Second National Quality Improvement Forum on Health CareNovember 21- 22, 2012
Mlimani City Conference Centre, Dar es Salaam, TANZANIA
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Abstract Title: Minimizing stock-outs of essential medicines in public health facilities: antecedents ofMSD logistics service performance Public health facilities in Tanzania have been critically suffering from common medicines stock out problems.
Several factors which include budget constraints have been associated with such problems and solutions,thereon, have been sought. However, supply logistics management factors have received limited attention inthe health sector. Building on transaction cost theory, principal-agent theory and resource based view theoryof the firm, this paper examined the antecedents of supplier logistics service performance, while controlling forpurchasing centralization, geographical location, environmental uncertainty and organization size. Therefore,this paper intend to: (i) Identify key factors which determine improvement in supplier logistics serviceperformance by testing the impact of specific investments, ex-post transaction costs, cross functionalintegration, supplier integration and supplier output monitoring on Supplier logistics service performance. (ii)Determine the moderating effects of cross-functional integration on the relationship between supplierintegration and supplier logistics service performance; (iii) Determine the moderating effects of supplier outputmonitoring on the relationship between supplier integration and supplier logistics service performance. A totalof 183 public health facilities (hospitals, health centers and dispensaries) in Tanzania mainland were surveyedfrom seven regions. Stratified random sampling was employed to select them. A structured questionnaire wasused to collect data from key informants (purchasing officials at the health facility level). All measurementswere adapted from previous studies and measured in a seven point likert scale. The hierarchical moderatedmultiple regression model was used to analyze the data. The results indicated that specific investments,supplier integration and supplier output monitoring significantly improve supplier logistics serviceperformance, while cross functional integration does not. Moreover, evidence indicates that ex-posttransaction costs negatively influence supplier logistics service performance. Evidence also show that crossfunctional integration and supplier output monitoring positively and significantly moderated the effects ofsupplier integration on supplier logistics service performance. Purchasing centralization negatively influencedsupplier logistics service performance, which implies that public health facilities with higher involvement ofdistrict/regional medical office in purchasing, experience low MSD logistics service performance. Similarly, thenegative influence of geographical location suggest that rural public health facilities experience low MSD’slogistics service performance compared to urban ones. This paper has managerial and theoretical implicationsto stakeholders in the health system. Generally the results imply that the public health service needs to adaptstrategic supply management practices, and simultaneously integrate within and across their health facilitywith MSD. Relationships with suppliers are also prone to supplier’s opportunistic behaviours, therefore tocontinue gaining good supplier logistics performance; control mechanisms such as supplier output monitoringand supplier integration must be in place to mitigate such behaviours. However, supplier output monitoringand supplier integration differ in their strength to mitigate opportunism therefore a combination of them mayguarantee good performance. This paper also suggests that MSD needs to carry out strategic adaptations tomeet the needs of their customers through specific investments. The significance of ex-post transaction costssuggest that more efforts should be set to support public health facilities on adapting better governancemechanisms to manage their relationships with MSD.
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