Supply Chain Software Gives Medical Industry A Boost
Written by Shukti Sarma
The importance of a robust supply chain cannot be exaggerated, especially in a field like healthcare. It will not be amiss to say that the supply chain is the backbone of the industry, and hence, it is important to maintain that in ship shape.
Modern technology has come a long way. Software today is a crucial component in proper management of all business and systems, and healthcare supply chain is no exception.
Software Accounting: Cutting Losses
One of the major concerns in this field is the rising cost of treatment and running businesses. But what many people fail to realize is that apart from labour, the healthcare supply chain accounts for the biggest expenditure for a hospital or caregiver institution.
Good software can help maintain a firm grip on a company’s management of resources and its supply change. Bruce Johnson, CEO of GHX- a leading healthcare supply chain management software/services company – recently stated that about “$5 billion is lost annually in the implantable device supply chain as a result of waste, inefficiency and lack of visibility”. A good software solution can help a business streamline and automate the supply chain and help cut costs, which may add up to a significant amount.
The GHX NuViasolution, for example, claims that hospitals can achieve significant savings from reduced errors, lower costs from better contract alignment and improved revenues through the use of more accurate, up-to-date data in the materials system.
Efficient management of the supply chain is much more than keeping tabs on the prices of medical supplies. Software can enable better consolidation within the supply chain community too. A major component in management of supply chain is distribution, and inefficient distribution leads to wastage, leakage and even fraud. Many solutions provider are looking at innovative designs and strategies, which minimize such inefficiencies.
Some software solutions provider, like TECSYS healthcare solutions move away from the traditional distribution model to a self-distributionmodel where products are purchased directly from the manufacturer and received at the hospital centre where they are directly delivered to the patients.
There are other solutions providers too, like The Diver Solution, which enables users to track ordering and usage patterns, as well as historical trends, helping reduce unnecessary purchasing variation and drive down costs.
Regardless to say, better management and better integration also saves time and energy, which the hospitals and caregivers can dedicate towards providing care for the patients. Software makers like Infor, also stress that an efficient system eliminates the complexities of fragmented solutions, and moves data from department silos and make it accessible, in real time, across the enterprise.
Looking Into The Mirror
Most importantly, good supply chain management software can be immensely helpful for small, regional caregiving institutions. They are most affected by inefficiencies, and a good software solution can help create connectivity and linkages that enable supply chain partners to share data with one another. This not only builds up mutual trust and helps visibility, but also establishes a strong network, which is better equipped to handle transfers and cater to more patients.
With increasing costs and pressing demand for better performance, healthcare providers and institutions cannot afford to lag behind and let inefficiencies get the better of them. Managing the supply chain is a crucial matter, and hence, it is imperative that they have a good look at their IT solutions. The key is to identify one’s needs, and then choose the solution that addresses those needs. Most software solutions providers offer customized packages, which have produced visible results.
With rising healthcare costs, shortage of labour and other complexities, hospitals need to be up-to-date with their systems. Good software not only helps in better integration; it saves costs, reduces wastage, saves time, helps track medical supply and keeps other information up-to-date. They also free up caregivers from getting involved in fruitless and cumbersome chores, which lets them provide better service to their patients.
The challenges to vaccine distribution affecting everyone
While it is comforting to know that vaccines against COVID-19 are showing remarkable efficacy, the world still faces intractable challenges with vaccine distribution. Specifically, the sheer number of vaccines required and the complexity of global supply chains are sure to present problems we have neither experienced nor even imagined.
Current projections estimate that we could need 12-15 billion doses of vaccine, but the largest vaccine manufacturers produce less than half this volume in a year. To understand the scale of the problem, imagine stacking one billion pennies – you would have a stack that is 950 miles high. Now, think of that times ten. This is a massive problem that one nation can’t solve alone.
Even if we have a vaccine – can we make enough? Based on current projections, Pfizer expects to produce up to 1.3 billion doses this year. Moderna is working to expand its capacity to one billion units this year. Serum Institute of India, the world’s largest vaccine producer, is likely to produce 60% of the 3 billion doses committed by AstraZeneca, Johnson & Johnson and Sanofi. This leaves us about 7 billion doses short.
Expanding vaccine production for most regions in the world is complicated and time-consuming. Unlike many traditional manufacturing operations that can expand relatively quickly and with limited regulation, pharmaceutical production must meet current good manufacturing practice (CGMP) guidelines. So, not only does it take time to transition from R&D to commercial manufacturing, but it could also take an additional six months to achieve CGMP certification.
The problem becomes even more complex when considering the co-products required. Glass vials and syringes are just two of the most essential co-products needed to produce a vaccine. Last year, before COVID-19, global demand for glass vials was 12 billion. Even if it is safe to dispense ten doses per vial, there is certain to be significant pressure on world supply of the materials needed to package and distribute a vaccine.
It is imperative drug manufacturers and their raw material suppliers have clear visibility of production plans and raw material availability if there is any hope of optimizing scarce resources and maximising production yield.
It is widely known by now that temperature is a critical factor for the COVID-19 vaccine. Even the regions with the most developed logistics infrastructures and resources needed to support a cold-chain network are sure to struggle with distribution.
For the United States alone, State and local health agencies have determined distribution costs will exceed $8.4 billion, including $3 billion for workforce recruitment and training; $1.2 billion for cold-chain, $1 billion vaccination sites and $0.5 billion IT upgrades.
The complexity of the problem increases further when considering countries such as India that do not have cold-chain logistics networks that meet vaccine requirements. Despite India’s network of 28,000 cold-chain units, none are capable of transporting vaccines below -25°Celsius. While India’s Serum Institute has licensed to manufacture AstraZeneca’s vaccine, which can reportedly be stored in standard refrigerated environments, even a regular vaccine cold chain poses major challenges.
Furthermore, security will undoubtedly become a significant concern that global authorities must address with a coordinated solution. According to the Pharmaceutical Security Institute, theft and counterfeiting of pharmaceutical products rose nearly 70% over the past five years. As with any valuable and scarce product, counterfeits will emerge. Suppliers and producers are actively working on innovative approaches to limit black-market interference. Corning, for example, is equipping vials with black-light verification to curb counterfeiting.
Clearly, this is a global problem that will require an unprecedented level of collaboration and coordination.
Disconnected information systems
While it is unreasonable to expect every country around the world will suddenly adopt a standard technology that would provide immediate, accurate and available information for everyone, it is not unreasonable to think that we can align on a standard taxonomy that can serve as a Rosetta Stone for collaboration.
A shared view of the situation (inventory, raw materials, delivery, defects) will provide every nation with the necessary information to make life-saving decisions, such as resource pooling, stock allocations and population coverage.
By allowing one central authority, such as the World Health Organization, to organize and align global leaders to a single collaboration standard, such as GS1, and a standard sharing protocol, such as DSCSA, then every supply chain participant will have the ability to predict, plan and execute in a way that maximises global health.
Political influence and social equality
As if we don’t have enough stress and churn in today’s geopolitical environment, we must now include the challenge of “vaccine nationalism.” While this might not appear to be a supply chain problem, per se, it is a critical challenge that will hinge on supply chain capabilities.
In response to the critical supply issues the world experienced with SARS-CoV-2, the World Health Organization, Gavi, the Vaccine Alliance and the Coalition for Epidemic Preparedness Innovations (CEPI) formed Covax: a coalition dedicated to equitable distribution of 2 billion doses of approved vaccines to its 172 member countries. Covax is currently facilitating a purchasing pool and has made commitments to buy massive quantities of approved vaccines when they become available.
However, several political powerhouse countries, such as the United States and Russia, are not participating. Instead, they are striking bilateral deals with drug manufacturers – essentially, competing with the rest of the world to secure a national supply. Allocating scarce resources is never easy, but when availability could mean the difference between life and death, it becomes almost impossible.
Global production, distribution and social equality present dependent yet conflicting realities that will demand global supply chains provide complete transparency and an immutable chain of custody imperative to vaccine distribution.
The technology is available today – we just need to use it. We have the ability to track every batch, pallet, box, vile and dose along the supply chain. We have the ability to know with absolute certainty that the vaccine is approved, where and when it was manufactured, how it was handled and whether it was compromised at any point in the supply chain. Modern blockchain technologies should be applied so that every nation, institution, regulator, doctor and patient can have confidence in knowing that they are making an impact in eradicating COVID-19.