Strengthening supply chains for future emergency response

In India, each wave of the COVID-19 pandemic uncovered weak links within public and private health care systems as they became overwhelmed with the unprecedented crisis.

With the second wave came steep demand for resources in a very short time, pushing the health care supply chain to—and in some places, beyond—its limit. In some cases, families and patients scrambled to procure medicines and arrange for medical treatment themselves.

The COVID-19 experience has been devastating, but it has armed us with important tools and lessons that we can leverage to address the underlying frailties that fracture health care supply chains.

Maintaining a steady supply of critical, lifesaving medicines and consumables to hospitals, pharmacies, and patients is incredibly complex, even at the best of times. Health care supply chains must adopt processes and technologies that enable them to expand and shrink as needed.

Traditionally, supply chain decisions are driven by the costs of doing business, from procurement and production costs, to shipment and transportation costs, to the cost of unmet orders. Policymakers have traditionally focused on making supply chains more efficient, to spend as little per unit as possible.

However, the COVID-19 crisis taught us that when it comes to health and saving lives, effectiveness—that is, making the right things available at the right place at the right time—becomes vastly more important than efficiency. One of the defining features of an effective supply chain is its agility—how quickly it can adjust its operations and respond to sudden changes.

Agility is not only about the ability to respond quickly but also about predicting when emergencies might happen in the future. With early warning systems and forecasting capabilities, supply chains and wider public health systems will be better able to plan for the future to create a more resilient and responsive supply chain that can change course in an orderly fashion.

Successful pandemic response will require preparation, resource allocation, and skill building to strengthen supply chains during non-pandemic times.

Throughout the pandemic, health systems adopted innovative ways to leverage new data sources and technological solutions, all of which can also strengthen supply chains. With the right technology, stakeholders along the value chain, from manufacturers and suppliers to service delivery points and consumers, can connect and share information in new ways to better meet their respective needs.

For instance, during initial COVID-19 lockdowns, many consumers began purchasing essential goods online. E-commerce companies with advanced predictive modeling were able to meet the demand that surged over a short period of time. Leading e-commerce company JD, for example, forecasted demand using data such as historical demand, previous emergencies’ demand patterns, search index data from social media, and COVID-19 data.

The combination of large volumes of real-time data and advanced predictive analytics techniques can improve planning across the health care supply chain. Data and analytics are critical for ensuring demand is anticipated and supplies get to the right place, at the right time, and in the right quantities.

For this to work, stakeholders must be willing to share data with each other—even with their competition. Visibility across the supply chain—for inventory planning, selecting the right partners, identifying delivery points, or reducing wastages and stockouts— is pivotal to effective decision-making.

Facilities must also diversify procurement. Even if branching out to farther suppliers comes with higher costs, reduced dependency on any single region or supplier can mean the difference between having and not having critical health care supplies.

While the last mile continues to pose the most formidable challenges with the supply chain system, we must also address middle-mile challenges. These include storage and movement of the commodities from warehouses to health facilities.

Warehousing and transportation are both cost-intensive components in the supply chain process. These challenges can significantly slow responses to a health emergency.

Without adequate storage infrastructure at well-connected locations with temperature-controlled facilities, bottlenecks upstream are common. And without adequate transport vehicles that meet size and other specifications, it is difficult to move products to where they are needed.

For example, throughout the pandemic, many places that had oxygen available in industrial plants still experienced severe oxygen shortages because there weren’t enough cryogenic tankers for delivery or oxygen storage capacities at hospitals to get the oxygen to the patients who needed it.

India must strengthen its infrastructure to better transport, store, and distribute health care commodities. The COVID-19 pandemic will not be the last crisis to disrupt health care systems and supply chains. Indeed, even before the pandemic, states, districts, and hospitals often reported shortages or stockouts of medicines, equipment, or consumables.

It may not be possible to avoid supply chain disruptions, but we can better prepare for future disruptions by leveraging data and advanced analytics for improving the timely allocation of resources. With an openness to reimagining supply chain strategies, we can repair the vulnerabilities the pandemic has highlighted. The stakes have never been greater.