SALFA imports a large part of its goods to supply the needs (at least 75%). At 80%, this one is constituted by medicines (drugs). For more than 20 years, SALFA’s main supplier is IDA located in Holland. Within the more than 20 years of mutual collaboration, it has already been installed a good partnership and today SALFA and IDA’s relationship is not between a supplier and a client but more friendly and full of mutual confidence. This supplier can provide good prices and valuable medicines.

Anyway, in this time of globalization, SALFA should keep an eye around and should be ready to take any good opportunities in the domain of medicines supply.

For a matter of security, SALFA is used to importing medicines through 20-Ft containers. In consideration of the actual needs, it is required to have not less than 6 containers a year in order to satisfy all of the centers. In average, one 20-Ft container full of medicines costs $ 100,000. This means that the needs converted in money is around $ 600,000!

Fortunately in terms of practice, the $ 600,000 does not need to be used at one time but is used on a revolving basis such as: one order is already received, a second one is already en route and a 3rd one is processed and so on… Actually, this assumes a need of $ 300,000.

Below is a draft of how this should be accomplished:

It is important that this cycle is respected. There are 5 points that SALFA should care for when applying a revolving fund to a supply system process:

• Point # 1: that the expressed needs are correct (statistics, training, standardization of the therapy)
• Point # 2: that an appropriate calendar is set up (dates for setting the orders, customs procedure handled…)
• Point # 3: that the money flows carefully and always returns into the process (budget , cash flow, procedure, debts)
• Point # 4: that the money does not loose its power (depreciation of the money, pricing procedure)
• Point # 5: linked to the above point 3, that the running expenses for the overall system are exactly known.

Mastering these 5 points gives a better success for the system.

• Point # 1: mastering the needs.

  This point depends on 3 factors: how the doctors are trained – how the therapy is standardized and how the statistics are managed.

  For many years and every year, SALFA procures formal trainings and further academic studies for the SALFA’s doctors. For the last 5 years (at least), the conferences and trainings have been worked with the University of Kalamazoo and Dr Richard Roach, MD; and the academic studies are done at the public local Health Institute or abroad (Gabon, Cameroon, France…)

  An effort to standardize the treatment has been discussed many times but never applied. This is useful to do so that it is easy to teach any change in the therapy and that the needs are easily calculated.

  SALFA puts a big effort to handle good statistics. Investment in computers, trainings were done within the last two years. Today, only a few health centers have been covered/concerned by these investments. This is an on-going program.

  We can say that we are not at a point where the needs are carefully known and calculated but a large effort has been developed toward this target.

• Point # 2: mastering the calendar:

  A calendar is a consensual spreadsheet of timing for when each step is performed. This should not be set theoretically but instead must comply with the actual situation. If, at the beginning, the implementation shows a large time between each step, this should evolve in a way that more and more everyone is respectful of each deadline.

  The setting of this calendar implies that the following are fixed:
  

  • the delay for the payment (credit)
  • the deadline for submitting the needs
  • the administrative performance (e.g.: clearing procedure) can be evaluated in number of days.

• Point # 3: mastering the cash flow:

  Mastering this part is less a matter of effective payment and more a question of confidence in the delay of payment. For the manager, it is more important to get a confirmed date of payment than a payment itself; this is the most important factor for implementation of a good management of the cash flow. Cash payment is just a technical task but getting an appropriate answer of payment (credit time) is more important for the managing.

  Related to this above issue, another one in this part is the importance of the debt. This problem stems from:
  

  • mismanagement
  • decreasing of the number of the patients due to poor quality of the work done
  • also the number of patients can stay high but the major part of them is very poor.

  The first problem is mastered by frequent controls done at each place, plus locating the key people, then train them; the second one is also corrected by visit and/or training; the last issue would require support from donors because this is a matter of absence of money. Today, this latter one has been solved by the “Rural Clinic” program funded by Global Health Ministries.

  It is also essential that SALFA does a critical analyzing of the current indebt ness of his facilities. This will help to understand then to avoid some further mistakes and to prevent this problem.

• Point # 4: mastering the weight of the money:

  Because this part talks more about the depreciation of the local currency, most of the time it is easy to say that this cannot be handled from inside. This is a mistake. What is true is that this cannot be totally handled, but it can be minimized (unless there is a deep depreciation of the local currency).

  If the Ariary has dramatically dropped during 2005 to 2006, for the last 6 months it has stabilized about $ US 1 = 1.800 Ariary.

  To prevent the problem of money depreciation, it is important to keep an eye on the pricing process at SALFA so that one can stay in a tolerable situation.

  The exact cost must be well known and the best/right selling price honestly calculated.

• Point # 5: mastering the expenses:

  Managing the cash flow implies that the expenses are well known or, at least can be well estimated. This requires that the manager at each place is able to follow up the information provided by the accountant and that each one makes a good record of the center’s activities