Supply Chain 2035: Preparing for the Next 20 Years

April 11th, 2016 | Viewpoint

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Over the last two decades, increased investments in health have yielded significant gains in health outcomes for tens of millions of people around the world. At the same time, economic growth has raised hundreds of millions out of extreme poverty and helped fuel a vast expansion in information technology that has revolutionized the way people communicate. Inspired by the 20th anniversary of the first World Development Report to focus on health, the Lancet Commission on Investing in Health released Global Health 2035: A world converging within a generation in 2013. This visionary report asserts that we can achieve significant health gains in low- and middle-income countries (LMICs) by 2035, thus achieving a grand convergence. These gains are predicated on three key assumptions:

  1. Continued economic growth in low- and middle-income countries will enable increased investment in health.
  2. Insurance will be a primary tool in achieving universal health coverage (UHC) in low- and middle-income countries.
  3. Non-communicable disease (NCD) will dominate disease burden.

But achieving the grand convergence and the Sustainable Development Goals for health depends on a profound evolution in the supply chains that deliver the medicines, vaccines, and other commodities required to maintain and improve health and well being. With large-scale investments in health programs, a widening portfolio and volume of products, and expansion of services to new populations, supply chains must be more flexible, efficient, and responsive. Here are just a few of the scenarios that will require new approaches to health supply chains in LMICs:

  • Universal health coverage insurance schemes and continued economic growth will foster a more robust marketplace, encouraging the private sector retail pharmacy market to expand. But insurance schemes must be designed to assure quality products in a healthier marketplace, and to promote equitable access to products and services for people—especially in rural areas—whom the private sector do not serve. The full cost of supply chains must be factored into insurance payment mechanisms.
  • As more countries achieve middle-income status, donor funding will phase out, creating risks as graduating countries take full stewardship of their health systems including the cost of ensuring access to health commodities. Supply chain stewards must focus on maintaining and extending equitable access while managing risks of disruptions at every level of the supply chain. A total market approach that embraces multiplicity and redundancy in the supply system is essential.
  • Continued advances in technology and information systems will enable greater end-to-end supply chain data visibility. Supply chain data will be integrated with patient records and financial systems, automating resupply and payments, while biometrics will be used to validate client identities, improve adherence, and promote rational use. But greater visibility must be combined with the capacity of supply chain managers at every level of the health system to analyze data and take effective action, within an institutional culture that values data quality and use.
  • Storage and transportation systems will routinely leverage alternative energy technologies as well as autonomous vehicles for reaching remote locations. These technologies will require management systems and skilled personnel dedicated to keeping them running, maintaining and replacing equipment and vehicles as they near the end of their usable life, and staying abreast of technology upgrades and innovations.
  • Human resources for supply chain management will still be a challenge, as it is currently throughout the public and the commercial supply chain sectors, but outsourcing, vender-managed inventory, and direct delivery from venders will be commonplace and will mitigate the HR challenges. Supply chain stewards must embrace professional competencies and promote career paths and performance-based incentive mechanisms to recruit and retain supply chain talent today.

The grand convergence predicted for 2035 will require universal access to health supplies, and the range of skills and knowledge required to achieve that goal is more diverse than ever before. We require a command of health financing, insurance formularies, health informatics, risk management, business reengineering, market segmentation, pharmaceutical markets and regulation, and human resource management. Supply chain simulation technologies and costing applications are now essential tools in system design, optimization, and market segmentation. Career development and incentive mechanisms are as important as training curricula in preparing and retaining a capable supply chain workforce and leadership.

In order for public health supply chains to evolve, the people who support and work within them must also evolve. There will be many different models and many innovative approaches, and JSI will continue to help envision, design, and build supply chains for the future to meet Global Health demands in 2035.

Written by Chris Wright

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