There is growing interest in the global health community, including the World Health Organization (WHO), about whether low-middle-income countries (LMIC) can use digital technologies to help improve their supply chains and procurement processes. In many of these disease prone regions, health supply chains tend to function inadequately, resulting in a high prevalence of substandard and sometimes even falsified medications. A recent WHO survey, revealed that 36 percent of surveyed antiretroviral therapy (ARV) clinics in 35 LMIC countries reported at least one ARV stock-out – a situation where an item is out of stock – in a 12-month reporting period. The problem is even worse in Africa.
These stock-outs can be deadly because they force patients to interrupt treatment (or prevent them from beginning treatment in the first place), raising the likelihood of illness and the antimicrobial resistance.
Tim Wood, Global Supply Chain Vice President at IBM, is helping health providers eliminate stocks-outs through the use of a cloud-based predictive supply chain platform that can forecast where obstacles might emerge. By offering precision visibility from end-to-end of the supply chain, IBM’s predictive analytics for supply and demand forecasting ensures that bed nets, HIV medication, and other health supplies from medical storage facilities in Washington DC arrive safely in remote parts of Africa.
Wood says, “Our goal is to help eradicate HIV across Africa,” and adds, “If the logistics are in place, we can do it.”
Today, the trailblazing trend in supply chain management is the notion of “track and trace” or traceability.
What is Track and Trace?
As the name suggests, track and trace initiatives allow actors on a supply chain to control where a product is at any given time (tracking) and where it came from (tracing). The tactic starts with the process of serialization: a manufacturer allocates a unique identifier to each product using a two-dimensional (2-D) barcode that other supply chain actors scan and record when it changes hands. The end result is a digital trail of information that records a package’s origin, path through the supply chain, and other properties. Track and trace is already common in many sectors in advanced economies. For example, the US Drug Supply Chain Security Act (DSCA) and the EU’s Falsified Medicines Directive requires producers and distributors to “track and trace” the movement of medicines through the supply chain.
Why it Matters
Here are two examples that demonstrate how traceability systems help manage health supply chains:
- Traceability can help vendors, government, and private-sector actors verify the origin of the products — valuable information in industries where counterfeiting or sourcing practices are common.
- It is quicker and easier to conduct recalls by tracing a product’s chain of custody back to its origin. This is especially important for contaminated goods. The case for using traceability in health supply chains rests on its ability to improve supply chain security. Product origin helps retailers verify that a product is exactly what its label claims. Additionally, the ability to track the movement of individual products through a chain of custody can make it easier to detect when a product is diverted away from its original destination.
Traceability could also improve the effectiveness of global health supply chain and procurement processes in LMICs in a number of ways, including:
- Streamlining recalls. The capacity to quickly identify the source manufacturer of a contaminated medicine helps to stop production and process recalls, reducing both costs and the risk of illness.
- Improving supply and demand forecasts for procurement. Traceability data provides greater visibility over supply and demand patterns for any given product and subsequently improves demand forecasting. Procurement agencies in LMICs could use this information to forecast their commodity needs, predict stockouts, and bolster their negotiating power.
- Managing inventory. Improved visibility helps actors on the supply chain better manage stocks within their own facilities by streamlining inventory and reducing waste. Greater visibility permits “just in time” delivery, allowing managers to lower the stock they hold in their warehouses.
Sustain the Momentum
Traceability holds great potential for improving and streamlining global health supply chains.
The global health community has worked to expand the use of traceability in LMIC health systems by encouraging the use of Global Standards 1 (GS1) by their suppliers and working with LMIC governments to establish the foundation required for adopting serialization. GS1 standards create a common foundation for business by uniquely identifying, accurately capturing and automatically sharing vital information about products, locations, assets and more. Businesses can also combine different GS1 standards to streamline business processes such as traceability.
In 2017, the Interagency Supply Chain Group (ISG) — which includes among its members, Bill & Melinda Gates Foundation, Department for International Development, The Global Fund, Gavi, World Bank, World Food Programme, World Health Organization, and several UN agencies — endorsed GS1 standards. The same year, U.S. Agency for International Development (USAID), notified its suppliers that they would have to identify and label products using GS1 standards by the end of 2018. USAID has also played a lead role in developing a master product list for global health commodities. Using the GS1’s Global Data Synchronization Network (GDSN), which allows manufacturers to share product master data in near-real-time, the project aims to provide a “single source of truth” for product attributes that is accessible to all supply chain actors.
Other organizations, including the Global Fund and the United Nations Population Fund (UNFPA) have already agreed to work off this list and USAID is encouraging its partner countries to use the list as the basis for their own product directories. South Africa announced in 2017 that it would require its vendors to use global data standards aligned with USAID’s requirements. Finally, USAID is also taking the lead working with governments to improve in-country supply chains. Through the (Global Health Supply Chain Programme-Procurement Supply Management (GHSC-PSM) project, the organization is currently working with Ethiopia, Ghana, Lesotho, Malawi, Pakistan, Uganda, and Tanzania.
Today, these donors can sustain the momentum by gathering evidence about what approaches work best and continuing to work with LMIC governments who are committed to improving supply chain integrity to translate that knowledge into action.
In cooperation with our clients, Washington Business Dynamics (WBD) is committed to the continuance of positive change in this arena. We strive to partner with those who envision a global health supply chain that is dynamic, efficient, equitable, and accessible for all.
Author: Sangeetha Shanmugham is a Communications professional engaged with the firm’s Private Sector Engagement award with the United States Agency for International Development (USAID)