Fixing the Broken Humanitarian Healthcare Supply Chains

Despite significant advances in supply chain management in terms of both methodology and application, healthcare supply chains, and, in particular, humanitarian healthcare supply chains, have not received the needed attention.

Humanitarian healthcare supply chains have many unique characteristics. For example, as pointed out in the handbook, Humanitarian Supply Management and Logistics in the Health Sector, by the Pan American Health Organization and World Health Organization (2001), “The various stages in the flow of supplies from their point of origin to the moment they reach their recipients – whether they be the organizations managing the emergency or the actual beneficiaries of the assistance – are a chain made up of very close links. How any one of these links is managed invariably affects the others. Supply management must therefore be the focus of an integral approach that looks at all the links in the sequence and never loses sight of their interdependence ...”

Hence, an appropriate framework for humanitarian healthcare supply chains must capture the entire relevant network.

Moreover, Van Wassenhove and Pedraza Martinez, writing in an article in a special issue of International Transactions in Operational Research, that I have blogged about, have argued that “The key for logistics restructuring is better network design” and noted that logistics restructuring is a supply chain management best practice that could be used in humanitarian logistics restructuring, singling out the restructuring of the International Federation of Red Cross and Red Crescent Societies (IFRC).

The news as to how to optimally design and redesign multiproduct humanitarian healthcare supply chains needs to get out more widely since, in 2011, more than 251 drug shortages were reported, including 20 chemotherapy agents, according to the American Society of Health-System Pharmacists. The drug shortage crisis has not only forced patients to switch to more expensive alternatives, but also posed potential hazards of medical errors. Although the causes of drug shortages are complicated, it has been noted that production disruption at one manufacturing facility can lead to widespread drug shortages.

In the paper, "Multiproduct Humanitarian Healthcare Supply Chains: A Network Modeling and Computational Framework," that I co-authored with my doctoral student, Min Yu of the Isenberg School of Management, and with Professor Patrick Qiang of Penn State Malvern, we developed a multiproduct supply chain network design and redesign model with applications to humanitarian healthcare applications. The variables in the model are supply chain network link capacities as well as the healthcare product flows associated with the supply chain activities of production, transportation/shipment, and storage/distribution.

When the capacities are sufficient to meet the demands and no enhancement of capacity is needed, the model collapses to a humanitarian healthcare operations optimization model.

The solution of the model yields the optimal investment capacities and product flows on the links at minimal total cost, with the demand for the various products being satisfied at the various demand points. With this information, a firm or organization involved in the production and distribution of healthcare products can identify the total cost associated with the provision of its products. The framework can handle both the design and the redesign problem with the latter being especially relevant for healthcare, since, for example, vaccine manufacturers may have to regear from year to year depending on the forecasted flu viruses; the same holds for the manufacture of associated medicines.

Given the paucity of multiproduct supply chain network mathematical models and associated methodologies in the literature that can handle both link capacities and product flows as decision variables, along with nonlinear cost functions to capture congestion, as well as risk, we believe that, with this paper, we have made a contribution of specific relevance to humanitarian healthcare supply chains.

We will be presenting the paper at the 2012 POMS Conference that will take place in Chicago, Illinois, April 20-23. The paper has been accepted for publication in the conference Proceedings.

Supply Chain Network Design for Critical Needs at NetSci2010

I will be at MIT for the NetSci2010 Conference over the next couple of days and will be presenting the paper, "Supply Chain Network Design for Critical Needs with Outsourcing." The paper has been accepted for publication in the journal, Papers in Regional Science. The presentation may be downloaded here. I will be going with one of my doctoral students, Min Yu, who is a co-author with me of the paper, along with Dr. Qiang "Patrick" Qiang.

The conference should be very interesting and the venue of the Media Lab should be perfect. I am looking forward to seeing many colleagues there.

H1N1 (swine flu) vaccine supply chains

The New York Times has had excellent coverage on the H1N1 (swine flu) vaccine production problems, which have resulted in shortages throughout the US with citizens clamoring for information and long lines at vaccination stations, where they can be located, assuming that any vaccine has been delivered. The article, Shortage of Vaccine Poses Political Test for Obama, emphasizes the political ramifications of the government's overoptimistic projections of vaccine availability. It also links to another article that documents the problems encountered, still ongoing, with the vaccine supply chain from the manufacturing through the distribution and delivery.The technologies of vaccine production have, for the most part, not changed over decades and require the growing of the vaccines in eggs. Yields may be quite uncertain and that was the case for the H1N1 vaccine. On top of this problem, there were insufficient dispensers available, where and when needed, for both the nasal mist variety and the inoculation one, which demonstrates not only poor planning but inadequacies in this critical needs supply chain. Vaccine producers are now an oligopoly and there are only a few firms involved in producing for the US population.

Both China and Australia have been giving their citizens the H1N1 vaccine for awhile now. It is very frustrating that in the US better emergency preparedness was not done for vaccine production and distribution. Citizens do not need the added anxiety in this economic climate.What pleases me is that some school districts have realized that closing schools may be in the best interest at this time to assist in the minimization of flu transmission and in the recovery of those who are sick. Indeed, President Obama has declared a national emergency because of the swine flu but some school districts are still reluctant to close the schools and some are not even informing parents as to the seriousness of the spread of the flu.


The US must invest in its vaccine supply chains and begin to regain its manufacturing strength and know-how. This is an issue of not only emergency preparedness, healthcare, but also one of national security.

The outstanding talk that Professor Jose Holquin-Veras gave last Friday in our Speaker Series on emergency logistics has now been made available and can be found, in pdf format, here. We thank him for trying to educate FEMA post-Katrina and we hope that others can learn before it is too late. We also extend our sincerest thanks for making his presentations slides available.

If I had the resources available I would make sure that all of the talks in our UMass Amherst INFORMS Speaker Series are videotaped and put online. Coincidentally, last May, I was invited to give a talk on global supply chains and vulnerabilities at the University of California Davis, just as the swine flu was breaking out last Spring. I decided to minimize the risk and my talk was videostreamed. It is now available online, thanks to the Institute for Transportation Studies there. It was certainly an interesting experience to give a talk to an audience thousands of miles away!

We have been conducting research on network design for such problems and have completed a study. The paper is now in the refereeing stage.