The Covid-19 pandemic has shone a harsh light, exposing vulnerabilities in healthcare and pharmaceutical supply chains.
The struggle to move limited supplies as fast as possible to meet rampant demand for test kits, personal protection equipment and drugs has been exacerbated by structural weaknesses.
A survey of more than 100 health experts, conducted just prior to the outbreak in the US and published this month by US Pharmacopeia and the MIT Center for Collective Intelligence, warns that medical supply chains remain vulnerable.
“New health threats will emerge with significant impact on the delivery of healthcare throughout the world,” predicted Roy Guharoy, system vice president of pharmacy, Baptist Health System, and professor of medicine at University of Massachusetts Medical School.
“The current global supply chain is fragile and infested with problems, evidenced by frequent drug shortages. A solid infrastructure for the global supply chain is critical to ensure availability of medications to meet the needs of patients around the world.”
Single-sourcing has been highlighted as one of the critical weaknesses that can undermine and disrupt supply chains.
“Single-sourcing is one issue,” confirmed Patricia Cole, head of same-day and temperature management solutions at DHL Global Forwarding. She added that firms that had embraced the concept had been facing problems in the pandemic, currently most dramatically in India.
In early March, the Harvard Business Review pointed to the issue in an article stressing the need for more resilient supply chains. The authors noted that the risks of single sourcing were clear to supply chain managers, but often ignored to meet cost targets or secure steady supply under normal circumstances. Often firms had limited options, they added.
Geography is one constraining factor. Over 1,500 firms in the life sciences & healthcare sector have facilities in China. India has emerged as a hub for the pharma industry in recent years. By one estimate, 80% of active pharmaceutical ingredients used in the US are sourced from abroad, typically India and China.
Ms Cole reported that the flow of healthcare and PPE traffic out of China in recent weeks had encountered some bottlenecks; out of India there have been huge problems, with delays ranging from several days to a week.
“We’re mitigating the situation with our own charters,” she added.
At this point, she has not seen any signs of clients trying to diversify their supplier base. Healthcare supply chains tend to be slow to transform, given extensive vetting and testing of new suppliers and logistics providers. Moreover, most firms have their hands full dealing with the current operation.
“We’re still in a very difficult situation,” Ms Cole said. “Diversification of supply chains is going to be on the list.”
Another focal point is going to be increased use of big data and artificial intelligence (AI). Pharma producer Novo Nordisk has come up with a proprietary risk analysis solution that used big data from temperature loggers on its shipments to map temperature excursions. It subsequently linked those with data from its logistics providers to identify and tackle problem areas. According to Novo Nordisk, this has reduced cost and improved reliability.
“AI and big data will be a game-changer,” Ms Cole said, adding that probably the biggest challenge on that road is the diversity of providers and systems used by them, which have to be synchronised.
Last month, DHL and temperature-controlled ULD provider CSafe conducted a pilot airfreight shipment of pharmaceuticals from Puerto Rico to Kentucky, with subsequent surface transit to Chicago. CSafe had placed state-of-the-art tracking devices in the container, which allowed the forwarder to receive real-time data on location, container temperature, ambient conditions, container tilt, door opening/closing events and humidity readings. The data were fed to a cloud-based platform, to which CSafe support staff and customers have access around the clock.
The ULD provider intends to run more pilot trials soon “to further develop its visibility platform”, which it intends to be device-agnostic.
While such developments can enable users to respond faster to problems in transit as well as help identify weaknesses in supply chains, they cannot overcome the fundamental problems of sourcing strategies built around concepts like single-sourcing. Pharmaceutical and healthcare firms will have to re-evaluate their supply chains and embrace changes that may well raise their costs if they want to minimise disruptions in future.
This article was originally published on Healthcare & pharma supply chains are ‘fragile and infested with problems’