Establishment of El Salvador's New Health Logistics Management Unit

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Lead Paragraph/Summary

Complex supply chains often involve multiple government organizations to meet a country's health commodity's needs. Coordination between these government bodies is essential to ensure that the supply chain runs smoothly. In El Salvador, both the Ministry of Health (MOH) and the Social Security Institute (ISSS) play essential roles in managing the logistics that deliver critical health commodities to Salvadorans. The ISSS focuses on procurement and quality assurance processes utilizing a financially autonomous supply plan, whereas the MOH is solely dependent on government or donor funds. The ISSS and MOH serve distinct functions and focus on different supply chain areas; they also operate under and report to different management systems.

The USAID Global Health Supply Chain Program-Procurement and Supply Management (GHSC-PSM) project has worked with the MOH and ISSS institutions since 2016 to strengthen the supply chain and health systems. By working with GHSC-PSM over the years, both institutions have gained a greater understanding of the health supply chain's operational needs. This work has helped clarify the roles and interoperability of the institutions.

Familiarity with local institutions was particularly important following El Salvador's 2019 elections when the government's leadership underwent significant changes, including a new Minister and Vice MOH and ISSS Directorate. During the transition, GHSC-PSM and other partners played an essential role in ensuring supply chain management's continuity and implementing the supply chain master plan. The transition provided an opportunity to rethink the different supply chain entities' functions and streamline them further.

Supply chain challenges

GHSC-PSM's support to ISSS and MOH stemmed from previous supply chain assessments in 2014 and 2015 that revealed fragmented processes, a lack of leadership and accountability and a clear need for institutional collaboration. The assessments evaluated areas from health commodity forecasting to distribution to quality management and highlighted the following in their findings:

  • Inadequate oversight and standardization across supply chain areas, including commodity orders, price monitoring and product maintenance.
  • Insufficient distribution and control mechanisms at institutional levels.
  • A lack of streamlined purchase order processes, which resulted in imperfect forecast accuracy of centralized purchase orders.
  • The need for stronger coordination and integration of processes among logistics institutions to improve logistics capabilities, such as inventory loans or joint purchases.

There was a clear need for leadership to integrate the essential functions of supply chain work to ensure a system of defined checks and balances. The 2019 change in leadership presented a new opportunity to create a cohesive strategy between the MOH and ISSS, with a cross-cutting team to lead the effort. Together, they formed the logistics management unit (LMU) to support both institutions. The LMU enables collaboration and coordination of activities, maintains supplier relationships and monitors contracts with the individual buyers responsible for product records and planners responsible for inventory records. This would ensure compliance and implementation of supply chain best practices. At its core, the LMU would break down the historical barriers to coordination and logistics integration between the two institutions.

LMU formation process

GHSC-PSM in El Salvador worked closely with the government to shape the LMU, recommending the structure to address the supply chain gaps identified in the assessments directly. Following GHSC-PSM's proposal, ISSS designated key supply chain staff to work with the project on the first phases of the design, specifically operational changes and the definition of LMU scopes of work and job functions. By July 2019, GHSC-PSM shared its LMU proposal with the MOH, including the new Minister and Vice MOH. Both ISSS and MOH agreed to create the LMU and supported GHSC-PSM's finalization of the design and implementation plan.

“The proposed redesign of the ISSS organizational structure, including a logistics unit, will help us optimize resources, eliminate duplication of functions in different areas, and assign levels of authority and responsibility in the health supply chain,” said Dr. Carlos Flamenco Chief of Institutional Development Unit

Throughout the process, GHSC-PSM met weekly with ISSS staff from the Institutional Development Unit and Supply Chain Unit and MOH staff from the Logistics, Quality, Planification and Information Technology departments. These discussions were critical in developing proposed functions and responsibilities, reviewing job descriptions and selecting new staff to lead the new unit.

GHSC-PSM presented its final proposal in November 2019, which was approved that month by ISSS. GHSC-PSM continued working with the technical design team and supported the implementation of the new process. While the MOH transitioned in March 2020, GHSC-PSM continued to support and received complete approval from the MOH in August 2020.

The Salvadoran government's decision to implement the LMU was remarkably fast—only five months. GHSC-PSM's ongoing supply chain support and coordination helped establish the LMU. By January 2020, the ISSS incorporated the new organic structure, while the MOH did so by August 2020. GHSC-PSM will continue to support supply chain functions, integration and implementation in both institutions as processes change and transition to the LMU.

The main benefits derived from the creation of LMUs are long-term. They are associated with obtaining robust supply chains that respond more effectively to the needs of each institution. Now, they are capable of functioning as an integrated network, implementing innovative processes in demand planning, joint purchases, inventory management and differentiated delivery services, sharing their best practices, and contributing to the national health system's results. In the short-term, the LMU team is currently establishing standards and creating a standard operating procedures manual. As the LMU's resources and impact increase, so will its ability to improve patient's access to critical health commodities and quality health care services responsively and effectively.

LMU Timeline

June 2019: Approval of GHSC-PSM’s proposal by ISSS

July 2019: GHSC-PSM shares proposal with MOH

August-October 2019: GHSC-PSM work with MOH and ISSS to establish an LMU plan

November 2019: GHSC-PSM presents final proposal to ISSS and MOH

November 2019: ISSS Plan is approved

January 2020: ISSS incorporate new organic structure of LMU

August 2020: GHSC-PSM receives full approval from MOH and incorporation of new LMU organic structure