KEMSA Adopts New Policy to Tighten Inventory Management

The Kenya Medical Supplies Authority’s (KEMSA) has adopted a new inventory management policy with an aim of enhancing its organizational integrity and efficiency.

Through the new policy, the KEMSA board plans to ensure adherence to optimal stock holding levels and see the Authority’s stockholding exposure reduced from Kshs 14 billion to Kshs 9 billion worth of health products and technologies (HPT) inventories.

Speaking when she confirmed the revised policy adoption, KEMSA CEO Terry Ramadhani said the policy aligns with the Ministry of Health National Health Products and Technologies Supply Chain Strategy 2020 – 2025.

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The adoption of the new policy, she said is part of the KEMSA three-pronged reforms and corporate transformation which focuses on driving operational excellence, enhancing customer experience and repositioning the organization.

This fi­nancial year, KEMSA has dispatched Ksh25.5 Billion worth of Essential Medicines and Medical Supplies (EMMS) and National Health Strategic Programs (NHSP) supplies to more than 8,741 health facilities countrywide. Last week, more than 235 health facilities in Makueni County received Kshs 37.6 million essential medicines from KEMSA following a consignment flag-off witnessed by Governor Prof Kivutha Kibwana.

The revised KEMSA Inventory Management policy, she added, would accelerate efforts to transform the central Nairobi Warehouses at Embakasi into a fully-fledged National Distribution Centre. The national distribution centre will feed HPT supplies to the regional centres in Mombasa and Kisumu as the Authority seeks to decentralise its operations.

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As part of the Inventory management policy revision, the Authority has also prioritised the automation of various supply chain processes to improve end-to-end visibility.

“The reforms agenda to firmly position KEMSA as the lead government supply chain agent for HPTs remains firmly on course, and we are happy to celebrate the reduction of the order turnaround time from a high of 46 days in February last year to an average of 12 days as of last month,” Ramadhani said.

“These developments have been facilitated by the recent adoption of a revised Inventory Management policy and strict adherence to the key warehouse and logistical processes outlined in the policy.”

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KEMSA is also enhancing the use of the framework supply contracts model, allowing for the staggered delivery of supplies as part of the adoption of world-class inventory management practices. Adopting revised Just in Time (JIT) inventory management procedures, Ramadhani said, will help curb the risk of holding slow-moving stocks that lead to wastage as short shelf-life products expire.

She further added that the Authority has advanced use of Information Technology (IT) systems to support organisational agility and simplify business processes to improve the Order Fill Rate. KEMSA has made significant progress on this front, with the order turnaround time reducing from 46 days in February 2021 to 12 days at the end of May 2022.

KEMSA recently announced that it had turned a new page in its procurement excellence journey with the formal activation of an automated purchase order generation system. As part of its transformation journey, which includes integrating information technology systems, KEMSA has unveiled an electronic Local Purchase Order (LPO) generation process. The automation of the Procurement process and elimination of manual procedures that require human intervention, such as the issuance of LPO, is also part of the Authority’s ethics and integrity assurance strategy.

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“Automating the LPO issuance process will ensure that we eliminate the time spent for suppliers to pick the physical copy before making deliveries of medical supplies,” explained Ramadhani.

“Such automation also eliminates the need for human intervention, which has been a key organisational integrity risk area,” she added.

“Soon, we will also automate contracting so that suppliers don’t come to KEMSA to sign the contracts, but rather they shall be emailed to them for their perusal and signing before submitting to us. By doing this, we will reduce the delays that occur when the signing parties are not available at the same time,” she assured.

Further, all LPOs will have an expiry date to tame the delays witnessed when suppliers took too long to deliver under open-ended delivery timelines.

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