), an extension due to some foreseeable interruption in
5 the supply chain (Exhibit 5). Transportation of Plumpy’Nut from Le Havre/Paris to Mombasa is one of the
longest and most variable steps in the supply chain, regardless of whether the shipment is classified as an
emergency or non-emergency order. For example while pure sailing time from Le Havre to Mombasa, without
interruptions is 25 to 27 days, non-emergency orders sent by sea to Mombasa since 2005 have experienced on
average transportation lead times of 34 days (with a range of 27 to 46 days - Exhibit 8). Congestion at the port
of arrival in Mombasa and issues with regulatory paperwork are cited as frequent problems when bringing
goods through the port of Mombasa. For example even though UNICEF Country Offices work closely with
MOH - Kenya to obtain speedy clearances, this process could take up to 16 days. Additionally, there is usually
a 30% backlog of orders at the customs office in Nairobi. In contrast, the average delay for customs clearance at
Dubai, where UNICEF houses other emergency supplies like vaccines etc., is only a few days. Orders bound
for Somalia frequently face a number of potential disruptions during transport from Mombasa to Mogadishu,
and then to UNICEF warehouses and beyond. Other disruptions include the recent port strike at Le Havre and
the post election violence in Kenya (Exhibit 6). As a result of variable lead times the cost of transporting
Plumpy’Nut from France to eastern Africa has significantly increased. For instance, between January of 2007
and October of 2008 air freight to Kenya or Somalia cost, on average, $2.40 per kilogram; by contrast, sea
freight cost an average of only $0.17 per kilogram. From May to September 2008 air freight was used for 33% of
emergency orders and 21% of non-emergency orders to Kenya and Somalia. Air shipments become necessary
because complex geo-political issues prevent transshipment between Ethiopia, Kenya and Somalia. When the
Mogadishu warehouse at Somalia was cut off, corresponding quantities had to be airlifted from France to
prevent any shortages.
Single dominant world supplier for Plumpy’Nut
By the end of 2008 demand for Plumpy’Nut matched Nutriset’s capacity to produce (Exhibit 9). Over the next
two years, worldwide demand for Plumpy’Nut is expected to grow at a rate of 30% per annum (UNICEF’s
demand alone is expected to increase by 35% a year). In order to meet this surge in demand, Nutriset intends to
double its production capacity for Plumpy’Nut sachets to 30 MT/year in 2009, 50.3 MT in 2010 and 96.7 MT in
2011. There are also ongoing efforts to increase the worldwide production capacity for Plumpy’Nut. Nutriset
has provided license agreements to franchises in several countries, and UNICEF is actively seeking new
sources of Plumpy’Nut. However, these new manufacturers may face some challenges as they come on line,
including a reliance on international sourcing of inputs (which may be more costly in future), the potential role
of patent protection on the Plumpy’Nut product and production process, and logistical difficulties in scaling
up production including raising capital funds, procuring equipment and securing contracts.
Uneven funding
Stakeholders in the Plumpy’Nut supply chain are not only affected by the unpredictability in the magnitude of
funding, but also by the timing of receipt of funding throughout a 12-month cycle. Nutrition Officers often cite
unreliable funding as a major roadblock to efficient procurement planning. The staggered distribution of funds
leads to uneven ordering and makes it difficult for Nutriset to plan its production ahead of time. Non
emergency orders are generally planned ahead of time, but are sent for production only when production can
be scheduled at Nutriset leading to uneven capacity utilization and large variations in production lead time
(see exhibits 10 and 11). Complicating the funding picture, nutrition interventions are customarily viewed as
non-emergency programs. A country is considered to meet official emergency standards when greater than 15
percent of the population suffers from Global Acute Malnutrition (GAM). Under less dire circumstances or on
the road to recovery from famine, Country Office personnel report that it is much more challenging to raise
funds for their ongoing “low-grade emergencies.” Since most donor funding is geared towards relief of both
immediate and long-term emergencies (as opposed to prevention), Plumpy’Nut is usually only purchased with
funds allocated for emergency interventions.
Different methods for forecast generation and seasonality effects
6 There are many ways to collect data for forecasting but these can be inconsistent in methods and quality
(Exhibit 12). When different methods of nutrition forecasts are being used across stakeholders to assess how
many children are severely malnourished that may require Plumpy’Nut, they may yield entirely different
estimates of demand, ordering projections, budgeting and program coverage. Depending on the location that
UNICEF partners are implementing their programs, using national-level data could predict twice or less than
half, as many children who truly require Plumpy’Nut in the district. In addition to different methods of
forecasts, seasonality is often not captured in forecasts despite its importance in driving malnutrition. As
guidelines on forecasting methods change so could the demand projections. Thus, demand for Plumpy’Nut
could be highly variable depending on the implementing partner that assesses need for Plumpy’Nut and the
forecasting method used to do so.
Inadequate Information amongst Supply Chain Partners
Additional challenges to information flow involve the collection and transfer of information across the supply
chain. First, current systems that collect information are sometimes stand-alone systems so data is only visible
to a subset of stakeholders. Second, backward information flow, including reports on handover and feedback
on quality, is either unavailable or nontransparent. The Kenya and Somalia Country Offices do not regularly
receive information on the status of their orders (e.g. if the order is under production, delivered for shipment
or delayed). There is little data visibility into inventory below the country-level warehouse, and it was reported
that field officers often do not communicate stock and consumption data to Country Office program officers. A
notable exception to this is a new RapidSMS program, implemented by UNICEF in Ethiopia, Uganda and
Malawi to track nutrition program admissions and Plumpy’Nut stock levels. Though only in pilot stage, the
project has shown promising results as an inexpensive way to rapidly collect important data across a wide
geographic area. The RapidSMS system allows each feeding site to instantly transmit information to UNICEF
on how much Plumpy’Nut they have received, how much remains in stock, and how much has been
dispensed.
Future Supply Chain
Today all officers from nutrition, logistics and supply division have gathered to discuss how to shape the
future supply chain. They each had a copy of the data on delivery lead times, cost benefit analysis on holding
buffer stock at various locations as well as the demand and capacity for Plumpy’Nut over the past three years.
There were two main questions on the agenda for everyone to answer.
1.
2.
Whether or not to hold any buffer inventory and if yes, where to hold the buffer inventory (Mombasa
or Jebel Ali)?
How to smooth order patterns for Plumpy’Nut?
7 Exhibit 1: International order volumes of Plumpy’Nut® by UNICEF Country Offices, 2004-­‐2008 Countries experiencing nutrition emergencies, including Ethiopia, Sudan, Niger, and Malawi, are consistently among those with the largest orders. There have also been a greater number of countries placing orders for RUTF, since 2005. 8 Exhibit 2: Detailed product flow for Plumpy’Nut Exhibit 3: Detailed funding flows in the Plumpy’Nut supply chain Exhibit 4: Detailed information flows in the Plumpy’Nut supply chain UNICEF’s activities are in blue; partners’ inputs in green. 9 Exhibit 5: Reasons for amendment to orders for Plumpy’Nut from all country offices, 2005-­‐2008 Exhibit 6: Lead times for Plumpy’Nut shipped before, during and after Le Havre strike and Kenya post-­‐
election violence 10 Exhibit 7: UNICEF Organizational Structure:
UNICEF Supply Division Regional Office (ESARO) Country Office Paul Molinaro Nutri]onal Officers Logis]c Officers Jurgen Hulst Kenya -­‐
Noreen Prendiville Somalia -­‐
Emma Maspero Regional Head of Supply Nutri]on Coordinator Regional Logisitcs Officer Peter Hailey Lars Jensen 11 Exhibit 8: Average lead times for order delivery to Ethiopia, Kenya and Somalia (2007 – 2008)
Non- Emergency Orders
Supply Division
Lead time for Ethiopia (days)
Average
Min
Max
Emergency Orders
22
2
35
Supply Division
Average Min Max
5
2
10
Production Lead Time
Nutriset Port Preparation
Paris to Addis Ababa
Total Time to deliver
33
0
75
Production Lead Time
38
7 79
5
0
55 Nutriset Port Preparation
10
0 41
5
2
42
Paris to Addis Ababa
2
0
5
44
Total Time to deliver
50
Lead time for Kenya (days)
Non – Emergency Orders
Average
Min
Max
Emergency Orders
Average Min Max
Supply Division
11
2
30
Supply Division
5
2 10
Production Lead Time
18
1
38
Production Lead Time
10
4 25
Nutriset Port Preparation
30
28
32 Nutriset Port Preparation
2
0
4
K+N Order Preparation
10
8
11 K+N Order Preparation
10
5 15
Le Havre to Mombasa
35
28
45
Le Havre to Mombasa
30
25 45
Customs + Transport to Warehouse
5
0
5
Total time to deliver
50
Warehouse to End Location
8
1
5
Total time to deliver
75
Lead time for Somalia (days)
Non- Emergency Orders
Average
Min
Max
Emergency Orders
Average Min Max
Supply Division
15
5
75
Supply Division
5
2 17
Production Lead Time
35
7
52
Production Lead Time
10
5 22
Nutriset Port Preparation
5
0
10 Nutriset Port Preparation
2
1
3
K+N Order Preparation
15
7
19 K+N Order Preparation
15
10 18
Le Havre to Mombasa
35
25
40
Le Havre to Mombasa
25
22 30
Transshipment in Mombasa
10
7
11
Total time to deliver
50
Mombasa to Warehouse
45
25
90
Total time to deliver
85
Exhibit 9: Yearly demand (MT) for Plumpy’Nut
Demand in MT (yr)
2008
2009 (Projected)
2010 (Projected)
Total demand for Plumpy’Nut
13560
18000
23400
Demand from UNICEF
9529.215
13000
19800
Nutriset Capacity
16600
36000
36000
12 Exhibit 10: Nutriset Capacity utilization by UNICEF in 2007-2008
Month - 2007
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
% of capacity utilized
8.88%
32.13%
37.84%
61.61%
40.18%
20.24%
Month - 2008
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
% of capacity utilized
6.22%
8.33%
42.60%
39.89%
61.02%
92.55%
74.19%
60.09%
106.61%
Exhibit 11: Production Lead time for Emergency and Non-emergency orders
Month
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Order Volume
(MT)
Global Production Lead Time
Average
28.33333
22.14286
3.8
22.5
21.33333
33.42105
28.45455
14.125
26.36364
21.05
70.69231
44.6
27
31.10526
39.21429
25.95652
28.0625
49.075
31.48148
29.75
Min
6
5
2
2
5
8
10
2
4
3
6
6
4
2
3
2
1
2
5
3
Max
71
63
6
142
95
84
108
63
208
87
293
116
63
201
129
90
71
111
74
52
Std Dev
36.96395
20.13644
1.32916
35.86655
22.8494
22.48616
28.41255
14.31025
48.21731
22.11191
100.4394
45.15307
23.13388
44.92821
41.55104
26.28598
19.0533
28.53193
18.40596
16.36282
12.3372
124.6278
157.7064
214.5072
713.598
185.9688
144.5274
526.1526
355.2534
530.1132
584.8992
159.5832
318.3108
658.1358
398.2542
5136.291
3282.123
7459.976
2732.483
7571.687
13 Exhibit 12: Forecasting methods use by different groups
Group
Implementing NGO
Forecasting Method
Number of admissions, amount of Plumpy’Nut
consumed; nutrition status
Number of admissions, amount of Plumpy’Nut
consumed
Malnutrition status in country/districts
Historic trends of Plumpy’Nut consumption
Trends in ordering, qualitative projections
Food security/nutrition status in districts
Malnutrition statistics; historic trends of Plumpy’Nut
consumption; weather, other food security trends
Ministry of Health
UNICEF Country Office and Regional Office
UNICEF Supply Division
Plumpy’Nut producers
Multilateral groups (e.g., FEWSNET, FSAU)
Donors
Exhibit 13: Average lead time for Plumpy’Nut delivery and Investment Cost for maintaining buffer stock
Buffer Stock
Average lead time for
Investment
Level (MT) Plumpy’Nut delivery (weeks) (Cost)
Mombasa
Dubai
0
6
6
0
100
5.75
5.25
600,000
200
4.25
3.9
1.1 M
300
3.1
2.8
1.6M
400
2.2
2.2
2.1 M
500
1.8
2
2.6 M
600
1.78
2
3.1 M
700
1.77
1.9
3.6 M
800
1.77
1.9
4.1 M
900
1.77
1.9
4.6 M
1000
1.77
1.9
5.1 M
Exhibit 14 a: Supply Chain Times for PO 4401
Supply Chain Process
Supply Chain Times
Order Time
0
Purchase Order-Material Ready
6
Le Havre
13
Le Havre to Mombasa
52
Customs + Transport to Warehouse
Warehouse to End Use Location
11
100
14 Exhibit 14 b: Stock levels of PO 4401 at the Mombasa Warehouse
Date of Stock - Keeping
05/09/08
Remaining Quantity at
Warehouse
998
5/15/08
5/19/08
858
752
7/31/08
531
8/1/08
220
8/5/08
82
Exhibit 15: Sachet of Plumpy’Nut
15 Exhibit 16: Map of Europe, Africa and Mid East
France Dubai Ethiopia Somalia Kenya 16 Questions to Consider:
1.
2.
3.
What are the key differences between a commercial supply chain and a humanitarian supply chain?
Consider a situation where Paul commits to the establishment of a buffer inventory stock
a. What do you think are the advantages of implementing a buffer stock policy?
b. Which location would you choose for location of buffer stock and why?
c. What level of buffer stock would be ideal and how much investment would be needed to do
so?
d. Are there any alternate arrangements that you would propose for location and distribution of
buffer stock?
What other suggestions would you recommend to UNICEF that would help improve the performance
of Plumpy’Nut Supply Chain?
17