Pandemic Resilience

SUPPLY CHAIN

Numerous supply chains within healthcare have underperformed or been pressured to breaking point during the pandemic. In this chapter we will present our study of the covid pandemics influence on supply chains within healthcare. You will be presented for case studies observed during the covid pandemic.

Chain Structures

These experiences emphasis the need to collect learnings and experiences of supply chain failures and restructuring during the pandemic. These experiences need then to be taken into consideration when re-establishing and rebuilding more robust and resilient systems going forward.

Just-in-time supply

The crisis has demanded both an extension of intensive and isolating capacity and facilities in hospitals around the world. It has also demanded the need to build completely new facilities for testing of citizens. Additionally, many supplies have been in much higher demand than usual, ranging from face masks, protective gear, medical ventilators, medicine etc. This has created a slack in production, for many necessities.

The medical global supply chain within the healthcare system has historically been built on a just-in-time philosophy[1]. The philosophy implies that medical supplies are produces and ordered to meet the current demand, not in advance of need. Meaning that in many healthcare systems supplies are essentially delivered daily[2]. The reason for this is that the just-in-time philosophy is built on the idea that “inventory is waste”, and therefore calls for lean inventories and tight connections between healthcare system and their suppliers. All this is to secure lower costs by avoiding the risk of obsolescence and to tie up cash. Furthermore, it is not required by the healthcare system to have a vast infrastructure to accommodate distribution[3].

Supply chains are therefore highly depending on reliable and timely deliveries. However, covid pandemic has not only challenged healthcare system and their capacity around the world, but also caused major global disruption in production and transportation of all sorts of goods – impacting the production and delivery of medical goods. This causes a need for healthcare systems around the world to balance between cost effectiveness and lean productions on the one hand side and being prepared and self-sufficient for possible likely outbreaks on the other hand side. A balance, that has been highly challenged during the last year.

New Ways of Working

During the pandemic the measures and ways of securing healthcare related supply chains have been different, when looking at it on a global, national, regional on to a local level. Making it clear that different layers within the supply chain call for different actions and regulations both now and in the future.

During the pandemic, supply chains have experienced following disruptions:

  • Different layers of regulations for supplies, ranging from global, national, regional and local affect the ability to improve, expand or speed up the arrival of supplies.
  • Necessity for acquired supplies not previously used in normal operations – resulting in lack of supply chain transparency and resilience, as well as unsustainable just-in-time manufacturing
  • Missing plans or procedures for the distribution of supplies
  • Ranking and evaluating where the greatest risks and therefore needs are

During our study, we have found that there is not one-size-fits-all to the disruption of supply chains during the pandemic. Instead solutions have been found and created on different organizational ranging from global or cross-national organizations onto locally applied securing of necessary supplies. Nonetheless, there have been a few overall learnings on supply chains, that indicates that the line of supply needs to be reorganized or reconsidered in the future to a more resilient solution supporting the ability to adapt to larger variations in demand.

Scope of reach

In the next section, we present cases where systems or nations have been able to mitigate or otherwise adapt to the challenges within their supply chains and create new ways of ensuring efficient flows of supplies. We have looked at solutions on several levels both local and global and on solutions from different angles. This however also underlines the need to reevaluate healthcare supply chains in the future, particularly on a national level, where several healthcare systems are expected to implement a number of new measures and initiatives, that create more independent chains of supplies.

Local

Coordination and security of the supply of protective gear for primary & secondary healthcare sectors

Local coordination groups and information systems were therefore established and alternative supplies possibilities within the local community were investigated.

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National

Establishment of a national coordinated action for medical supplies

Quickly after the pandemic unfolded across geographies, governments and national healthcare organizations experienced a great demand for medical supplies.

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International

Coordination between nations facing different issues of supply shortage

The covid pandemic has resulted in a great focus on local and national solutions regarding the securement of medical supplies.

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Local

Coordination and security of the supply of protective gear for primary & secondary healthcare sectors

 

Local healthcare units, hospitals and governments experienced early in the pandemic a shortish of personal protective equipment (PPE) and a coordinated overview in order to secure the necessary protection for the healthcare staff. Local coordination groups and information systems were therefore established and alternative supplies possibilities within the local community were investigated.

Northamptonshire, UK

Local distribution systems

The trust created an IT-system that could help them with the coordination and overview of medical supplies in the county trust.


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Northern Care Alliance, UK

Alternative protective supplies

Another strategy that have been widely applied, on a local level, haven been seeking alternative manufacturing solutions for personal protective equipment.

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National

Establishment of a national coordinated action for medical supplies

Quickly after the pandemic unfolded across geographies, governments and national healthcare organizations experienced a great demand for medical supplies. With different healthcare organizations within countries all trying to buy the same equipment, there was a delivery uncertainty and an escalating pricing of available goods. Furthermore, the number of medical supplies needed, i.e. PPE, was great, and the market for medical supplies was insecure, both in regard of correct medical standard and in terms of transportation possibilities. Several countries therefore established a national coordinated operation that could secure sufficient amounts of medical supplies.

Denmark

The Maersk Bridge

Secured and purchased medical supplies to the healthcare system on behalf of the municipalities and regions


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International

Establishment of strategic coordination groups between nations in order to ensure effective distributions between several nations facing different issues of supply shortage

The covid pandemic has resulted in a great focus on local and national solutions regarding the securement of medical supplies. However international cooperation has shown also to be important. An international system can be a powerful way to secure effectiveness and a robust supply chain, as more nations go to the market together instead of betting against each other and create a competitive market with the cost of human life as a consequence.

 

European Union

European Commissions

Launched a joint procurement of personal protective equipment with engagement from 25 member states.

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Lessons Learned

It is highly likely that the future will include other types of pandemics, epidemics or other disruptions affecting supply chains related to healthcare. In these cases, learnings from covid pandemic must create the ability to adjust the flow and amount of supplies in a timely and safe way and create systems more robust and resilient to global distributions. The covid pandemic has resulted in a global evaluation and consideration of how supply chains can be disrupted, and whether it could be relevant to consider shifting from a ‘just-in-time’ to a ‘just-in-case’ strategy, especially in relation to lifesaving equipment and material[4].

The ‘just-in-case’ philosophy distinguishes it-self by focusing on minimizing the probability that a medical supply will run out, by always having stock on hand. It creates a safety for unpredictable times, since it is impossible to predict or plan for every possible risk and disruption[5].

Based on case studies and literature on the topic, a few key findings prevail, that could support the creation of more effective and resilient supply chains going forward. These consists of, but are not limited, to the following learning:

Reserve banks
  • The pandemic has shown the importance of having local supplies of critical medical amenities, in order to secure the national health and security.
  • Therefore, it might also be relevant to create reserve banks of necessary supplies on all levels, both local, regional and state level.
  • This will mitigate the impact on the supply chain in a time of disruption, because it will secure stocks of critical medical supplies within reach for all areas of the healthcare system.
Cross national coordination
  • The pandemic has shown the importance of having a flexible and well-coordinated supply chain, that allows for rapid response and deployment of medical supplies to where it is needed. For this to happen its relevant to focus on a cross national coordination supply chain, with engagement of both municipalities, regional and state government.
  • The supply chain should both consist of sharing of information on how well each entity are prepared, but also information on stock of medical supplies. This create transparency and knowledge between entities, which will add to a coordinated buying of medical supplies and add to the effectiveness and resilience of the supply chain.
Decentralized setup
  • The covid pandemic has shown supply chains often are highly demanding on international supplies. When entire countries and regions are closed, it has extensive effects on several supply chains.
  • In this case it would be valuable to have a decentralize setup to avoid any drastic impact caused by regional lockdowns in the supply chain. Therefore, its relevant to enabling new ways of producing necessary supplies on a geographically closer level, that do not demand functioning of global transportation.
  • The supplies should not only be on a geographically closer level, they should also be in country and regionally diverse locations.
  • Having several local productions possibilities will enhance the supply chains strength and resilience in a global crisis, because of a lower dependency on global transportation and a higher flexibility within production.
Country manufacturing facility
  • Even though many countries have a production of medical supplies, outbreaks like the covid pandemic have shown that with there is a high demand for medical supplies then can be manufactured locally.
  • To secure critical medical supply in a time of disruption, it might be wise to have a country funded manufacturing facility that is required to support the reserves of critical medical supplies.
  • This would secure a fast transition due to an already planned scenario when there is a disruption of the supply chain.

References

[1] Sustainability 2020, Zhu, G. Lessons learned from the COVID-19 pandemic exposing the shortcomings of current supply chain operations: a long-term perspective offering.

[2] The Wall Street Journal 2020, Sheffi, Yossi, MIT Center for Transportation and Logistics. Commentary: Solving the Health-Care Equipment Supply Shortage.

[3] HFM Magazine 2020, Hut, N. Reimaging the healthcare supply chain to bolster resilience and efficiency.

[4] Computer weekly 2020, Mckenna, Brian, Covid shifts supply chain management to resilience      

[5] HFM Magazine 2020, Hut, N. Reimaging the healthcare supply chain to bolster resilience and efficiency.