Press release by KEMSA
A scheduled annual stock take exercise at the Kenya Medical Supplies Authority (KEMSA) has commenced today.
The exercise was flagged off by KEMSA CEO Terry Ramadhani who confirmed that, during the stock-taking period (from Friday 1st to Friday 8th July), KEMSA will temporarily suspend regular sales and warehouse operations, including product receipts and dispatches, save for emergency supplies. Normal Sales and Warehouse operations, she said will resume on Monday 11th July 2022.
Describing the stock-take as an integral management process, the exercise she said will be technically used for the Authority’s annual stock valuation reporting and will establish the value of the usable stocks while separating them from expired, damaged and obsolete inventory in accordance with International Financial Reporting Standards.
The exercise she added is also part of ongoing efforts to accelerate the execution of a three-pronged KEMSA transformation strategy, which focuses on driving operational excellence, enhancing customer experience and repositioning the organisation.
As the national health commodities supply chain agent, KEMSA procures bulk health products and technologies (HPTs) at preferential prices due to its economies of scale and passes the benefits to its clients in the national public health system, who enjoy last-mile delivery solutions from the Authority.
This financial year, KEMSA has dispatched more than Ksh26 Billion worth of Essential Medicines, Medical Supplies (EMMS) and National Health Strategic Programs (NHSP) supplies to 47 Counties. The supplies include more than 114,782 EMMS, and NSPHP supplies (orders) were dispatched to more than 8,741 health facilities countrywide as of last month (May).
“A stock-taking exercise is an integral part of business management and is even more important for an organisation like KEMSA, which holds physical inventory valued at more than Kshs 16 billion annually. At KEMSA, we are taking this exercise seriously as it will help us physically identify and quantify existing stock levels, verify the stock condition and generally ensure that we do not have an unexplained variance between our system records and the inventory in our warehouses,” Ramadhani said.
She added, “This exercise will enable us to review and update our internal controls as we will identify gaps that need to be improved, including procurement levels, physical security and related inventory management aspects.”
To minimise disruption for KEMSA clients during the stock take period, Ramadhani confirmed that the Authority had activated impact mitigation plans, and engagements are ongoing to guarantee customer satisfaction.
“Our regional customer service officers are currently engaging with our esteemed clients countrywide to notify them of the scheduled annual stock take exercise and also to work out dispatch modalities to avoid any inconveniences this first week of July,” She explained.
With an organisational transformation agenda underway, operating efficiencies at KEMSA have continued to improve, with the order Turn Around Time (TAT) now standing at less than ten days from more than 40 days in May 2021. The order fulfilment rate has also grown to more than 48%, up from 18% within the same period last year.
Drought-hit counties in the Arid and Semi-Arid Lands (ASAL) areas, Ramadhani disclosed continue to receive priority attention at KEMSA with Kilifi, Marsabit, Samburu, Baringo, Garissa and Tana River, Wajir, Mandera and Turkana recently receiving Kshs.1.38Billion worth of priority medical supplies.
Earlier this month, KEMSA announced that efforts to enhance its organisational integrity and efficiency had increased by adopting a new inventory management policy.
The new Inventory management policy adopted by the KEMSA Board following a management review is, geared at ensuring adherence to optimal stock holding levels and will see the Authority’s stockholding exposure reduced from Kshs 16 billion to Kshs 9 billion worth of health products and technologies (HPT) inventories.
The revised inventory management policy is benchmarked against world-class supply chain management standards and is, aligned with the Ministry of Health National Health Products and Technologies Supply Chain Strategy 2020 – 2025.
KEMSA has also stepped up the use of the framework supply contracting model, allowing for the staggered delivery of supplies as part of the adoption of world-class inventory management practices. Adopting revised Just in Time (JIT) inventory management procedures, Ramadhani said, will help curb the risk of holding slow-moving stocks that lead to wastage as short shelf-life products expire.