Inventory Management Practices in Private Healthcare Facilities in Nairobi County

• Published in: Production and operations management 2022-02, Vol.31 (2), p.828-846
• Main Authors: Karamshetty, Varun, De Vries, Harwin, Van Wassenhove, Luk N., Dewilde, Sarah, Minnaard, Warnyta, Ongarora, Dennis, Abuga, Kennedy, Yadav, Prashant
• Format: Article
• Language: English
• Subjects: Health facilities; Hypotheses; Inventory; Inventory control; Inventory management; low‐ and middle‐income countries; private healthcare; semi‐structured interviews; urban neighborhoods
• ISSN: 1059-1478; 1937-5956
• DOI: 10.1111/poms.13445

Universal health coverage (UHC) is an integral part of the United Nations sustainable development goals. The private sector plays a prominent role in achieving UHC, being the primary source of essential medicines for many people. However, many private healthcare facilities in low‐ and middle‐income countries (LMICs) have insufficient stocks of essential medicines. Simultaneously, these same facilities carry excessive quantities of other drugs, leading to obsolescence. This suggests poor inventory control. To propose potential remedies it is vital to fully understand the underlying causes. In semi‐structured interviews with managers of private healthcare facilities in Nairobi, we asked them about their (1) inventory control systems, (2) inventory control skills, (3) time/human resource constraints, (4) budget constraints, (5) motivations for inventory control, and (6) suppliers. Our results suggest that the problems are driven by resource limitations (budget and time/human resources), managerial issues (relating to skills and systems), and market mechanisms that limit overage and underage costs. Unavailability at the supplier level and motivations for inventory control are relatively minor issues. We posit that the key causes are interlinked and stem from wider issues in the market and regulatory environment. Our results challenge prevalent beliefs about medicine supply chains in LMICs and lead to novel hypotheses. Testing these hypotheses could improve our understanding of inventory management in private healthcare facilities and aid progress in achieving UHC.