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Drive Innovation July 07, 2016

Field Report: What the Supply Chain in Big Business Means for Vaccine Distribution

Community Manager, MPH@GW
Key Takeaway
Private sector supply chain strategies can improve #publichealth #vaccine delivery - @jPotterRay MPH@GW

Here contributor Julie Potyraj, a former Peace Corps volunteer and the MPH@GW Community Manager, explores what lessons public health can learn from big businesses in terms of supply chain efficiency, especially when it comes to vaccine distribution:

Vaccine Distribution in Recent Years

The Immunization Supply Chain and Logistics (ISCL) systems that were designed in the 1980s improved vaccine coverage throughout the world. However, challenges in vaccine storage, distribution, and management are ongoing, and the introduction of new vaccines and higher coverage targets has experts worried about what such demands will mean for an already fragile supply chain system.

While immunization programs are becoming more complex, there are new and innovative supply chain strategies and technologies being developed—especially in the private sector. Such strategies can serve as a benefit for the public sector, national immunization programs, and the global community—who can make the most of what their commercial counterparts have to offer. Coca-Cola is one such company that has moved onto the global vaccine scene to help with both practical resources and supply chain expertise.

In a 2010 TED Talk, Melinda Gates asked how it could be that we can find bottles of Coca-Cola anywhere in the world, but not life-saving medicines? She began to study what lessons the company might provide for non-governmental organizations that would like to make life-saving medicines just as accessible. She discovered that Coca-Cola uses real-time data, taps into local entrepreneurial talent to support distribution and innovation, and makes the most of culturally relevant marketing and effective communication to make sure that a cold Coke is always within reach.

Using Real-Time Data

In a 2015 article for Harvard Business Review titled, “Inventory Management in the Age of Big Data,” Morris Cohen—the Panasonic Professor of Manufacturing and Logistics at the University of Pennsylvania’s Wharton School and co-founder of MCA Solutions—says that the availability of huge amounts of real-time data is creating a major shift in the way that the supply chain is managed. Going beyond the traditional model of using historical data, Cohen says that it’s “now possible to link data generated by all product interactions … and transactions generated by suppliers and competitors who connect via internet web sites and cloud portals … . In addition, any data that is coincident with these product interactions, that is derived from the firm’s external environment, can also be accessed and linked.”

There are a number of big data dynamics that Cohen cites that make the use of real-time data so valuable:

  • The use of advanced machine learning and optimization algorithms—which can “look for and exploit observed patterns, correlations, and relationships among data elements and supply chain decisions.”
  • The ability to replace the traditional two-step paradigm of “first forecast and then optimize”—with a single-step process that looks for “the best relationship among all of the data and the decisions” to create better outcomes.
  • The significant role of the internet of things (IoT)—in which smart, connected products can generate a wealth of real-time data regarding operating conditions and product performance.
  • The potential of prescriptive analytics—which is considered by many to be the “ultimate use of Big Data,” but is not yet being optimized to its full capabilities by big data users.

Tapping Into Local Entrepreneurial Talent

Coca-Cola isn’t the only big brand that taps into the local entrepreneurial scene. McDonald’s invests heavily in the local market by sourcing its raw materials there and partnering with local entrepreneurs as franchisees—in addition to using a bevy of culturally targeted marketing techniques. HSBC takes a similar approach and touts itself as “The World’s Local Bank,” while IBM ensures that a high percentage of sales are to national and local governments—especially when it comes to contextualizing “smart city” needs.

In addition to the benefits of gaining access to cultural expertise, the Overseas Development Institute says that such an approach is good for the local economy, as well. “Opening up opportunities for emerging entrepreneurs to access corporate supply chains is one of the most useful ways in which mainstream business can contribute to local development.” The ODI says this is common practice in the extractive sector—such as the oil and gas industries—but highlights a specific case in the Western Cape of South Africa where collaboration with a single hotel made a big difference to the local economy.

Using Culturally Relevant Marketing

Gates notes that although Coca-Cola’s global campaign slogan is “Open Happiness,” the company adjusts the theme to make it relevant to the local culture. Such needs are driving the quest for deeper and more targeted insights into consumers—which is why Microsoft is reportedly the second largest employer of anthropologists in the world, and companies like Google, Intel, and Adidas are hiring or training specialists to perform ethnographic research, a branch of anthropology that tries to understand how people live their lives. Instead of doing market research over the phone or online, ethnographic researchers visit consumers in their homes and offices to observe and listen in an attempt to better understand their needs.

Applying a Big-Business Approach to Vaccine Delivery

In terms of current implementation related to vaccine delivery, Coca-Cola is providing both practical equipment and transportation support—but even better, lending their expertise to teach NGOs and local communities how to build an intellectual infrastructure. One example is Project Last Mile—which was launched in 2010 and is a collaboration among The Coca-Cola Company, The Coca-Cola Africa Foundation, The Global Fund, USAID, and The Bill & Melinda Gates Foundation. This initiative applies Coca-Cola system’s logistics, supply chain, and marketing expertise to support health systems across Africa. Within this framework, government agencies learn about Coca-Cola’s business model, and are then able to apply this knowledge to enhance the delivery of vaccines, other medicines, and medical supplies; market the availability of these supplies to enhance demand; and maintain coolers to ensure the medicines and vaccines are stored safely.

The results have been successful. Prior to Project Last Mile, Tanzania’s Medical Stores Department was distributing essential medicines directly to 150 warehouse drop-off points. With the help of Project Last Mile, those direct distributions shifted to more than 5,500 health facilities. In 2014 the partners committed to investing additional resources to reach 10 African countries by 2020.

With the ongoing innovations and advances in supply chain management available, effective collaborations like these can mean the difference between life and death to millions around the world who can benefit from such resources and expertise.

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