Page 195 - GHES-3-1

Global Health Economics and
Sustainability
Outsourcing last-mile delivery

1.4.1. Contribution to industry 1.7.3. Essential medicines

This study’s practical contributions are evident in its Medications used within the basic health-care system,
implications for health-care managers and policymakers. which are known for their efficacy, safety, and cost-
The study results show that using 3PL providers can reduce effectiveness in treating priority health conditions (World
operational costs by 23% reduction and improve timely Health Organization, 2019).
deliveries by 77%, illustrating the potential for cost savings
and service enhancements. This evidence empowers 1.7.4. Last-mile delivery
health-care administrators to make informed decisions on The final step in the delivery process is where a product is
leveraging private sector capabilities for improved supply transported from a hub to its destination, such as a health
chain efficiency, especially in the public health domain. facility for health products.
In addition, by adopting this study’s 3PL 1.8. Literature review
“QUICKSILVER” model, health-care organizations can
enhance delivery speed and patient satisfaction while This review encompasses the existing literature on
maintaining operational sustainability. This model can outsourcing logistics by organizations using 3PL providers,
inspire private logistics startups to develop competitive emphasizing the benefits and trends in this practice. This
services that challenge in-house operations, driving study also explores the use of 3PL in last-mile delivery,
innovation in the sector. particularly within the health-care sector, and discusses
the management of contracts and relationships between
1.4.2. Limitations of the study organizations and 3PL providers.
The results of this study are only generalizable to only one
organization – the NSDHCMA Minna, Niger State. Another 1.9. Broader concepts: Industry and dependent
limitation is this study’s small sample and the fact that the variables
research was conducted in one location: Minna, Niger State. Outsourcing supply chain functions has become
integral to organizational processes globally. Many
1.5. Future research focus organizations are increasingly adopting this practice due
Future research using cross-sectoral data instead of to its numerous benefits, such as reduced operational
organizational data is needed to study 3PL and last-mile costs, enhanced flexibility, and improved logistical service
delivery logistics. operationalization. Agrawal et al. (2016) and Dittmann
(2015) note that while supply chain costs in health care
1.6. Scope of the research have historically been high, accounting for over 50% of total
This study encompasses three main vectors. The first vector costs, the industry has lagged others regarding supply chain
is the subject matter – outsourcing last-mile delivery of maturity. However, there has been a growing shift toward
essential medicines using 3PL services and its relationship embracing excellence in supply chain cost management,
with reduced direct transportation costs, increased and health-care organizations are increasingly engaging
timely delivery to end-users, and enhanced customer 3PL providers to implement best practices from other
satisfaction. The second vector includes the actors involved industries.
in outsourcing through 3PL, such as the NSDHCMA, 3PL Global supply chains are complex, necessitating
service providers, health-care workers requesting the collaboration among various providers, often leading
drugs, and end-user patients. The third vector pertains to outsourcing some or all supply chain functions to
to the geographic location of the outsourcing activities, 3PLs (Manotas-Duque et al., 2016). In Sub-Saharan
specifically Minna, Niger State.
Africa, physical barriers in rural areas pose significant
1.7. Operational definitions challenges to the efficient delivery of health-care
products, particularly in last-mile delivery (Sahebi and
1.7.1. 3PL provider Helo, 2021). Village Reach (2016) highlights that rural
An external organization that provides outsourced logistics health facilities are often far from district and regional
services, which may include transporting products on storage facilities. Moreover, the multi-tiered, complex
behalf of another organization. supply chains in low-income countries, inadequate data
flow, and vehicle maintenance issues further complicate
1.7.2. DMAs logistics. Consequently, outsourcing the last-mile delivery
Government agencies are responsible for the procurement, of essential medicines to private sector 3PL providers
warehousing, and distribution of essential medicines to is increasingly being considered to enhance efficiency
health facilities within a state in Nigeria. (Village Reach, 2016).

Volume 3 Issue 1 (2025) 187 https://doi.org/10.36922/ghes.4714