Ever since the first vaccine breakthrough was announced the supply chain geared up to deliver on an unseen before that scale. The response of the industry has been nothing but immaculate and millions of people are receiving jabs every day across the globe. According to Stephen Meyer, Research Director at Gartner, supply chain organisations have done their bit and continue to fulfil orders.
Despite the success of the Covid-19 vaccination program from creating the jab to administering it, many countries are lagging behind. This is the reason why the conversation with Stephen Meyer from Gartner begins with the question why some have excelled and others are way behind. The researcher believes countries like the UK and the USA are picking up the fruit of their early investments in the vaccination program and the support they offered early on to pharmaceutical companies.
‘The vaccination program is a many-to-many relationship. We have many vaccine manufacturers and then we also have many different countries that are trying to manage their own orders and supply,’ Meyer explains. This meant companies would be forced to make allocation decisions in an environment where demand outmatches supply by a significant amount. That does not point to a fundamental supply chain problem, as both manufacturers and logistics providers had successfully scaled up their operations prior to deliveries.
Issues were present at some production facilities but Meyer thinks that is part of the whole process and doesn’t signal a serious reason for concern. ‘Supply chains are characterised by tradeoffs and managing the whole process is about how you make those tradeoffs,’ Gartner’s researcher continues. Due to the need for speed, resiliency had to be put second, but in an emergency like this one, it was the right operational decision. Companies and governments had no time to build safety stock or lead time into the supply chain. ‘There was a positive tradeoff in not creating a resilient supply chain,’ Meyer confirms.
How about other parts of the supply chain, which are linked to the distribution of the vaccine? Meyer says that companies producing glass containers have 18 months delay for new orders. As vaccination across the globe ramps up there is a significant demand for glass phials and it could create problems down the line.
‘Surprisingly we have not heard about a concentrated effort for recycling phials,’ Meyer is concerned. Once delivered, phials are used fairly quickly and they do not need to be stored but it is unclear what happens to them once discarded.
Calming down the storm
It is still too early to say when demand and supply would even out. As the race to vaccinate the world’s population continues we can only talk about this when we see what the long term situation is going to be. If Covid-19 turns into something like the seasonal flu then supply chains can factor this and prepare accordingly. It is unlikely to see speed being reduced before as many people as possible are vaccinated around the world.
A positive news is that the wider supply chain has not really been impacted negatively by the drive to deliver as many vaccines as available. Logistics providers were reassuring and proved, even though challenging, the program was well in their capabilities. Capacity was not affected. It is expected that some other products might be deemphasised by pharmaceutical companies.
From the very beginning of the vaccination program it was clear that some countries will struggle with it. Developed states have more powers and abilities to administer a complex procedure but many developing nations need additional help. Meyer says that from a supply chain perspective it is encouraging to see that more and more vaccines with simpler transportation requirements are being approved. In addition, already approved vaccines have made it easier to transport. The extreme requirements for distribution in the beginning were part of the trade off between speed and more data about the way the product behaves during transportation.
All of this combined will have an impact on the way vaccines reach remote locations and nations with fewer capabilities. To add to that, Meyer says that it could be expected to use the existing networks of large logistics providers around the world. International bodies will also play a significant role in distributing vaccines to developing countries.
Overall, the supply chain had performed exceptionally well. One of the areas where Meyer thinks there might have been more preparation was government authorities who had little knowledge about logistics. The biggest positive is that manufacturers, whose vaccines were not approved, are readily offering their facilities in order to speed up production. All stakeholders have quickly learnt how to deal with the situation. ‘We see some amazing success stories. In the US the state of Massachusetts appointed the manager of the Boston marathon because they recognised they needed people with logistics knowledge,’ Meyer finishes. ✷