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Chemonics News

News: Chemonics Responds to Devex Article

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Chemonics provides a response to an article about the challenges facing the Global Health Supply Chain – Procurement and Supply Management project (GHSC-PSM).

On August 25, Devex published an article entitled, “Exclusive: Documents reveal largest USAID health project in trouble,” reporting that the Global Health Supply Chain – Procurement and Supply Management project (GHSC-PSM) is experiencing issues in delivery and performance.

PSM is in many ways unprecedented — it is a complete integration of numerous complex health supply chains throughout the world. It has the potential to reduce costs and increase efficiencies in global and national supply chains, making the best use of U.S. taxpayer dollars.

However, the project experienced challenges as it started up, partially due to an abbreviated transition from previous supply chain projects. Other challenges included launching the project simultaneously in 33 countries and establishing new, more rigorous standards for on-time delivery.

Chemonics President and CEO Susi Mudge said, “Immediately upon recognizing the project was facing challenges, we owned our responsibility. Addressing these challenges is one of our top priorities. We believe we have made the necessary changes to ensure progress is made.” One foundational change was to restructure how the project itself functioned from a management perspective, including appointing Chemonics Executive Vice President Jamey Butcher to lead the implementation.

Throughout this process, our primary goal has been to ensure that medical supplies continue to reach those who need them the most. During the past nine months, since GHSC-PSM has been taking orders, the project has delivered or processed commodity orders to 55 countries valued at more than $790 million. There have been no delivery delays or stock-outs that resulted in or caused any patients to stop treatment. Recognizing the challenges in the new process, USAID and Chemonics took proactive steps to avoid such issues, including by working closely with other donors to bridge gaps and prevent stock-outs.

It is worth noting that GHSC-PSM has a much more rigorous definition for on-time in-full delivery, or OTIF, than previous supply chain projects. These differences make comparing OTIF rates among different projects difficult. In the third quarter of 2017, more than 95 percent of orders were delivered in full.

Chemonics is committed to the mission of GHSC-PSM: ensuring uninterrupted supplies of health commodities to save lives and create a brighter future for families around the world. Continual improvement is a central pillar of the GHSC-PSM program and we will work tirelessly with USAID to achieve a state-of-the art global health supply chain.