Higher Quality at Lower Prices -- An Agreement for Generic Medicines that Must be Passed

Many of the greatest successes of the field of Operations Research have resulted in policy implementations and the alteration of the status quo, sometimes even through regulations supported by quantifiably convincing mathematical models and data.

In terms of healthcare, the leading work of our colleague, Professor Ed Kaplan at the Yale School of Management, in needle exchange programs to reduce AIDS, immediately comes to mind.

When it comes to healthcare, some of the major issues that we are faced with in our country today are twofold: high costs and (low) quality, with an associated component being questionable availability whether of healthcare providers or even medicines or service, in general.

Healthcare is so important that the only way in which we may be able to guarantee change is through legislation. During times such as these, when our medical nuclear supply chains have exhibited shortages of critical diagnostic radioisotopes, and when cancer drugs cannot be obtained by patients who need them for their survival, we are clearly in a medical crisis.

We wrote the OpEd piece: Viewpoint: Passage of American Medical Isotope Production Act of 2011 will help ensure U.S. nuclear medicine supply chain, and today's editorial in The New York Times: A Deal to Get Cheaper and Safer Drugs argues that lawmakers must quickly approve legislation that would ensure fees from generic drug manufacturers that would enable regular inspections of out of country manufacturing plants to ensure safety, and let's not forget about availability, as I have written about passionately on this blog.

The understanding of our complex global healthcare supply chains, and associated policy making, must be based on rigorous mathematical modeling and analysis that capture the network economics aspects as well as multicriteria decision-making to ensure quality but at reasonable cost. Operations researchers, with their multidisciplinary training, as well as mindsets, and collaborative networks, are leading the way.

It is imperative, however, that we, as researchers, educators and members of professional societies, get the news out about research that can make a difference.

Some of our relevant research on multitiered, multicriteria supply chain networks:

Supply Chain Outsourcing Under Exchange Rate Risk and Competition
Zugang Liu and Anna Nagurney, Omega 39: (2011) pp 539-549.

Global Supply Chain Network Dynamics with Multicriteria Decision-Making Under Risk and Uncertainty
Anna Nagurney and Dmytro Matsypura, Transportation Research E 41: (2005) pp 585-612.

Multitiered Supply Chain Networks: Multicriteria Decision–Making under Uncertainty
June Dong, Ding Zhang, Hong Yan, and Anna Nagurney, Annals of Operations Research 135: (2005) pp 155-178.

Some of our research on healthcare supply chains, specifically:

Medical Nuclear Supply Chain Design: A Tractable Network Model and Computational Approach
Anna Nagurney and Ladimer S. Nagurney (2011)

Multiproduct Humanitarian Healthcare Supply Chains: A Network Modeling and Computational Framework
Anna Nagurney, Min Yu, and Qiang Qiang (2011)

Supply Chain Network Operations Management of a Blood Banking System with Cost and Risk Minimization
Anna Nagurney, Amir H. Masoumi, and Min Yu, Computational Management Science: (2011), in press

Supply Chain Network Design of a Sustainable Blood Banking System
Anna Nagurney and Amir H. Masoumi, in Sustainable Supply Chains: Models, Methods and Public Policy Implications, T. Boone, V. Jayaraman, and R. Ganeshan, Editors, Springer, London, England, 2011, in press.

Time-Sensitive Products, Cost, and Cargo Security

Freight as the Weakest Link in the Chain was the title of my blogpost the other day and I see that today's New York Times has an article: In Air Cargo Business, It's Speed vs. Screening, Creating a Wink Link in Security.

The article focuses on time-sensitive products, a topic that we have conducted a lot of research on from fashion supply chains (not a life or death application but clothing is a basic right) to blood supply chains (another fascinating topic of research that we are completing a study on).

The Times article has several quotes from Professor Yossi Sheffi, a colleague of mine in transportation and logistics at MIT, whose center I visited when I held an NSF Faculty Award for Women.

Sheffi says: “You cannot stop the flow of time-sensitive air freight,” and “It is simply not realistic.” Professor Sheffi is the author of the book, Urban Transportation Networks, which is one of the books that I recommend to my students in the Transportation & Logistics course that I am instructing with help from my two wonderful Teaching Assistants, Nathan Kollett and Min Yu, who are doctoral students in Management Science at the Isenberg School of Management. Sheffi is also the author of The Resilient Enterprise.

Freight is a critical link in our global supply chains that produce and distribute products around the world. Hence, their security and viability are essential to our connected enterprises.

The air cargo system is built into the way many companies do business. However, the way that cargo is packed also makes it difficult to inspect, from special packaging, such as shrink-wrapping, which may provide exemption from inspections.

We are in an era of Fragile Networks in which multicriteria decision-making needs to be the norm for decision-making coupled with the identification of vulnerabilities and potential synergies in business.

Mergers and Acquisitions, Energy and the Environment

The New York Times is reporting that the number of mergers and acquisitions of energy companies is growing and that energy companies are increasingly seeking to acquire new sources for energy exploration. Companies are focusing on buying small, growing companies or on acquiring companies that expand their reserves in a period in which it is hard for them to find new places to drill. Targeted companies include companies in Africa as well as those that control drilling fields in deep waters in the Gulf of Mexico.

A recent study of ours, Environmental and Cost Synergy on Supply Chain Network Integration in Mergers and Acquisitions, that I co-authored with Dr. Trisha Woolley, appears in the recent volume, Sustainable Energy and Transportation Systems, Proceedings of the 19th International Conference on Multiple Criteria Decision Making, Lecture Notes in Economics and Mathematical Systems, M. Ehrgott, B. Naujoks, T. Stewart, and J. Wallenius, Editors, Springer, Berlin, Germany (2010) pp 51-78. In this paper, we developed a multicriteria supply chain network model to assess the possible cost and environmental synergies associated with supply chain network integration as in mergers and acquisitions. This work has direct relevance to energy companies who are considering whether to acquire or merge with an existing energy company (or not).

We have also (with Woolley and Dr. Patrick Qiang) developed metrics to assess the synergy associated with the supply chain network integration of multiproduct firms in the case of mergers and acquisitions. That paper, entitled, Multiproduct Supply Chain Horizontal Network Integration: Models, Theory, and Computational Results, will appear in the journal International Transactions in Operational Research.