Distributing the COVID-19 vaccine is the single largest supply chain challenge the US has ever faced. Two doses per vaccination and 220 – 250 million people vaccinated to achieve herd immunity means we will need five times the capacity of the flu vaccine supply chain as a minimum. Early chaos in the rollout shows the need for a centralized coordinated team that pulls together all the supply chain components, plans, orchestrates and controls the distribution that is then locally executed. Our Supply Chain expert, Sylvie Thompson explains how understanding the complexity of the last mile, developing a Starbucks – one on every corner – distribution approach, and deploying a simple scheduling app are essential to success.
Over the past few days and weeks, vaccine distribution challenges have been national news. Roughly only one-third of the available vaccines have been successfully delivered into arms due in large part to supply chain challenges. This means, unless significant changes occur immediately, most of us will not be vaccinated this year.
Why have there been so many challenges and what can be done about it?
Gaps in the flu supply chain
First and foremost, using the flu vaccine supply chain was only an option if the distribution of the flu vaccine stopped. Secondly, that supply chain still was only a fraction of the required capacity.
Early discussions seemed to indicate we could simply leverage the same supply chain used for the seasonal flu vaccine. However, federal, state and healthcare companies failed to understand the one absolute truth within supply chains - the concept of capacity constraints.
This combined with the lack of understanding around what capacity existed, whether it was available and where it was available - made the situation far more complicated.
Roughly 70 -100 million flu vaccines are administrated annually over a six-month-plus period in a single dose. However, all the currently approved COVID-19 vaccines require two doses to be effective. Using basic math, we can easily determine that the COVID-19 capacity within the flu vaccine supply chain was only 35-50 million people if the entire capacity was freed up.
Essentially, all flu vaccine distribution would have to stop to make 100 percent of that capacity available for COVID-19 vaccines. If the flu vaccine continued - which it has and should - then only surplus or unused capacity to deliver the COVID-19 vaccine is available.
To obtain herd immunity, 220-250 million people need to be vaccinated, which means delivering 440-500 million total doses to arms. At this rate, we need five times the capacity of the flu vaccine supply chain.
Neither the healthcare industry nor any state government possess the capacity needed to achieve this task. We must pull capacity from other industries and design rapid creative supply chain solutions.
The need for a clear goal
Supply chains, like any complex system, need a defined goal or target. The entire chain is designed around achieving those goals. The following is a simplistic example, if my goal is to deliver every customer order within 48 hours regardless of their location my supply chain design is different than if my goal is to deliver customer orders at the least possible cost. Up to now, our goal for vaccine distribution seems to be missing, unless the goal was to push it out to the states as fast as possible no matter what…and let them figure it out.
Never underestimate the complexity of the last mile
The standard concept of last mile in direct to consumer is delivery to the doorstep. For the COVID-19 vaccine, last mile is delivery into the arm of a person not once but twice with the same manufacturer’s vaccine. Anything less is failure.
The previous Administration was responsible for transporting the vaccine from the manufacturer to a set of centralized distribution centers, creating a national stockpile, and to a set of regional distribution centers run by states. While this portion of the supply chain is routine, even with the complexity of cold storage, it is something various companies and third-party logistics providers undertake daily.
The most complex, challenging, and critical links in the chain are left to the states, which have less experience and even fewer resources to manage and execute. We have all witnessed the frustrations.
Unfortunately, few states understood the challenge that was before them. Those of us within supply chain understand that last mile is a consistent and endless struggle. Many of the nation’s largest transportation and logistics providers choose not to serve this segment of the supply chain due to its complex challenges.
It will take a dedicated task force of these amazing people to correct the vaccine distribution path. However, it cannot be a local by local, state by state response. We need a centralized coordinated team that pulls together all the supply chain components, plans, orchestrates and controls the distribution that is then locally executed.
Starbucks location strategy perspective
To be effective, we need a “Starbucks” rather than a “stadium” approach. Mega vaccination sites are not the best option. They create mega-lines, mega-confusion, and mega-spreader events along with a whole list of supply chain issues. Supply chains need predictable supply, demand, and capacity to work effectively. Further, the risk of damage, waste, loss, and theft of vaccines all increases via mega-sites. These sites also offer little to no opportunity to ensure second dose delivery and no ability to contact trace in the event of an infection.
We need vaccination locations on every other corner in order to set-up defined number of appointments, establish daily delivery routes, track vaccines by dose by manufacturer and ensure follow-up procedures for second doses are completed including receiving the second dose from the same manufacturer. Smaller more numerous locations also provide a simple forecast of capacity and vaccine demand that is much needed. Forecasts are the seeds of intelligence that power all supply chains.
Every other corner does not need to be a fixed physical site. There are numerous existing options that can be leveraged such as partnering with Meals on Wheels, a group that delivers millions of meals across the nation on a regular basis, instead of asking the most at-risk people to leave their home - go to them.
COVID-19 APP to the forecast rescue
Technology is revolutionizing our world today, particularly within the supply chain. We can buy just about anything via an app. We can select a two-hour pick-up window or request home delivery sometimes in as little as an hour. We can often track my delivery as it makes its way to our doors from the convenience of our phones.
Why is there no national COVID-19 vaccination app? Is it too far out there to think that just like how we order Starbucks, we could schedule a vaccine appointment?
There are cloud platforms, such as AWS and Microsoft Azure, that power such apps and organizations that can build and deploy rapidly. This would not only make the process easier for everyone but also provide consolidated demand forecast and insights by state and location. It would also enable static consistent transportation routes and last mile delivery routes.
Intelligent supply chain technology is the only way to know whether we have enough vaccines available to meet both first dose and matching second dose demand, whether we need to shift inventory from one manufacturer to another and where that specific manufacturer’s inventory needs to go. As vaccines from additional manufacturers become available this problem only gets more complex not easier. All parts of the supply chain must work together. Otherwise, it is the wild, wild west out there, and we don’t have time to wait for it to be tamed.
Post Date: 2021-01-22