Last Mile Logistics

The Ministry of Health and Social Welfare in Tanzania had recently mandated that MSD deliver all the way to the country’s health centers and dispensaries instead of to district warehouses. With an increase in the number of drop points from approximately 130 districts to over 5,000 facilities, it was important to build MSD’s capacity to take on delivery responsibilities previously provided by the District Medical Offices (DMO), without compromising service. Given MSD’s shortage of personnel, vehicles and funding, innovative approaches were needed to support this change.

The list of ideas and options considered was extensive and included: 

  • Network optimization of routes: Use geo-coded Llamasoft software to identify the most efficient delivery schedules and routes.
  • Improved storage: Convert 10-ton trucks to temporary warehouses, rent additional warehouse nodes, or use excess storage areas in existing health centers as additional warehouse space.
  • Outsourcing the last mile: Move from a centralized government structure to a more entrepreneurial model like the Coca-Cola Micro Distribution Center, or use local “fixer” to broker the best third party supplier delivery deals.

Many of the ideas were eliminated from the list due to cost, lack of required data infrastructure, or difficultly implementing in a bureaucratic government entity. Ultimately, support for route optimization was identified as the intervention with the greatest potential for impact. The team developed an Excel-based tool to design distribution routes that would minimize costs. Once the tool was developed, the process of gathering information on health facility location and road access began.

This was not an easy task given the lack of data and knowledge about facility locations. ADP consultants mobilized a data team from the MSD Area Managers Office and Zone Warehouses and trained these individuals to validate health facility locations and systematically collect distances, times and road conditions to these locations. Coca-Cola bottlers provided valuable information on routes and road conditions as well as approaches to account for seasonal changes that affect transportation around the country. Once collected, this data was entered into the Excel template to produce optimized routes indicating major savings in fuel and per diem costs. Within weeks, four Excel templates were completed by the zonal area managers - ahead of schedule!

In Phase II and III, direct delivery was rolled out to additional regions as current routes and delivery networks were adjusted based on the Excel tool. ADP and Coca-Cola continued to support MSD in finding additional ways to optimize existing routes and networks. Llamosft, a more sophisticated geo-coded Network Optimization Software similar to the program used by Coca-Cola bottlers, was contracted for MSD in Phase III. This tool required more detailed geocoded data, but added a layer of sophistication to the process of network optimization, providing technical superiority over the Excel models and generating greater efficiency and cost savings in direct delivery for MSD.

The Last Mile Work Stream also aimed to utilize TCCC’s expertise to evaluate feasibility of outsourcing delivery in the last mile. Bottlers from Coca-Cola Kwanza engaged with ADP and MSD to explain ways in which their network operates and the extent of partnering and outsourcing they undertake to distribute Coca-Cola products throughout the country. 

Photo caption: Health facility in Tanga Region, Tanzania.

Photo credits: Hannah Wheatley

 




 Background Resources

'Last Mile' Tool - Click below to view the tool.

Using Last Mile Distribution to Increase Access to Health Commodities by USAID, December 2011. Read about what the 'Last Mile' logistics mean as well as the promises and challenges in addressing it in the supply chain.

Llamasoft: Browse the Llamasoft Transportation Guru website.

 Partners' Perspectives

Having Coke open their books, their routes, their resources as far as distributors, that has saved MSD, and other donors, a tremendous amount of money from having to go create and build that from scratch because MSD needed to start delivery to all 6000 sites instead of 500 and that system had to be developed and a lot of the roads and a lot of the routing was not something that MSD was doing.  So, sure MSD and the other donors, we could’ve gone out and created that but having Coke involved in that process, they already had that information. So, it was an easy transfer of information, an easy transfer of skills" Project Last Mile Partner 

Click here to view transcripts of the audio clips.