Public Health Supply Chain Resilience

This is the third post in a series examining the supply chain resilience reports released by the White House on Thursday, February 24.

The Department of Health and Human Services report released last week is in many ways an update on the July 2021 National Strategy for a Resilient Public Health Supply Chain. That strategy document sets out three goals:

Goal 1: Build a diverse, agile public health supply chain and sustain long-term U.S. manufacturing capability for future pandemics;

Goal 2: Transform the U.S. Government’s ability to monitor and manage the public health supply chain through stockpiles, visibility, and engagement; and,

Goal 3: Establish standards, systems, and governance to manage the supply chain and ensure fair, equitable, and effective allocation of scarce resources.

While the food supply chain is a high volume, high velocity network that in a crisis needs to adapt preexisting flows to new conditions, the public health supply chain is conceived as a system to urgently surge supplies that were not flowing strong or fast before the emergency. Thus conceived, the National Strategy and the “One Year Report” prompted by Executive Order 14017 do a good job of engaging the problem set.

For most commercial supply chain professionals, the need to allocate is a sure sign of failure. Supply chain thinking, plans, and execution work hard to avoid allocations. But in the public health context allocation priorities and processes are fundamental. Demand can suddenly surge multiples more than preexisting capacities and flows. There is a draft national framework for allocation of constrained public health resources currently being circulated. Given the potentially catastrophic and specifically unpredictable character of public health risks, anticipating the need for surge and allocation is pragmatic strategic realism.

The National Strategy and related policies and plans give particular attention to structural issues, “such as the lack of on- or near-shore manufacturing and sourcing for raw materials and finished medical products.” Last week’s report accurately notes, “improvements in domestic manufacturing must occur across the entire supply chain; the companies involved want to know there will be enough demand now and in the future to sustain these expansions.” The highly variable demand for personal protective equipment (PPE) and medical counter measures MCM), including testing and diagnostics, vaccines and other pharmaceuticals, and more, set up challenges that, in my judgment, are quite different from the priorities of most commercial supply chains.

Supply chains, worth the designation, organize around organic, broad based effectual demand. This is distinct from need. Effectual demand is the recurring pull of something the supplier finds motivating. This demand may be seasonal or contingent or otherwise variable, but it recurs with sufficient regularity, scope, and scale to justify incurring costs and undertaking other risks involved in creating and managing capacity to push when a pull signal is received.

Early in the pandemic the federal government facilitated the development of voluntary agreements under Section 708 of the Defense Production Act (more) to address the manufacture and distribution of critical healthcare resources. This process continues to operate. The National Strategy anticipates “that the DPA 708 engagements will transition from the Federal Emergency Management Agency (FEMA) to HHS and be co-administered by ASPR and FDA. The Section 708 process provides a conduit to engage across the entire supply chain, enabling the U.S. Government and industry stakeholders who volunteer to participate to share information, build a common operating picture, perform analysis, and solve problem sets necessary to ensure a resilient domestic public health industrial base.”

The absence of effectual demand for sufficient flows of public health goods persists, but the DPA provides a potentially powerful public-private process for working through the risks of insufficient effectual demand.

There is another demand-oriented aspect of the public health supply chain that is not engaged by the One Year Report or National Strategy for a Resilient Public Health Supply Chain. I expect there are public health efforts underway to address the issue, but they are not categorized as “supply chain” efforts. In November 2020 the Kaiser Family Foundation reviewed state and territorial plans for vaccine distribution. This review found:

Less than half (19 of 47, or 40%) of state plans reviewed include a numerical estimate of the number of individuals in different priority populations; the majority of states report they are still developing their data sources and methodology to calculate the number in their priority groups. A majority of states (25 of 47, or 53%) have at least one mention of incorporating racial and/or ethnic minorities or health equity considerations in their targeting of priority populations. Some states expect to make racial and ethnic minorities an explicit priority population group, while others report using more general or indirect methods to do so, such as through use of the social vulnerability index (as was recommended by the NAM) and/or a Health Equity Team or Framework.

There was — still is — a fundamental absence of demand-oriented planning and targeting for public health. This absence has complicated both non-pharmaceutical interventions and medical counter measures across the entire pandemic period (more and more and more ). Vaccine hesitancy predated this pandemic. Pseudo-scientific beliefs and practices are long-established. Non-scientific and anti-scientific attitudes are not new. For prevention, mitigation, and response purposes, public health supply chains need 1) a much more robust understanding of current whole-population “demand patterns”, 2) identification of strategic opportunities to influence these demand patterns, and 3) public health investments, professional development, and intervention programs to shape and manage demand for the public health supply chain. In many ways the public health profession already engages in this work through disease surveillance, population-based health care, and more. These existing competencies should be recognized as fundamental to public health supply chain strategies, plans, and operations.

In the late-Twentieth Century Walmart gradually displaced Sears by revolutionizing how supplies are procured, managed, and delivered. In more recent years Amazon (and others) are attempting to displace Walmart (and others) by a focus on fulfilling demand (sometimes creating demand) as much as moving supplies. Walmart is fighting back hard (and, so far, effectively) with its own demand-oriented strategies. The public health supply chain documents reflect late-20th Century thinking.

Especially when supply volumes are constrained, supply velocity can ensure maximum benefit of volumes available. Supply velocity requires a substantive understanding of current and emerging demand. Much more attention to the interdependencies of demand and supply will enhance strategic preparedness for public health challenges known to be heading our way, but we can’t quite predict what or when or where.


March 7 Update: A report in today’s New York Times suggests how deciphering and delivering demand is fundamental to sustained and sufficient supply: Why American Mask Makers are Going Out of Business.