Effect of Supply Chain Management Practices on the Performance of the National Health Insurance Authority (NHIA) Medicine Supply Initiative (NMSI) (2020–2024)

The performance of healthcare systems in developing economies is heavily dependent on the resilience and efficiency of medicine supply chains. This study examined the effect of Supply Chain Management (SCM) practices, specifically Strategic Sourcing (SS), Logistics and Distribution Management (LDM), Risk Management Practices (RMP), and Quality Assurance and Control Practices (QAC), on the performance of the National Health Insurance Authority (NHIA) Medicine Supply Initiative (NMSI) in Nigeria (2020–2024). Performance was measured through non-financial and operational metrics, including product availability (stock-out rates), economic efficiency (price affordability), and supply chain responsiveness. Using a descriptive survey design, data were collected from 121 valid strategic stakeholders across the NHIA headquarters, pharmaceutical partners, Drug Management Organisations (DMOs), and NAFDAC. Partial Least Squares Structural Equation Modelling (PLS-SEM) revealed that Strategic Sourcing (β = 0.360, p < 0.001), Logistics and Distribution Management (β = 0.270, p = 0.001), and Quality Assurance (β = 0.167, p = 0.038) significantly and positively affect NMSI performance. Collectively, these variables explain 82.7% of the variance in performance (R² = 0.827). Notably, Risk Management Practices (β = 0.188, p = 0.052) did not meet the threshold for statistical significance at the 5% level. The study concluded robust strategic sourcing and integrated logistics are essential drivers of success in Nigeria's universal health coverage efforts through the NHIA Medicine Supply Initiative. Recommendations include adopting AI-driven procurement analytics and centralized dashboards, accelerating eLMIS deployment with GPS tracking and SSHIS integration, strengthening quality assurance via automated verification, supplier audits, strategic reserves, and multi-sourcing, and enhancing risk management maturity with tailored identification, assessment, mitigation, and early warning tools.

Supply chain performance, Strategic Sourcing, Logistics Management, Risk Management, Quality Assurance

1. Abdi, A. N. (2020). Strategic quality management initiatives and service delivery in the National Hospital Insurance Fund in Wajir County, Kenya [Unpublished Master’s thesis]. Kenyatta University. [Google Scholar] [Crossref]

2. Adala, R. O., Miroga, J., & Malenya, A. (2022). Effect of supplier risk management practices on supply chain performance of County Public Referral Hospital in Western Region, Kenya. The Strategic Journal of Business & Change Management, 9(1), 236–250. [Google Scholar] [Crossref]

3. Adepoju, O. O., & Esan, O. (2023). Risk management practices and workers safety in University of Medical Sciences Teaching Hospital, Ondo State Nigeria. Open Journals of Management Science, 4(1), 1-12. https://doi.org/10.52417/ojms.v4i1.491 [Google Scholar] [Crossref]

4. Alahmad, Y. (2021). The relationship between supply chain management practices and supply chain performance in Saudi Arabian firms. American Journal of Industrial and Business Management, 11(1), 42-59. https://doi.org/10.4236/ajibm.2021.111004 [Google Scholar] [Crossref]

5. Andoh-Adjei, F. X., Boudewijns, B., Nsiah-Boateng, E., Asante, F. A., Van der Wilt, G. J., & Koram, K. A. (2018). Perception of quality health care delivery under capitation payment: a cross-sectional survey. BMC Family Practice, 19(1), 1-12. https://doi.org/10.1186/s12875-018-0721-x [Google Scholar] [Crossref]

6. Balogun, A. K., Ayodimeji-Alaba, H., Adebayo, K. T., & Shodimu, O. A. (2025). Strategic procurement practices in healthcare organizations and their impact on Medicaid and Medicare cost containment. World Journal of Advanced Research and Reviews, 25(01), 1863-1872. [Google Scholar] [Crossref]

7. Barton, L. (2025). The role of strategic sourcing in healthcare supply chain management. Supply Chain Management Review. https://www.scmr.com/article/the-role-of-strategic-sourcing-in-healthcare-supply-chain-management [Google Scholar] [Crossref]

8. Ben-Chioma, A., & Obi, E. (2024). Supply chain management practices and performance of public hospitals in Rivers State, Nigeria. DiamondBridge Economics and Business Journal, 4(2), 25. https://doi.org/10.60089/dbebj.2024.4.2.25 [Google Scholar] [Crossref]

9. Bilinski, A., MacKay, E., Salomon, J. A., & Pandya, A. (2022). Affordability and value in decision rules for cost-effectiveness: A survey of health economists. Value in Health, 25(7), 1141–1147. https://doi.org/10.1016/j.jval.2021.11.1375 [Google Scholar] [Crossref]

10. Boakye, H. M., & Normanyo, S. S. (2018). The impact of effective strategic sourcing on operational efficiency case of Komfo Anokye Teaching Hospital [KATH]. European Journal of Logistics, Purchasing and Supply Chain Management, 6(5), 13-26. [Google Scholar] [Crossref]

11. Damtie, T. A., Ibrahim, A. J., & Yikna, B. B. (2020). Supply chain management performance of HIV/AIDS commodities and factors affecting it. Integrated Pharmacy Research and Practice, 9, 11–21. https://doi.org/10.2147/IPRP.S223842 [Google Scholar] [Crossref]

12. Dawshi, M. Y. M., Alharthi, S. A. A., Qasim, F. F. N. M., Kaaki, W. S. O., Qadhi, A. M. A., Aldaadi, T. T., Alnafeai, M. A. M., Hijazi, A. A. A., Alhakami, R. F. H., Faqeeh, F. T., & Alqarni, M. A. M. (2022). Quality assurance and quality control in clinical laboratories: A review. Migration Letters, 19(S8), 589-598. https://doi.org/10.33329/migrationletters.v19iS8.2541 [Google Scholar] [Crossref]

13. Desale, A., Taye, B., Belay, G., & Nigatu, A. (2013). Assessment of laboratory logistics management information system practice in Addis Ababa, Ethiopia. Pan African Medical Journal, 15, 1–8. https://doi.org/10.11604/pamj.2013.15.46.2495 [Google Scholar] [Crossref]

14. Duque-Uribe, V., Sarache, W., & Gutiérrez, E. V. (2019). Sustainable supply chain management practices and sustainable performance in hospitals: A systematic review and integrative framework. Sustainability, 11(21), 5949. https://doi.org/10.3390/su11215949 [Google Scholar] [Crossref]

15. Elfoghi, R. (2025). Management control and quality indicators in healthcare: a literature review. African Scientific Journal, 3(31), 1616–1634. https://doi.org/10.5281/zenodo.17080027 [Google Scholar] [Crossref]

16. Geamănu, M. (2011). Economic efficiency and profitability. Studia Universitatis “Vasile Goldiş” Arad Seria Ştiinţe Economice, 21(2), 116–119. [Google Scholar] [Crossref]

17. Ghamedi, M. (2025). Risk management practices in the healthcare supply chain: A cross-sectional survey of professionals in Saudi Arabia (Doctoral dissertation). Medical University of South Carolina. https://medica-musc.researchcommons.org/theses/1078 [Google Scholar] [Crossref]

18. Grubor, A., Milićević, N., & Djokic, N. (2016). The effect of inventory level on product availability and sale. Prague Economic Papers, 25(2), 221–234. https://doi.org/10.18267/j.pep.556 [Google Scholar] [Crossref]

19. Hadian, M., Mazaheri, E., & Jabbari, A. (2021). Strategic purchasing and the performance of health-care systems in upper middle income countries: A comparative study. Journal of Education and Health Promotion, 10(84). https://doi.org/10.4103/jehp.jehp_290_20 [Google Scholar] [Crossref]

20. Honda, A., Hanson, K., Tangcharoensathien, V., Huntington, D., & McIntyre, D. (2016). Strategic purchasing in China, Indonesia and the Philippines. World Health Organization. [Google Scholar] [Crossref]

21. Jawab, F., Frichi, Y., & Boutahari, S. (2018). Hospital logistics activities. Proceedings of the International Conference on Industrial Engineering and Operations Management, 3228-3237. [Google Scholar] [Crossref]

22. Kadiane, A., Zhang, G., & Shi, Y. (2023). Impact of supply chain management practices on firm performance in developing economics: An empirical study from Cote d’Ivoire Agrifood companies. Qingdao University & Macquarie Business School. https://ssrn.com/abstract=4335131 [Google Scholar] [Crossref]

23. Kipo-Sunyehzi, D. D. (2021). Quality healthcare services under National Health Insurance Scheme in Ghana: perspectives from health policy implementers and beneficiaries. Public Administration and Policy, 24(3), 320–332. https://doi.org/10.1108/PAP-08-2021-0047 [Google Scholar] [Crossref]

24. Klasa, K., Greer, S. L., & van Ginneken, E. (2018). Strategic purchasing in practice: comparing ten European countries. Health Policy, 122(5), 457-472. https://doi.org/10.1016/j.healthpol.2018.03.010 [Google Scholar] [Crossref]

25. Kutzin, J. (2013). Health financing for universal coverage and health system performance: concepts and implications for policy. Bulletin of the World Health Organization, 91(8), 602-611. https://doi.org/10.2471/BLT.12.113985 [Google Scholar] [Crossref]

26. Leung, N. Z., Chen, A., Yadav, P., & Gallien, J. (2016). The impact of inventory management on stock-outs of essential drugs in Sub-Saharan Africa: Secondary analysis of a field experiment in Zambia. PLoS ONE, 11(5), e0156026. https://doi.org/10.1371/journal.pone.0156026 [Google Scholar] [Crossref]

27. Mekonen, Z. T., Cho, D. J., & Fenta, T. G. (2025). Logistics management information system (LMIS) for health commodities at public health facilities in Amhara National Regional State of Ethiopia: A data quality evaluation survey. Journal of Multidisciplinary Healthcare, 18, 255–266. https://doi.org/10.2147/JMDH.S486404 [Google Scholar] [Crossref]

28. Mohamed, A. I., & Bett, S. (2018). Strategic resources and performance of commercial banks in Kenya. International Academic Journal of Human Resource and Business Administration, 3(3), 218–242. [Google Scholar] [Crossref]

29. Mohammed, I. A., & Mandal, J. (2023). The impact of lead time variability on supply chain management. International Journal of Supply Chain Management, 8(2), 41–55. https://doi.org/10.47604/ijscm.3075 [Google Scholar] [Crossref]

30. Musau, E. G. (2020). Supply chain management and organizational performance among Kenyan textile firms. International Journal of Managing Value and Supply Chains, 11(3), 17-28. [Google Scholar] [Crossref]

31. Nwankwo, S. I. (2021). Evaluating logistics and supply chain management in Nigerian health sector. International Journal of Academic Management Science Research, 5(10), 78-88. [Google Scholar] [Crossref]

32. Nyaude, F., & Maunganidze, D. (2024). The influence of supply chain responsiveness elements on order fill rate in apparel industry: A case study of apparel shops in Harare CBD. International Journal of Research and Innovation in Social Science, 8(7), 626-647. https://dx.doi.org/10.47772/IJRISS.2024.807053 [Google Scholar] [Crossref]

33. Obiri-Yeboah, H., Amoatey, C. T., Ottou, J., & Yirenkyi-Fianko, A. (2025). Supply chain management practices and the organizational performance of manufacturing SMEs in an emerging economy: the mediating role of supply chain performance. Modern Supply Chain Research and Applications, 7(3), 372–403. https://doi.org/10.1108/MSCRA-12-2024-0057 [Google Scholar] [Crossref]

34. Okoduwa, I. O., Imade, E. E., Jimoh, I. A., & Enagbonma, B. J. (2025). The effect of logistics management on the performance of small and medium pharmaceutical companies in Southern Nigeria. The Nigerian Journal of Pharmacy, 59(1), 91-99. https://doi.org/10.51412/psnnjp.2025.09 [Google Scholar] [Crossref]

35. Olayiwola, S. O., & Adeyemi, F. O. (2022). Strategic health purchasing and health system performance in Nigeria. International Journal of Research and Innovation in Social Science (IJRISS), 6(7), 238-246. [Google Scholar] [Crossref]

36. Omoush, M. M. (2020). Investigation the relationship between supply chain management activities and operational performance. International Business Research, 13(2), 1-74. [Google Scholar] [Crossref]

37. Oriri, T., & Okibo, W. B. (2015). Influence of supplier quality management practices on procurement performance of National Hospital Insurance Fund, Kisii County, Kenya. International Journal of Social Sciences and Information Technology, 1(4), 1-19. [Google Scholar] [Crossref]

38. Owich, J. A., & Odero, J. A. (2023). Supplier risk management practices and performance of supply chain in the health sector in Kenya. African Journal of Empirical Research, 4(2), 375-383. https://ajernet.net/index.php/ajernet/article/view/174 [Google Scholar] [Crossref]

39. Padmane, G. T., Meshram, S. A., & Sarode, R. P. (2024). Risk management frameworks in healthcare supply chains: A comprehensive review. SSRG International Journal of Mechanical Engineering, 11(10), 96-108. https://doi.org/10.14445/23488360/IJME-V11I10P109 [Google Scholar] [Crossref]

40. Pedroso, C. B., Schneller, E., Rebolledo, C., & Beaulieu, M. (2025). Translating strategies into tactical actions: The role of sourcing levers in healthcare procurement. Hospitals, 2(2), 12. https://doi.org/10.3390/hospitals2020012 [Google Scholar] [Crossref]

41. Priyanka, S. P., Dath, T. N. S., & Kumar, K. M. S. (2024). Enhancing the hospital performance through strategic implementation of supplier relationships and evaluations in real-time sector-specific problems in developing countries. Educational Administration: Theory and Practice, 30(4), 1354-1364. [Google Scholar] [Crossref]

42. Ridde, V., Yaogo, M., Zongo, S., Somé, P. A., & Turcotte-Tremblay, A. M. (2018). Performance-based financing in Africa: time to test measures for equity. International Journal of Health Services, 48(3), 549-561. https://doi.org/10.1177/0020731418779508 [Google Scholar] [Crossref]

43. Sangwa, N. R., & Sangwan, K. S. (2018). Development of an integrated performance measurement framework for lean organizations. Journal of Manufacturing Technology Management, 29(1), 41-84. https://doi.org/10.1108/JMTM-06-2017-0111 [Google Scholar] [Crossref]

44. Senna, P., Reis, A. D. C., Marujo, L. G., Guimarães, J. C. F. D., & other authors. (2023). The influence of supply chain risk management in healthcare supply chains performance. Production Planning & Control, 35(12), 1-16. https://doi.org/10.1080/09537287.2023.2182726 [Google Scholar] [Crossref]

45. Shakya, J., Baijal, R., & Khatik, R. K. (2025). Study of health care quality management practices effect on the performance of the hospitals. IOSR Journal of Business and Management (IOSR-JBM), 27 (3), 72-81. https://doi.org/10.9790/487X-2703087281 [Google Scholar] [Crossref]

46. Shama, A. T., Roba, H. S., Abaerei, A. A., Gebremeskel, T. G., & Baraki, N. (2021). Assessment of quality of routine health information system data. BMC Medical Informatics and Decision Making, 21(1), 1–12. https://doi.org/10.1186/s12911-021-01485-y [Google Scholar] [Crossref]

47. Sikandar, H. K., Kureshi, N., Aslam, M. S., & Rafique, S. (2023). Balance scorecard (BSC): Incorporating “Key performance indicators” (KPI) in the evaluation of the healthcare system. Pakistan Armed Forces Medical Journal, 73(6), 1855-1858. https://doi.org/10.51253/pafmj.v73i6.10461 [Google Scholar] [Crossref]

48. Sumankuuro, J., Griffiths, F., Koon, A. D., Mapanga, W., Maritim, B., Mosam, A., & Goudge, J. (2023). The experiences of strategic purchasing of healthcare in nine middle-income countries: A systematic qualitative review. International Journal of Health Policy and Management, 12(1), 1-21. https://doi.org/10.34172/ijhpm.2023.7409 [Google Scholar] [Crossref]

49. Suryani, D., & Nurmala. (2024). Analysis the effect of service quality supply chain management healthcare product towards hospital and clinical laboratories satisfaction. Quantitative Economics and Management Studies (QEMS), 5(1), 100–109. https://doi.org/10.35877/454RI.qems2199 [Google Scholar] [Crossref]

50. Świtała, M., Cichosz, M., & Trzęsiok, J. (2019). How to achieve customer satisfaction? Perspective of logistics outsourcing performance. LogForum, 15(1), 39-51. https://doi.org/10.17270/J.LOG.2019.315 [Google Scholar] [Crossref]

51. Tangcharoensathien, V., Limwattananon, S., Patcharanarumol, W., Thammatacharee, J., Jongudomsuk, P., & Sirilak, S. (2015). Achieving universal health coverage goals in Thailand: the vital role of strategic purchasing. Health Policy and Planning, 30(9), 1152-1161. https://doi.org/10.1093/heapol/czu120 [Google Scholar] [Crossref]

52. Tanzubil, B. J., & Veeraiyah, D. (2025). Effect of logistics management practices on medical diagnostic efficiency in public hospital facilities in Ghana. African Journal of Applied Research, 11(5), 148-172. https://doi.org/10.26437/ajar.v11i5.656 [Google Scholar] [Crossref]

53. Upadhyay, S., Weech-Maldonado, R., Lemak, C. H., & Stephenson, A. L. (2020). Resource-based view on safety culture’s influence on hospital performance. Health Care Management Review, 45(3), 207–216. https://doi.org/10.1097/HMR.0000000000000222 [Google Scholar] [Crossref]

54. Wilson, S. (2025). The importance of strategic sourcing in healthcare. Tradogram Blog. https://www.tradogram.com/blog/the-importance-of-strategic-sourcing-in-healthcare [Google Scholar] [Crossref]

55. Xiong, J., He, Z., Deng, Y., Zhang, M., & Zhang, Z. (2017). Quality management practices and their effects on the performance of public hospitals. International Journal of Quality and Service Sciences, 9(3/4), 383-401. https://doi.org/10.1108/IJQSS-02-2017-0019 [Google Scholar] [Crossref]

• The Impact of Ownership Structure on Dividend Payout Policy of Listed Plantation Companies in Sri Lanka
• Urban Sustainability in North-East India: A Study through the lens of NER-SDG index
• Performance Assessment of Predictive Forecasting Techniques for Enhancing Hospital Supply Chain Efficiency in Healthcare Logistics
• The Fractured Self in Julian Barnes' Postmodern Fiction: Identity Crisis and Deflation in Metroland and the Sense of an Ending
• Impact of Flood on the Employment, Labour Productivity and Migration of Agricultural Labour in North Bihar