Regional Distribution Centers

With state-of-the-art regional distribution centers (RDCs) operating in Ghana, Kenya and South Africa (with an auxiliary storage facility in Botswana), SCMS is providing the most frequently requested essential medicines and other health products within shorter delivery times, trimming the turnaround time from three to four months to between four to six weeks for planned orders. In January, 81 percent of all deliveries (by value) were through RDCs. Consistent with the past two months, 99 percent of all ARV deliveries (by value) in January were from an RDC (excluding Guyana, Haiti and Vietnam).

The continuing success of the SCMS RDCs can be attributed to the design of the RDC logistics model, which is based on sound supply chain principles, accommodating the specific challenges of a large scale program such as PEPFAR. The RDCs are placed close enough to the target countries to allow flexibility and rapid response, yet also to leverage economies of scale across multiple countries. The RDCs were created without USAID capital expense and are accessed on a "pay-as-you-go" activity-based costing model, with SCMS only paying per actual pallets stored. In this way, the SCMS model has been designed to address the high-variance environment in which it operates, while minimizing costs.