Analyst Insight: The supply chain landscape in the world of humanitarian healthcare is as complex as large global commercial supply chain networks, with several key nuances. Working with healthcare donors and non-government organizations (NGOs) provides insight into this critical, yet underfunded supply chain environment. Here’s a glimpse into this landscape, the challenges, the trends and approaches that are improving supply chain performance, mitigating risks and saving lives.
The Humanitarian Healthcare Supply Chain Landscape
With geopolitical tensions like trade wars and other conflicts giving rise to additional defense spending and increasing country debt, funds needed to meet the underserved populations around the globe are dwindling. Money is tight for humanitarian operations, and every dollar equivalent must be spent as efficiently and effectively as possible.
The Landscape — Think of the humanitarian healthcare supply chain as a large box with rows and columns. The columns represent three sectors: the private sector, or those who produce the medicines; the public sector, or the countries who administer the meds and the funds; and the NGO sector, as the companies who receive, store and distribute medicine in contested and remote areas. The rows include international manufacturers, national agencies/importers, regional/in-country distributors, district sub-warehousers, private prescribers, local pharmacies, rural communities and second tier pharmacies, and finally, the patient.
The Challenges —Diffused accountability, uncertainties of financing, unnecessary levels of complexity, long resupply intervals, lack of supply/demand planning data, mismatches between systems design and skills, and a lack of incentives for supply chain staff.
The Trends — Post-pandemic supply chains will not be the same. These chains won’t immediately transition into new ways of operating. It will take some time to re-balance supply/demand into a new normal, where visibility, resilience, risk management and supply diversity with tradeoff analysis will rule the day. New forms of transportation and delivery such as drones, along with new policies, will emerge. And finally, supply chain innovation and collaboration along the entire supply chain will be a critical success factor.
Commercial Supply Chain Best Practices Emerging — Through NGO engagements, close collaboration with health care partners and recent studies, we have witnessed many commercial supply chain best practices taking hold in this landscape. First and foremost, education and awareness have been embraced. This includes online courseware with certifications, and virtual and F2F workshops. Second, organizations are assessing their supply chain process maturity. Knowing your strengths and weaknesses is the next step. Third, organizations are beginning to map their supply chains from patients through suppliers/manufacturers. NGOs are also analyzing their direct and indirect spend to get a handle on the what, who, where and how much. The journey continues with many beginning to digitize their supply chains to run what-if scenarios to witness how their supply chains will react to risk events, and identify bottlenecks and improve the throughput of medicine deliveries to patients. And finally, a few organizations are delving into understanding their risk appetite and operating culture.
Outlook: The pandemic and major changes in the geopolitical landscape have brought supply chain management best practices to the forefront in humanitarian supply chains. NGOs are operating under stress because performance assessments by donors and the media are more widely available. Look for NGOs to embrace these best practices to improve supply chain performance, mitigate risks and deliver much needed medicines. The commercial supply chain holds the pieces of the puzzle to save lives.
Resource Link: www.thescrmconsortium.com
