Building Resilience into the Nation's Medical Product Supply Chains (2022) / Chapter Skim
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8 Preparedness Measures for Resilient Medical Product Supply Chains
8 Preparedness Measures for Resilient Medical Product Supply Chains
Pages 197-220
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As described in the medical product supply chain resilience framework in Chapter 5, preparedness measures can be grouped into four subcategories, two physical and two virtual (Figure 8-1)
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Medical product supply chains need these interventions because, as discussed in Chapter 4, medical product supply chains are typically optimized for routine conditions, with regular lead times and predictable levels of variability in demand and supply. Producers of medical products achieve this by taking steps to ensure supply can regularly meet demand, and thereby protect their revenue streams.
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(Chapter 6) , evaluate various scenarios that could create medical product shortages and determine the number of medical products necessary to offset most shortages.
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In reality, problems with forecasting demand, monitoring stock levels, rotating stock to prevent expiration, and other practical details can prevent inventory stockpiles from providing the intended level of protection in an emergency. For example, a recent analysis of the SNS noted that the lack of transparency into medical product supply chains caused a lack of strategic forecasting leading up to the coronavirus disease (COVID-19)
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. For example, a hospital seeks to ensure that a given medical product is always in stock.
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is another useful tool to improve the management of medical product inventories. An example of CI is Amazon's use of drop shipping, in which online orders are filled from stocks owned and held by suppliers (Amazon, 2021)
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. A federal initiative called the Shelf Life Extension Program was developed in the 1980s to defer and reduce the replacement costs of federal stockpiles of critical medical products by extending useful shelf lives through periodic U.S.
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For example, if crisis standards call for N95 masks to be reused X times instead of once, then total demand will be 1/X the forecast of uses during the emergency. Finally, stakeholders need inventory data about what medical products are available and where.
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. For example, suppose advanced manufacturing makes the fill-and-finish stage of production for a given drug cost competitive in the United States, but active pharmaceutical ingredient BOX 8-2 3M's Use of Capacity Buffering 3M uses capacity buffering as a strategy to respond to demand increases for the medical products it produces.
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is enough to weather any of the above disruptions and that the annual holding cost rate (e.g., interest on money tied up in inventory, storage cost, cost of rotating inventory) is 15 percent.
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* This box references a report commissioned by the Committee on Security of America's Medical Product Supply Chain titled "Where There's a Will: Economic Considerations in Re forming America's Medical Supply Chain," by Phil Ellis (see Appendix D)
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A basic obstacle to the resilience of medical product supply chains is that profit motives of manufacturers and vendors motivate a smaller investment in protection than is optimal from a public health perspective. The gap between privately optimal and publicly optimal investment is most acute where margins are low but medical needs are high.
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about shifting units between regions because surges of intensive care unit patients occurred at different times in different regions. On a global scale, sharing materials and products across regions is an important element of buffering the capacity of global medical product supply chains.
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. This technology, if applied correctly, can help reduce the entrance of fraudulent and substandard medical products into the market and protect consumers.
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These steps include funding extramural research projects in various aspects of advanced manufacturing, issuing grants to academic institutions and nonprofits to study advanced manufacturing and recommend improvements, and establishing the Additive Manufacturing of Medical Products research facility to improve FDA's technical and regulatory infrastructure. FDA also established the Emerging Technology Program to facilitate industry's adoption of advanced manufacturing, allowing industry to work collaboratively with regulators in addressing potential technical and regulatory barriers (FDA, 2019)
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As such, they are essential for addressing rare events for which these costs cannot be justified. Contingency planning can address many factors that influence supply chain resilience, including inventory and capacity.
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In real-world settings, problems with forecasting demand, monitoring stock levels, rotating stock to prevent expiration, and other practical details can prevent inventory stockpiles from providing the intended level of protection in an emergency. Furthermore, as described above, capacity buffering can be a cost-effective alternative or supplement to inventory as protection against shortages.
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Both of these would make capacity buffering a more viable preparedness option and hence would facilitate a partial shift away from expensive inventory and toward cheaper capacity. As noted earlier, on-shoring is often promoted as a means for building medical supply chain resilience via the argument that the more medical products a country produces domestically, the more control it has of supplies during an emergency.
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should take steps to cultivate capacity buffering for supply chain critical medical products where such capacity is a cost-effective complement to stockpiling and as protection against long-lasting supply disruptions or demand surges. These steps include a.
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e. ASPR should be responsible for anticipating and assessing public health emergency demand surge for supply chain critical medical products.
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2016. Supply chain planning for random demand surges: Reactive capacity and safety stock.
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2019. Blockchain in additive manu facturing and its impact on supply chains.
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2020. Trump invokes Defense Production Act for ventilator equipment and N95 masks.
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