Supply Annual Report 2018
background image©️ UNICEF/UN0202777/Hibbert
Chapter 1

Creating Shared Value

Fit-for-purpose products through the decades

For more than seventy years, UNICEF has worked with governments and engaged with businesses and partners to develop products and deliver them at scale, so that as many children as possible can benefit. In more recent years, UNICEF’s impact on children’s lives has been enhanced by guiding research and development, encouraging innovation to solve identified problems and supporting more local production.

Click on the years to read
1950's
1970's
1980's
1990's
2010's
1940's
1980's
1990's
2000's

Products & markets futures

UNICEF leverages the strengths of public and private sector partners to drive results for children through product innovation and scale-up.

Children and young people need access to a range of products that are designed to meet their needs for health, safety and well-being at various stages of life. The chart on the left shows a selection of products that UNICEF is trying to encourage businesses to bring to market or scale up to better address those needs. The list is not exhaustive and many of these products and projects are interlinked.

The timeline considers the organization’s aspirations but also challenges that need to be resolved such as overcoming scientific, legal and commercial hurdles. In dealing with these challenges, UNICEF draws on its long experience in influencing markets and driving innovation to assess the difficulty of achieving each target.

Have a look at the targets. UNICEF welcomes input from any potential supplier or partner that can advance the rights of children and young people. If you have an idea or product and are interested in helping UNICEF and others create shared value for children, please email us at innovateforchildren@unicef.org.

WHICH SUPPLY TARGETS COULD HAVE THE BIGGEST IMPACT FOR CHILDREN?

Difficulty to scale
2018
2021
Projected year scaling achieved
2026
2030
icon
Magnitude of potential impact

Turning inspiration into reality: From plastic waste to classrooms

In Côte d’Ivoire, UNICEF is facilitating an innovative project to build classrooms from bricks of recycled plastic. While this started as a pilot partnership to construct 30 classrooms, the project is now being scaled up nation-wide. Joining forces and leveraging strengths, UNICEF, business and the Government innovated together to develop solutions for children and the community with high-quality school facilities – creating local jobs and recycling plastic waste.

UNICEF identified this innovative use of non-recycled plastic to create building materials and pursued the opportunity to use them in school construction. A company had developed a method of making building bricks out of non-PVC plastic waste using a ‘building-block’ design that reduces production costs and makes the bricks more affordable and easier to assemble than traditional methods. UNICEF worked with the company to establish a pilot project to test the material’s suitability for the construction of long-lasting classrooms.

In May 2018, the first classroom was ready, with the work completed in just five days. With the success of the project, the Government allocated land to establish a local brick production facility and donors confirmed funding. UNICEF provided special contracting to help the company establish local production in Côte d’Ivoire. In the next phase, a projected 528 classrooms will be built and reach approximately 26,000 students.

This project is a good example of sharing investments and developing solutions to create value for children together. The brick manufacturer is extending its market access and providing a social good. The Government is receiving support to develop educational infrastructure.

And crucially, the project’s main goal to improve school facilities for children is advancing UNICEF’s mandate to fulfil their right to education. The success of the project shows how UNICEF, business and governments can work together for children and boost local economies in pursuit of the Sustainable Development Goals.

EXPECTED PROJECT IMPACT

  • Material lasts

    50 YEARS

    longer than
    traditional bricks
  • 40%

    cost savings compared with traditional bricks
  • Contributes to a

    CLEANER ENVIRONMENT

  • EMPLOYMENT OPPORTUNITIES

    for local communities

Creating solutions for children and others with impaired mobility in emergencies

UNICEF procures flat plastic latrine slabs to be used in the construction of temporary sanitation facilities during emergencies. However, to ensure that these facilities are accessible for children with disabilities, and others with mobility challenges, businesses were encouraged to develop modified designs for equitable latrine access.

UNICEF communicated broad product requirements to potential suppliers in 2017 and received five prototype proposals from interested businesses. Following a rigorous evaluation process, two designs were selected and then tested in Angola. Both designs feature a modified seat with handrails that can be placed over the plastic slab – allowing users to sit and stabilize themselves while using the latrine.

The trials were conducted in March 2018. Listening to the reactions of target users and observing their response are essential aspects of testing. Special care must also be taken to ensure that the design is culturally acceptable and easy to use.

In this case, the feedback from users and those who assembled and cleaned the latrine slabs included recommendations to modify the handrail and seat designs to be more comfortable, to strengthen their durability and stability and to improve guidance for installation and cleaning. Thanks to the engagement of the target users and community the designs have now been improved and in 2019 additional trials will take place at refugee camps in Bangladesh.

The guidance provided by UNICEF helped businesses to modify their products to be more fit-for-purpose. Children with disabilities and others living under emergencies will benefit from having an accessible and dignified way to use latrines. UNICEF will include the final designs in its Supply Catalogue by 2020.

ILLUSTRATIONS OF THE TWO ACCESSIBLE LATRINE SLAB ADD-ONS BEING TESTED

These illustrations show how each business has taken a different approach to the product’s design. Testing with end users is essential to fine tune the designs to better meet the needs of children with disabilities.

Design ADesign B
design
seat add-on
handrails
design
seat add-on
handrails

Creating shared value through market influencing

In 2000, the development of a new product – ready-to-use therapeutic food (RUTF) – revolutionized the treatment of children suffering from severe acute malnutrition worldwide. To scale up programmes, UNICEF used its convening power with other key actors to lead a range of interventions to achieve a healthy market, with international and local production of quality assured products.

RUTF will bring a severely malnourished child back to health in six to eight weeks. It contains all the core nutrients a child needs – carbohydrates and fats, proteins and vitamins – combined in a soft paste. It does not need to be cooked or mixed with water, it can be eaten directly from the sachet and it requires no refrigeration.

In the early 2000s, UNICEF had been working with global partners to develop the community-based management approach to malnutrition for non-complicated cases of severe acute malnutrition as an alternative to facility-based treatment. This accelerated demand for RUTF. Initially procurement was only possible from the original supplier based in France, but demand was rising and transport costs were high, especially when the product needed to be airlifted during an emergency. The supplier established a franchisee network that started with a second manufacturing plant in Niger. This second company was approved as a UNICEF supplier in 2006.

Together with partners, UNICEF established quality standards and requirements for both manufacturing facilities and the product itself. New suppliers were encouraged to enter the market, mostly by providing them with technical guidance on how to meet the quality standards and by improving visibility on procurement needs.

As the number of suppliers grew, competitive tendering, long-term arrangements and strategic awarding of contracts were used to support the development of a healthy market.

In recent years, UNICEF’s strategic approach has focused on supporting the development of a local supplier base for RUTF. Where products are manufactured closer to the children that need them, supply chains become more efficient and have an improved environmental impact (e.g. shorter lead times, lower shipping costs and a lower carbon footprint).
A bonus is the potential contribution to local economies.

IMPACT OF MARKET SHAPING Between 2006 and 2018:

The average price of RUTF decreased by
14%
Local procurement of RUTF increased from
6%to65%

In 2018, UNICEF procured RUTF from 20 suppliers, 17 of which were based in programme countries, representing 65 per cent of the procurement volume. The average weighted price decreased by nearly 14 per cent between 2006 and 2018.

Looking forward, new formulations are being developed, using alternative ingredients that may better suit local availability for some ingredients and user preferences, as well as reducing production costs further.

The value created through this approach has been multifaceted. Through strategic engagement with the industry, the implementation of sound procurement approaches, and support to the development of the regulatory and normative framework for RUTF, UNICEF shaped the development and expansion of the RUTF market. This included developing a significant supplier base in programme countries and a dramatic increase in production capacity. Businesses have been able to enter the market, meet higher quality standards and become exporters. And most importantly, children are being better served by an essential and quality assured product that is produced close to where it is most needed.

UNICEF RUTF LOCAL AND GLOBAL SUPPLIER BASE IN 2018

IndiaMadagascarKenyaMalawiSouth AfricaSudanUnited StatesFranceHaitiNigerEthiopiaSierra LeoneBurkina FasoNigeria

Suppliers (1 dot represents 1 supplier):

Suppliers in programme countries
Suppliers for global procurement
This map does not reflect a position by UNICEF on the legal status of any country or territory or the delimitation of any frontiers.

Sanitation market shaping to bridge supply and demand

UNICEF has increasingly played a role in influencing global markets to procure products that improve living conditions for children. Today, a new market shaping approach aims to help develop self-sustaining supply and demand chains for household toilets and sanitation services, by catalysing change in local markets – independently of UNICEF’s procurement.

UNICEF is working to enable access to adequate and equitable sanitation for children and their families and to end open defecation by 2030 – a key target of the Sustainable Development Goals. One barrier hindering progress is that sanitation systems and products are often not adequately available or affordable in local markets, especially for the poor and marginalized. In addition, local markets depend on the efficiency of national markets, and often on regional networks as well. Often, such markets are ‘fragmented’, meaning that no single entity has enough influence to move the industry in a new direction. Therefore, major collective efforts are required to accelerate progress.

It is in this context that UNICEF launched its Sanitation Market Shaping Strategy in 2018 to support the development of healthy and sustainable local markets for household toilets and sanitation services. A healthy market will help ensure that basic, safely-managed sanitation is available to all populations. UNICEF is building on its market shaping expertise and leveraging its convening power to stimulate local sanitation markets, working with businesses and governments to identify and remove market barriers and catalyse market improvements.

In November 2018, UNICEF convened a landmark regional Sanitation Industry Consultation in Abuja, Nigeria. This brought together key stakeholders to collectively identify solutions to make toilets and sanitation services more affordable and accessible for households in west Africa. (In Nigeria alone 46.5 million people practise open defecation.) Government agencies, financial institutions and more than 30 local and international sanitation product manufacturers attended from Côte d’Ivoire, Ghana and Nigeria.

The consultation identified opportunities to improve the functioning of local, national and regional markets. These included reducing fragmentation in the markets by working collectively for change, increasing transparency through improving market information flows and offsetting some of the risks that suppliers face to incentivize their active market participation.

Based on this dialogue, UNICEF is moving forward in collaboration with the individual countries, industry and partners to design country-specific market shaping interventions. These may include new procurement and financing mechanisms; strengthened supply chains; enhanced ways to bridge demand and supply; and the development of a market environment more conducive to the needs of the population.

By leveraging UNICEF’s expertise and local presence, we convene the right players and together help drive change. We can then learn, refine and develop modalities to address other markets worldwide so that they can respond adequately to the needs of local populations.

WHAT WILL IT TAKE TO GET THERE?

UNICEF is using a new approach in market shaping to facilitate local markets and catalyse change to help build self-sustaining supply and demand chains. The elements of this approach are illustrated here:

MARKET SHAPING FACILITATORS

  • Bridge supply and demand
  • Develop national supply chains and distribution networks
  • Increase availability of fit-for-purpose product systems
  • Advocate for more conducive business environment
  • Stimulate new and existing suppliers
  • Increase sanitation market information

Leveraging the power of business relationships to curb a measles outbreak

Vaccine procurement is a continuous balancing act. It requires observation of a disease’s trajectory, data-driven forecasting and decisive action when needed. Essential to this is vaccine availability, enhanced by strong relationships with manufacturers.

UNICEF supplies vaccines to reach nearly half of the world’s children under five years old. Over the last five decades the measles vaccine has become widely available. Global deaths from the disease fell by 80 per cent during the period 2000–2017 alone.

But the threat from the disease has not gone away. In 2017, there were approximately 110,000 measles-related deaths globally, even though the disease is preventable through vaccination. Most of these victims were children: on average, 300 die from measles-related illnesses every day.

In 2018, an outbreak of measles in Georgia caused more than 2,200 men, women and children to be infected over the course of the year. Insufficient levels of immunization against the disease contributed to the outbreak.

Consequently, there was a sudden increased demand for the vaccine, which Georgia’s routine immunization stock was insufficient to meet. UNICEF was then able to support the Government by procuring emergency doses on its behalf. The terms of an existing long-term arrangement with a vaccine manufacturer meant that UNICEF could secure access to 100,000 doses to meet the unforeseen demand. The strong relationship with the manufacturer was instrumental in ensuring a rapid response.

As countries strengthen their health systems and implement routine immunization, the risk of the disease is lowered. However, when immunization coverage rates are not as high as they should be, populations can become vulnerable to outbreaks. As a result of lower coverage rates, even populations in some middle- and high-income countries with developed health systems have recently become vulnerable to a measles resurgence.

Because measles is highly contagious, vaccination coverage within a population should be at least 95 per cent and involve two doses of measles-containing vaccine. But as populations benefit from immunization, the incidence of a disease becomes rarer and people may forget that it remains a threat. The subsequent uncertainty in demand can be challenging for countries trying to forecast necessary stock levels for their programmes.

Uncertainty in demand can also impact the planning of production capacity for manufacturers. If a manufacturer overproduces, there is a risk of waste and increased costs. If it underproduces, sufficient doses of vaccine may not be available to respond to an outbreak such as the one in Georgia.

Good forecasting accuracy can also contribute to the sustainable reductions in vaccine prices. When manufacturers are confident of the accuracy of expected vaccine needs, they can achieve efficiencies in their production lines and reduce costs.

UNICEF works with vaccine suppliers continuously as part of its vaccine security strategy, so that surges in demand can be prepared for and responded to quickly. By continuing to work closely with businesses on the supply side and support governments to deliver their immunization programmes on the demand side, UNICEF and partners are leading efforts to protect children from this preventable disease.

End-to-end visibility and stock management in the supply chain

Monitoring and visibility along the entire supply chain is necessary to ensure that essential products reach children who need them.

Ensuring therapeutic food is available when a child needs it

Health facilities in Malawi were experiencing stock-outs of key nutrition products, such as ready-to-use therapeutic food to treat severe acute malnutrition. The categorization of these products as food rather than therapeutic food meant that they were not forecasted, delivered or monitored. To address this, the Government integrated nutrition products into the national health supply chain system.

The Ministry of Health transferred responsibility for therapeutic food from nutrition focal points at health facilities to district pharmacists, to be managed and dispensed like any other health product. UNICEF supported the Government to improve monitoring and reporting.

Management of the products along the supply chain has now improved. Health facilities have greater product availability due to improved supply chain monitoring and visibility. The percentage of facilities reporting through the national system has increased from 76 per cent to over 90 per cent. The Government and partners now have the necessary data to identify districts or facilities that may need closer monitoring or follow-up to prevent stock-outs, leakage or overstocking.

Visibility for Vaccines platform

The Visibility for Vaccines online platform is a stock monitoring tool that visualizes vaccine stocks, orders and forecasts at country and sub-country level. Developed by UNICEF for use by countries, it supports immunization managers and vaccine supply chain managers at ministries of health to take informed decisions, so that the right amounts of the right vaccines reach children in a timely manner.

By sharing vaccine pipeline and stock information, the tool enables governments to identify risks of stock-out or overstocking and to liaise with partners to take preventive action. The user-friendly graphical interface together with the detailed data, help users interpret information quickly and accurately and enable them to more effectively communicate calls for action to stakeholders.

In 2018, the platform has continued to gain traction: 28 countries were using it, an increase of 50 per cent over the previous year. This includes Myanmar and Afghanistan which are using the system at sub-national level. UNICEF is supporting 13 additional countries with their preparations for adopting the platform in 2019.