Over the past eight years, the Kenya Medical Supplies Authority (KEMSA) has been on a focused transformation journey. Once vilified as the epitome of everything wrong with public entities, today KEMSA stands tall as an example that strategic leadership with a clear focus can bring change. From a crucified parastatal, today the authority is among the most celebrated public companies.
“There was a time when we used to depend on the exchequer for funding. Today we have 100 per cent attained self-sustaining status,” says Dr John Munyu, KEMSA Chief Executive Officer. By all means this is not a mean achievement considering that majority of the parastatals are still depending on the exchequer to fund their operations at a time when the government is feeling the pressure of dwindling resources.
That KEMSA’s transformation journey has been phenomenal is indisputable. With a mandate to procure, warehouse and distribute medical commodities to public health facilities and quasi-government health institutions, KEMSA is categorized as a service-oriented parastatal. Based on this categorization, the authority can chose to be basically a conveyor belt without real ambitions.
According to Dr Munyu, however, KEMSA has chosen to be a critical player in improving healthcare access and lowering the cost of medical care for Kenyans, majority of whom depend on the public healthcare system. For this reason, the authority wants to remain a service-oriented parastatal but one that operates on a commercial business model that is financially self sustaining but not for profit making.
“For us to carry out our mandates effectively and efficiently we need to be self sustaining,” he explains. It is for this reason that over the past few years KEMSA has been undertaking far-reaching reforms and implementing new strategies to ensure that it has the necessary resources to carry out its mandates of ensuring Kenyans easily and affordably access medicines and other medical commodities.
Building a strong financial war chest is something KEMSA has painstakingly managed to achieve. Over the past three years, the authority has recorded a significant growth in sales from Sh1.2 billion at the end of 2011/12 financial year to Sh4.8 billion at the end of 2015/16 financial year. This year, KEMSA is targeting to hit Sh6 billion sales. “Our sales have continued to grow and today we have a healthy bottom line,” explains Dr Munyu.
The growth in revenue has not come by chance. Rather, it has come through a focused determination to transform the parastatal in all fronts. The changes have included implementing of a new business model, adopting a new corporate culture that is focused on quality customer service, investing in a robust enterprise resource planning (ERP) system that has brought efficiency in all processes and procedures, investing in training of employees to pursuit of strategic partnerships.
These changes have ensured that KEMSA has not only remained relevant particularly after the devolution of health care to county government but has grown in stature. It is imperative to note that before devolution, the authority had only one client – the government. With devolution, KEMSA now has 47 clients whose needs are varied. To ensure that county governments procure medical commodities from it, the authority has developed a business model that works perfectly for them.
Indeed while the perception has been that KEMSA is a monopoly and is the only organization mandated to supply medical commodities to all public hospitals and health facilities, this is far from the truth. Although county governments require medical commodities supplies for health facilities under their territories, they are not obligated to exclusively procure from KEMSA.
However, the fact that KEMSA has crafted a business model to specifically serve the needs of the devolved healthcare system through a supermarket concept model has ensured that county governments remain its trusted customers. In the model, KEMSA opened a super medical store that is stocked with a variety of medical commodities in line with the needs of the counties. Counties are thus able to enter the store, shop for the commodities they need, pay and go. The difference from the typical supermarket, however, is the fact that all the shopping and interactions are done online through a robust IT system.
“Because of our new business model all the counties are procuring the bulk of their medical commodity needs from us,” states Dr Munyu. He adds that following the implementation of the new business model, KEMSA has witnessed a 50 per cent growth in volumes of orders going into the counties. “This shows that the counties have confidence in us,” he notes, adding that KEMSA wants to continue offering quality products and services and does not need any protection by the law. “KEMSA is not perturbed by competition and the fact that county governments are not procuring 100 per cent from us is a testament to the vibrancy of the medical sector,” he avers.
While KEMSA’s mandates might seem clear-cut, the processes involved in the procurement, warehousing and distribution of medical commodities are complex and intricate. For this reason, the authority has implemented an ERP system that automates all functions and business processes, making it possible to service customers efficiently and effectively. With the system, KEMSA is able to manage all supply chain activities efficiently and cost effectively, gather consumption data that is critical in planning, quantification and focusing.
The decision to invest in a robust ERP has not only automated every process but has also significantly increased efficiency. More importantly, it has helped KEMSA cement its commitment to quality and adhere to high levels of standards. This is necessary considering that the authority deals with sensitive commodities that can easily turn poisonous.
Due to its commitment to offering quality products and services, KEMSA recently created a new Planning and Continuous Improvement Department responsible for dissecting the organization and identifying areas that need improvement. Before becoming fully fledged, the department used to operate as a unit. The department comprising of six staff from diverse disciplines will undertake monitoring and evaluation of the inputs and outputs injected into the business to ensure that growth is on an upward curve.
The department will continuously revise and assess the performance of all department units and come up with suggestions to improve performance. It will also support the units to set plans for improving the quality of services and integrate their initiatives, plans and projects towards the realization of the overall goal. “The department will be scanning the organization and come up with areas we need to improve,” explains Dr Munyu. He adds that by establishing the department, KEMSA is committed to improvement of its services.
KEMSA’s exemplary transformation journey has not passed unnoticed. This year, KEMSA has become the first medical logistics organization in the region to attain the new standard ISO 9001:2015 awarded by Bureau Veritas. “The ISO certification helps us to benchmark and deliver services within international standards,” observes Dr Munyu.
According to Dr Munyu, the certification will challenge KEMSA to raise the bar in terms of service delivery in line with the set requirements and standards. Indeed the fact that the certifying body will be carrying out periodic audits to guarantee conformity means that KEMSA cannot afford to sit on its laurels.
“The certification is a very important parameter in keeping us awake and raising the bar in our service delivery,” he emphasizes, adding that the ultimate goal for KEMSA is customer satisfaction.
