The COVID-19 pandemic fully exposed structural flaws in global healthcare systems. Factory lockdowns, trade restrictions and transportation disruptions all over the world led to shortages of essential healthcare products, increased illnesses and deaths. This has motivated stakeholders in the healthcare industry to reevaluate global healthcare supply chains in order to make them more resilient to future health threats.
What Exactly Does a Resilient Supply Chain Entail?
A resilient supply chain is one that can successfully confront unpredictable social, political and economic events. In the healthcare system, resilience is the state of preventing or minimizing any disruptions caused by major health threats such as future global pandemics.
In any organization or system, the decision to build efficient and resilient supply chains is largely influenced by catalysts such as the country’s political and economic pressures and the flexibility of operational systems which helps in determining how well it can adjust to change such as supplier replacement and relocation.
Steps towards Building Resilience
The first step towards building resilience is understanding the current and potential risks in the healthcare supply chain. The likelihood of disruption on all elements of the global supply chain especially manufacturers, suppliers, buyers and consumers should also be well understood and taken into consideration when policies and strategies are being developed.
Evaluation: Assess the country’s manufacturing resilience by calculating the percentage of production capacity concentrated in certain countries, identify what is outsourced and whether there is any backup plan locally and on other locations in case of any restrictions.
Solutions: Contact backup manufacturers, localize manufacturing, invest in existing factories to boost production and adopt technological solutions to reduce labor costs.
Evaluation: Measure the resilience of the supply ecosystem by calculating the percentage of suppliers from certain countries, assess regional sources of supplies, the extent to which goods are imported, inventory levels and the availability of backup suppliers for essential healthcare products.
Solutions: Qualify new suppliers for more diversification to avoid the negative impact of single sourcing, procure from suppliers in different geographic locations, discuss with suppliers the option of moving to different geographic areas and optimize inventory of raw materials.
Evaluation: Assess the distribution channel leading to consumers, evaluate the fluctuation of revenue especially when there are tariff hikes, check whether the distribution network is monopolized and inspect inventory levels in the market and the average time it takes for supplies to move from the manufacturing plant to consumer.
Solutions: Expand distribution channels by adding new partners, shift distribution closer to markets, rethink modes of transport, evaluate distribution strategy by determining what needs to be outsourced or insourced and optimize inventory of finished goods.
How Countries are Building Resilient Healthcare Supply Chains
Regional manufacturing and sourcing has become a go-to strategy after many countries experienced shortage of essential products due to trade restrictions from major exporters. Germany for instance, is planning on the localization of production of medicines. The United States of America government in intends to invest $138 million to produce cost-effective, pre-filled plastic syringes for injecting possible COVID-19 vaccines. This is in partnership with ApiJect Systems, a company developing vaccines and medical supplies.
Can Africa Catch Up with the World?
Promoting domestic industry in the wake of COVID-19 requires a lot of supply chain changes especially in the biopharmaceutical and medical equipment sector. Knowing the economic state of most African countries, it may take a while to build resilient supply chains unless national governments are intentional about it and are committed to achieving health security and Universal Health Coverage.
Succeeding in the post-pandemic life requires a healthcare supply chain that not only focuses on surviving the present but being able to fight future threats and winning. Global pandemics are unpredictable and building resilient healthcare supply chains is the only way to survive while managing existing disease burdens.
At xetova, we use machine learning models to help organizations tap into the power of AI through our digital platform that provides solutions to facilitate efficiency, collaboration inclusion and investment in Africa. The aim is to build resilience in the supply chain ecosystem.
In light of COVID-19, we developed an AI driven platform with powerful tools important in the journey towards building health security and achieving UHC. Through our AHSA initiative, healthcare stakeholders can mobilize resources through collaborating with governments, donor agencies and financiers.