Effect of cycle time and supplier lead time on timely procurement of medicines in Tanzania: A case study of the Medical Stores Department

Abstract

Introduction This study was conducted to determine the effect of cycle time and supplier lead time on timely procurement of medicines in Tanzania. This study drew on the case study of the Medical Stores Department (MSD) which is the Government of Tanzania’s procuring entity.

Methodology The study used both quantitative and qualitative methodology. Descriptive and inferential statistics such as mean and regression analysis were used to analyze the data with the help of SPSS version 25.

Results Regression results showed that cycle time and supplier lead time affect timely procurement of medicines by increasing the total time taken for the PE to receive medicines from suppliers if all steps and activities are not processed on time as well as when goods are delayed from suppliers. Thus PO cycle time influences timely procurement by 34%, payment processing time influences timely procurement of medicines by 26% and supplier lead time influences timely procurement of medicines by 40%. Internal and external factors were identified to affect timely procurement of medicines. Internal factors included MSD based delays while external factors include Supplier Based delays and other factors. Internal factors which are MSD based delays were rooted in PO Cycle delays and Payment processing delays which included delays in concluding tender procedures, inadequate staff performance recognition, poor supplier management and delays in opening letters of credit. and on the other hand, external factors that are supplier based delays were rooted in noncompliance with contracts and delays in clearance of shipments by GPSA at the port of entry also other included delays in government’s funding disbursement, delays in contract vetting by the Attorney General and delays in clearance of shipments at the port of entry by GPSA under CFR, CIF and FOB incoterms.

Conclusion Timely procurement of medicines was found to be affected by cycle time (PO cycle time and payment processing time) and supplier lead time. Any change in these variables could have a significant impact on timely procurement of medicines, resulting in delays in the receipt of goods. MSD is in a better position to ensure that most delays are avoided, since PO cycle time and payment processing time lie within MSD. Therefore, ensuring that all deadlines are met could reduce delays somewhat. On the other hand, even though supplier lead time is the supplier's responsibility, MSD is able to improve it by ensuring that all suppliers comply with contracts, failing which they are blacklisted and can no longer participate in tendering procedures.