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Planning for Catastrophe: Developing Resilient Supply Chains
August 25, 2021
As a global community we have seen all too often that a failure to plan effectively for unpredictable events can result in catastrophic costs both monetarily and in human lives.
COVID-19, the most recent glaring example, has demonstrated clearly that our systems for product manufacturing, purchasing, distribution, and end use are critical to mounting a successful emergency response and maintaining health system resilience. On any given day, people in diverse global contexts face routine disruptions in access to essential goods and services critical to their survival. In times of crisis, essential supply chains and service provision channels can be easily overwhelmed or destroyed, leading to life threatening scenarios beyond the initial disaster itself. Efforts to prepare supply chains for emergencies requires that systems be built to not only overcome everyday barriers that routinely restrict or disrupt access, but to accommodate surge needs rapidly and adequately when the unexpected occurs.
Key Issues / Needs When a Disruption Occurs
In any health system, critical features include:
Clear regulatory requirements and processes.
Sufficient quantities of quality essential goods and services.
Institutions and systems prepared and able to respond to changing needs and circumstances.
Efficient allocation of available human, financial, and technical resources.
These functions are easily strained or face collapse when supply chains and related services are not sufficiently enabled for resilience. There are numerous drivers of this strain on health system functions; needs are diverse and hard to predict; and even some of the most well-resourced systems have known supply chain issues. In emergency logistics, balancing efficiency (i.e., cost dimensions) and effectiveness (i.e., achieving desired outcomes) poses additional challenges. Worldwide, most manufacturing firms have minimal capacity to rapidly surge production and manufacturing, leading to significant deficits when meeting large, unexpected demand for products needed during a public health emergency. Access to goods–as well as any export restrictions or nationalization efforts to manufacture, certify, or register key goods–are often critical barriers.
Strategies to Build Resilient Supply Chains
Given these known challenges, there are targeted ways in which health system stakeholders can help build and sustain resilient supply chains:
1. Institutionalize Preparedness Into Routine Supply Chains
After the 2011 Sendai earthquake in Japan, it took many manufacturers of essential medical equipment and commodities several weeks to understand the impact of the disaster because they weren’t in contact with upstream suppliers upon whom they relied. By the time manufacturers were able to make new relationships with suppliers of key manufacturing components or materiel, any available surge capacity was gone. This is a cautionary tale, reinforced by experience with the COVID-19 pandemic, that once a supply chain disruption has occurred it is usually far too late to develop contingency plans or to develop new relationships with suppliers and manufacturers further upstream in the value chain. Establishing stockpiles of essential goods, preparing services and emergency personnel for events that may never come, and ensuring supply chains can cope with both everyday and uncertain shocks, requires advanced planning - and comes with a price.
At the national level, separate bodies (i.e., emergency response units or ERUs) are needed with clear mandates for emergency preparedness and response, and with adequate budget control and redundancy built into their strategies. Such units are likely to be more effective in building resilience than a central medical stores (CMS) department responsible for a plethora of other health system responsibilities. ERUs or other dedicated bodies would be able to focus attention on preparedness and ways to utilize the existing CMS warehousing and distribution functions in times of emergency. This could include stockpiling essential goods (and establishing and managing a budget to do so) and preparing key paperwork in advance for duty and tax exemptions for customs and importation of essential commodities.
2. Involve All Market Players From All Sectors
Resilient national supply chains are those through which the public sector can work effectively with the multitude of non-state manufacturers, companies, wholesalers, and logistics actors required for strategic and tactical preparedness and operational collaboration, during both times of calm and during a crisis. FEMA, WHO, USAID, and other organizations have underscored the importance of joint public and private preparedness planning. Pre-established contracts and MOUs with international and in-country transportation suppliers; rapid response communication plans in place with telecom providers; and links to community-based associations involved in frontline response are examples of how countries have sought this alignment. During the 2009 H1N1 influenza pandemic and the 2014 Ebola virus epidemic, the lack of public sector stockpiles and surge supply chain capacities meant the private commercial supply chain of pharmaceutical and healthcare products quickly became critical response components.
3. Focus on the People Involved in Supply Chains
A successful public health emergency response hinges on the ability to protect healthcare workers, first responders, and people involved in the provision of essential goods and services related to health outcomes. These people generally have a high risk of exposure and need to be assured of occupational safety. By focusing on the people that deliver essential services routinely and in emergency response (rather than the service itself) supply chain implementers can help create responses where service continuity is not threatened by the literal collapse of the person delivering the service.
Innovating Toward Supply Chains of the Future
Building resilient supply chains requires a holistic view and a thoughtful blend of strategies like the ones highlighted above, as one or two strategies implemented in isolation will have limited impact. As we look to the future, the following principles can help guide the development of resilient supply chains:
Prepared supply chains would:
Understand the supply and demand characteristics of the most critical goods, discuss emergency provision with key partners (including WFP and major relief agencies), and create provisional plans.
Conduct risk analysis and develop detection strategies that can help set priorities and respond depending on severity of the hazard, and develop strong contingency plans.
Seek to develop regional and national stockpiles, where appropriate.
Integrated multi-sectoral supply chains would:
Acknowledge that multi-sectoral planning for all-hazards/possible shocks is a priority worth investing in.
Encourage pooled resourcing of stockpiles, including governments, private sector, and communities themselves contributing to contingency goods.
Extend risk assessments and security analysis in areas facing civil unrest.
People-focused supply chains would:
Clearly define and protect essential workers as a key priority.
Provide technical training at regular intervals, in partnership with, and to complement, contingency planning and disaster management activities.
Develop strong strategic, planning, and management capability in supply chain leaders as an enabler for all the above.
A recent report issued by the Independent Panel for Pandemic Preparedness and Response highlights that in nearly all recent pandemic emergencies, coordinated global leadership has been absent. In particular, dedicated financing and systems to provide medical equipment, diagnostics, therapeutics, and vaccines has been (in many contexts) too little too late. Building resiliency thinking into our supply chains at the global, national, and community levels will require resources and effort, but investing now for the long-term will help ensure we have the goods and materials needed to respond to health emergencies