Better Data Visibility & Data Use Result in Lower Cost and Improved Performance in Medicine Supply Chains

In 2013-2014, Tanzania embarked on a major revamp of the management of its public health supply chains for medicines and other health supplies. These upgrades include the establishment of a national electronic logistics management information system (eLMIS) and the introduction of a Logistics Management Unit (LMU) to use the eLMIS for managing all key public health commodities. This paper describes results from the “round one” evaluation of the impact of those key management upgrades roughly one year after their introduction. The study has three main components: (1) analysis of reporting, data use, management practices, and supply chain outcomes; (2) a cost and cost-effectiveness analysis and (3) a return on investment analysis to measure savings generated by the new systems. The study used a non-experimental pre- and post-design to compare the previous system with the upgraded management system. The quantitative analysis found that stock out rates for all product goods dropped from 32% to 23%, with the frequency of stock-outs greater than 7 days dropping from 24% to 15%. Annual supply chain costs increased from $66million to $76million. Performance improved from the 2014 baseline findings of 68% to 77%, but cost per value of commodities adjusted for performance decreased from 58% at baseline to 50% in year 1.

💡 Research Summary

This paper evaluates the first‑year impact of Tanzania’s 2013‑2014 overhaul of its public‑sector health‑commodity supply chain. The reform introduced two interlocking components: a national electronic logistics management information system (eLMIS) that captures real‑time data on orders, stock levels, and deliveries for all public health products, and a dedicated Logistics Management Unit (LMU) tasked with using that data to plan, monitor, and coordinate the entire supply chain. Using a non‑experimental pre‑post design, the authors compared key performance, cost, and cost‑effectiveness indicators before the upgrade (baseline 2013) and roughly one year after implementation (2014).

The quantitative results show a marked improvement in product availability. Overall stock‑out rates fell from 32 % to 23 %, and the proportion of stock‑outs lasting more than seven days dropped from 24 % to 15 %. These gains are attributed to the increased visibility of inventory data, faster decision‑making at the LMU, and more accurate, timely replenishment orders. Reporting completeness and data use also improved, indicating that frontline facilities began to rely on the eLMIS for routine management rather than on fragmented paper reports.

Supply‑chain operating costs rose from US$66 million to US$76 million, reflecting the upfront investment in the eLMIS platform, LMU staffing, training, and additional data‑entry labor. Despite the higher absolute cost, the performance index rose from 68 % to 77 %, and the cost‑per‑unit‑value adjusted for performance declined from 58 % to 50 %. In other words, the system delivered more value for each dollar spent. A return‑on‑investment analysis estimated a pay‑back period of roughly three to four years, driven by savings from reduced stock‑outs, lower emergency procurement, and decreased drug wastage.

The authors discuss several broader implications. First, enhanced data visibility reduces the risk of stock‑outs that can delay patient treatment and erode trust in the public health system. Second, centralized management through the LMU curtails opportunities for corruption and informal “buffer” stock practices, promoting a more transparent and accountable supply chain. Third, the experience demonstrates that modest increases in operating budgets can be justified when they are linked to measurable performance gains.

Limitations include the non‑randomized design, which cannot fully isolate the effect of the eLMIS/LMU from other concurrent health‑system changes, and the short observation window that may not capture longer‑term cost dynamics or sustainability issues. The paper calls for follow‑up studies with multi‑year data, more rigorous quasi‑experimental methods, and qualitative assessments of staff attitudes toward the new system.

In sum, the study provides empirical evidence that investing in electronic logistics information systems and dedicated management units can substantially improve product availability while delivering better cost‑effectiveness in low‑resource public health supply chains. The Tanzanian case offers a practical model for other countries seeking to modernize their health‑commodity logistics and achieve both fiscal prudence and higher service quality.