02 November 2017
An OIG audit found that the initial goals of the Global Fund’s online procurement platform, wambo.org, remain valid and aligned with the organization’s long term strategic objectives. The platform has brought increased transparency to the ordering process of the Pooled Procurement Mechanism (PPM), a Global Fund initiative that aggregates orders and negotiates the best conditions for Principal Recipients. The platform has also received high user satisfaction rates.
The wambo.org platform is designed to alleviate procurement challenges by bringing together buyers and suppliers of health products. It gives both parties greater visibility of procurement processes and aims to improve the availability of products, provide better prices and reduce costs. The platform, as initially conceived, was expected to create greater transparency, increase savings, ensure sustainable supply, empower countries through capacity building, and automate processes to accelerate decisions. In the long term, the Secretariat envisioned the platform as a self-sustaining global public good allowing countries to place orders using domestic funding and offering global and transparent pricing for all stakeholders.
Progress in the implementation of wambo.org has been affected by various factors, including: a delay in the approval by the Board of the pilot for domestic purchases; the wambo.org Steering Committee decision to prioritize the transitioning of existing PPM Principal Recipients onto the platform, which effectively deprioritized efforts to increase the number of non-PPM participants or to expand the range of products available on wambo.org; a vacancy in the Chief Procurement Officer position at the Global Fund for most of 2017; and the creation of a new supply chain team at the Secretariat in 2016, which also led to certain initiatives that were previously in the wambo.org project being reassigned to this new team.
Notwithstanding these implementation delays, the audit identified an overarching need to refine the wambo.org business case, to reassess the key assumptions and success factors, and to define a coherent strategic framework for its effective implementation. The OIG found that it was unclear how wambo.org fits into the Global Fund’s overarching procurement and supply chain management strategy. Partly as a result of the lack of an explicitly approved Board mandate at the outset, significant questions remain regarding the platform’s role in the implementation of priorities such as the Global Fund’s Market Shaping Strategy. This Board-approved strategy defines how the organization can more actively shape the markets for health products to optimize price, quality, design and sustainable supply.
At the time of the audit, wambo.org was not on track to achieve the projected savings of US$246 million by 2019 that had been forecasted in its business case. This is because of changes in project priorities but also due to several limitations in the initial assumptions that were made. One of the key assumptions was the ability of wambo.org to reach a wide and diverse user base through a projected increase of Principal Recipients joining the platform. The decision made by the platform’s Steering Committee to focus on recipients who are already using PPM means that only an additional eight non-PPM Principal Recipients out of a targeted 60 had placed orders through the platform, 18 months after its launch.
The platform has so far not yet achieved its operational efficiency targets. At the time of the audit, order lead time (the time from initial requisition to order confirmation) remained at 47 days compared with a baseline lead time of 44 days in the PPM. Subsequent to the audit, the Secretariat has reported improvements in lead time.
The OIG also found that the Secretariat needs to develop a more structured risk mitigation plan for the next phases of the project and revise the currently fragmented implementation arrangements between the PPM and the wambo.org platform.
The Secretariat is addressing the above issues including how the wambo.org links to the Market Shaping Strategy, organizational procurement and supply chain management strategies. The Secretariat will also update the business case, organizational structure and key success metrics of the platform.
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