UNICEF set for $735 million saving boost

7 June 2012

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7 June 2012 | Kamalpreet Badasha

The United Nations Children’s Fund (UNICEF) expects to make savings of $735 million (£474 million) by 2015 through the use of improved pricing, among other measures.

The organisation’s Supply Annual Report 2011 revealed how cost-cutting measures includes saving $23.6 million (£15.2 million) on the purchase of bed nets between 2011 and 2012. Discussions with suppliers allowed UNICEF to reverse a trend of rising price increases on the nets that prevent insect bites.

The report reveals suppliers in emerging markets are now producing the pentavalent vaccine, keeping prices competitive. Pentavalent combines five different vaccines (diphtheria, pertusis, tetanus, hepatitis b and haemophilius influenza type b) into a single dose. UNICEF expects $153 million (£99 million) will be saved between 2012 to 2013 by using it.

The implementation of an ERP and procurement system have also enabled cost savings. In addition, nearly 100 staff have been trained in supply management and humanitarian logistics, improving in-country logistics.

Analysis of the supply chain for ready-to-use theraputic food, conducted with Duke University in the US, also boosted efficiency. It introduced 15 new suppliers and improved demand forecasting and lead times for delivery.

UNICEF’s expenditure on aid has quadrupled in the past decade to $2.14 billion (£1.38 billion). The charity spent $192 million (£124 million) on pharmaceuticals in 2011 - 11 times more than in 2002. The higher expenditure is a result of UNICEF providing aid to over 140 countries in 2011, including 78 countries facing humanitarian emergencies. But thanks to economic growth in the region, Asia has seen supply interventions by UNICEF decrease by 10 per cent over the past 10 years.

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