Transforming Ethiopia’s Pharmaceutical Supply Chain: The Success Story of EPSS
The Ethiopian Pharmaceutical Supply Service (EPSS) has made remarkable strides in revolutionizing the country’s pharmaceutical supply chain, culminating in its recognition as the Grand Prize winner at the 2024 Global Health Supply Chain Summit held in Lagos, Nigeria. This prestigious award reflects years of dedicated effort, strategic planning, and a commitment to delivering essential medicines efficiently and affordably to millions of Ethiopians.
A Vision for Change
EPSS embarked on its transformative journey with a clear objective: to address systemic challenges within the pharmaceutical supply chain and implement tangible improvements across its operations. Central to this transformation has been the adoption of the KAIZEN philosophy, which emphasizes continuous improvement through collaborative daily work management. This approach has led to breakthrough innovations targeting critical bottlenecks in supply chain processes and systematic engagement of leadership for effective change management and sustainability.
One of the most significant achievements during this transformation has been the dramatic improvement in inventory accuracy, which surged from 90% to an impressive 99.8%. This enhancement not only streamlined warehouse operations but also ensured that life-saving medicines are available when and where they are needed most. Additionally, distribution costs have decreased from 0.9% to 0.5%, while proof of delivery rates improved from 89% to 98%.
Streamlining Operations
The reduction in order processing lead times has been particularly noteworthy, with some hubs experiencing a decrease from six days to just eight hours. This remarkable enhancement has significantly increased the responsiveness of the supply chain to customer demand, ensuring that healthcare providers have timely access to essential medications.
Another transformative milestone was the optimization of warehouse layouts. By redesigning storage spaces and implementing advanced racking systems, EPSS achieved full utilization of its facilities, freeing up approximately 744 square meters of valuable space. This redesign not only created safer working environments but also reduced the distance workers traveled within warehouses from 77 kilometers to just 17 kilometers per month. Such improvements have saved time and boosted productivity.
Embracing Digital Transformation
Digital transformation has been at the core of EPSS’s journey towards operational excellence. By leveraging advanced digital dashboards and data visualization tools, EPSS has revolutionized its decision-making processes, providing real-time insights into supply chain performance. These tools have enhanced visibility across operations, enabling the organization to proactively respond to emerging challenges and maintain a steady flow of essential commodities.
For instance, the introduction of innovative near-expiry visualization systems has helped reduce wastage rates from 1.8% to under 0.8%. This initiative not only saved resources but also strengthened trust with stakeholders and partners by ensuring that valuable medicines do not go unused due to expiration.
Building a Culture of Continuous Improvement
Beyond operational achievements, EPSS has fostered a cultural transformation within its workforce. By training over 1,500 employees in Lean and KAIZEN principles as well as supply chain fundamentals, EPSS has built a culture characterized by accountability, teamwork, and continuous learning. Daily KAIZEN boards and project governance systems have become integral in maintaining momentum for improvements and ensuring that successes are scaled across all operational hubs.
The establishment of an Improvement and Skilling Center at EPSS headquarters and selected hubs has further institutionalized this culture of continuous improvement. These centers focus on integrated project management, enhancing accountability across the organization, knowledge management, and facilitating reward and recognition systems for outstanding performance.
Commitment to Sustainability
Sustainability has remained a cornerstone of EPSS’s transformation journey. The organization is committed to ensuring that its improvements are not only effective but also sustainable in the long term. The addition of an Enterprise Resource Planning (ERP) system based on SAP S/4HANA is expected to further reinforce EPSS’s capabilities in sustaining improvements while adapting to future challenges.
Dr. Abdulkadir Gegelo, Director General of EPSS, emphasized that winning the Grand Prize at the Global Health Supply Chain Summit is a testament to the relentless pursuit of excellence by his team. He noted that this recognition reflects their commitment to transforming challenges into opportunities for better service delivery in Ethiopia’s healthcare sector.
Future Prospects
As EPSS looks forward, it remains steadfast in its mission to build on these accomplishments. With robust systems in place, an empowered workforce, and forward-looking strategies, EPSS is well-positioned not only to continue driving impactful change within Ethiopia but also to serve as an inspiration for healthcare systems worldwide.
Ethiopia’s healthcare landscape is evolving rapidly, with increasing demands for high-quality pharmaceuticals driven by population growth and urbanization. The successful transformation of EPSS serves as a model for other organizations aiming to improve their supply chains amidst similar challenges.
In conclusion, the journey of the Ethiopian Pharmaceutical Supply Service exemplifies how strategic focus on continuous improvement can lead to significant advancements in public health infrastructure. By prioritizing efficiency, embracing technology, and fostering a culture of accountability and learning, EPSS is not just enhancing its operations but is also making a profound impact on the health outcomes of millions of Ethiopians. As it continues on this path, EPSS stands as a beacon of innovation in the global health supply chain landscape.
Resisting the new aristocracy
The last three decades of market-oriented policies in Ethiopia have led to a society where the relationship between cause and effect has become increasingly distorted. Traditionally, hard work—particularly creative and productive labor—has been viewed as the cornerstone of wealth accumulation. However, this principle seems to have eroded in the context of Ethiopia’s evolving economy. In fully monetized economies, wealth is often generated through the accumulation of capital (money creating more money), rather than through labor alone. In contrast, Ethiopia appears to be leapfrogging essential phases of capitalist economic development, inadvertently fostering a new aristocracy that thrives on unearned income without establishing a broad base of productive workers.
The anomaly within Ethiopia’s modern sector can be traced back to an economic orientation that prioritizes rent-seeking behaviors over sustainable growth. Despite the government’s rhetoric about promoting investment and development, what exists today is a rentier system that benefits a select few while marginalizing the majority. Land, capital, and even labor are predominantly controlled by political elites who exploit their positions for personal gain. The federal model and market-oriented policies implemented by the Prosperity Party have effectively dismantled previous land proclamations that designated land as collective property, leading to a situation where regional authorities wield disproportionate control over land allocation.
The current system has created an environment where those connected to power are favored in land distribution, while ordinary citizens are left to navigate a convoluted bureaucratic landscape. The lack of transparency in land allocation processes has enabled the emergence of a landed aristocracy, exacerbating inequality and social unrest.
In addition to land access issues, administrative officials—both private and state—have been granted significant power to allocate credit without considering the broader economic implications. This lack of oversight has resulted in an accumulation of uncollectible debts within the banking system, primarily due to misallocated investments in sectors such as manufacturing, agriculture, and real estate. The absence of critical thinking in policy-making has stifled constructive dialogue about these pressing issues.
For many capable individuals, conforming to flawed policies has become less mentally taxing than challenging the status quo. Those with a stronger moral compass often find themselves at a crossroads: either disengage from the prevailing narrative or risk facing repercussions for their dissent. Meanwhile, those connected to financial resources continue to amass wealth at the expense of the broader populace.
The consequences of this economic malpractice are becoming increasingly evident. The so-called wealthy elite have been artificially created through dubious financial practices that prioritize short-term gains over sustainable development. As corruption flourishes, it becomes clear that when accountability is required, it is often the ordinary citizens—the “sheeple”—who bear the brunt of these failures.
It is evident that this new aristocracy will not relinquish its privileges easily. At the same time, there is growing discontent among the populace regarding the empty promises made by political leaders. The Prosperity Party seems entrenched in outdated practices that fail to address contemporary challenges. There is an urgent need for dynamic leadership grounded in critical thought and analytical reasoning—qualities that appear lacking in today’s political landscape.
Despite ongoing challenges, there remains hope for reform. The Prosperity Party must commit to dismantling the entrenched rentier system it has perpetuated. This requires establishing an effective nationwide integrity system that actively involves citizens in governance processes. Economic policies must be scrutinized rigorously by knowledgeable individuals who prioritize sustainable development over bureaucratic inertia.
To combat the rise of this new aristocracy effectively, it is crucial for Ethiopia to adopt a governance model that emphasizes inclusivity and accountability. The current structure must be reformed to eliminate rent-seeking behaviors and promote equitable access to resources for all citizens. This includes re-evaluating how land is allocated and ensuring that credit distribution aligns with national development goals.
Furthermore, fostering an environment where critical discourse is encouraged will empower citizens to engage meaningfully with their government. Transparency must be prioritized at all levels of decision-making, allowing for public scrutiny of policies that impact everyday lives.
Resisting the new aristocracy in Ethiopia requires collective action from all sectors of society. The Prosperity Party must take bold steps toward reforming its policies and practices while engaging with citizens to build a more equitable future. Only through genuine commitment to change can Ethiopia hope to dismantle the structures that have led to widespread disenfranchisement and create an economy that works for everyone—not just a privileged few.
Name: Ekram Ahmad
Education: BA in Social Studies
Company Name: Eku Crafts Plc
Founded in: 2022
What it does: Making different crafts
Head quarter: Addis Ababa
Startup capital: 150,000 birr
Current capital: 500,000 birr
Number of the Employees: None
Reasons for starting the business: Personal interest in weaving, pottery and basketry
Biggest perk of ownership: Freedom
Biggest strength: Being faithful to the work I do
Biggest challenge: Raw material
Plan: To expand more
First Career: None
Most interested in meeting: Abiy Ahmed
Most admired person: My Brother
Stress reducer: Watching movies
Favorite book: Qur’an
Favorite past time: Spending time with my friends
Favorite destination: Dubai
Favorite automobile: None
