Forecasting Demand for Partners in Health

Christine Heberley and Ma
Partner: Partners in Health (PIH)

Partners in Health’s (PIH) supply chain in Haiti has become strained over the past five years due to the organization’s rapid growth. Under the current system, the majority of PIH’s products are obtained through an annually placed order. All goods from this order are stored at the central warehouse in Cange, which acts as a hub, until those goods are needed at individual clinics. As annual orders increase in size to support PIH’s expanding operations, the limited size of the central warehouse has become a constraint, making a change in current inventory policies necessary. In order to formulate revised inventory policies for PIH’s Haiti operations, we developed a spreadsheet model that uses historical consumption data of drugs and medical supplies to forecast demand over the next three years. This demand data is then be used as input to run and compare the existing annual order policy with ordering policies with more frequent reviews. These inventory policies are then evaluated against the central warehouse size constraints to recommend an inventory policy better suited to meet PIH’s needs. We find that more frequent orders drastically reduces warehouse space requirements while maintaining high service levels. It is hoped that PIH can continue to use this model to determine future inventory policy needs.

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Posted on

March 7, 2015