Many governments in Africa have not adequately invested in their healthcare supply chain as a critical area for development and innovation. Over the same period, the private sector identified the supply chain as a competitive differentiator and invested in it to improve its value proposition to customers and cost-conscious shareholders.
Then, the COVID-19 pandemic arrived. The challenges brought about by the pandemic accelerated governments’ understanding of just how important the supply chain is and why investment in it should be prioritised. This has provided a pertinent opportunity for ministries of health, donors, implementing partners, and private sector stakeholders to explore how best to move Africa’s health supply chain forward–and make it more resilient. But how do you build resilient supply chains, and how do you do so sustainably?
At the Africa Resource Centre, we believe three fundamental axes support sustainable supply chain resilience: private sector engagement, supply chain shortening, and governance (improved visibility and oversight).
Private sector engagement
Private sector partnerships are an important component of existing supply chain structures. Still, this role can be extended to include sufficient flexibility to allow for scaling up or down on demand when there are shifting or seasonal needs.
The private sector has many existing mechanisms that support resilience, and it has a proven ability to continue supplying goods and services, even when there is volatility. This is an essential tool that governments can leverage without carrying the operational and long-term cost burden of establishing such systems in-house.
Much of ARC’s work involves translating proven practices from the private sector into public health systems to support supply chain strengthening. For instance, at the start of the COVID-19 pandemic, ARC supported the Western Cape Government in South Africa to leverage Uber and other private sector taxi agencies to deliver medicines.
Ministries of health need to have suitable agreements in place with the private sector, including provisions for different demand levels. These agreements allow governments to respond to externally driven shifts, without sacrificing the essential checks and balances and quality controls for good supply chain governance.
Shortening supply chains
The COVID-19 pandemic highlighted the fragility of extended supply chains in the public and private sector. The private sector is now seeing a shift to more localised production in response, even though per-unit costs may increase. A shorter supply chain is generally recognised as leaner, more agile, and can be more accountable and cost-efficient depending on circumstances.
These benefits mean many governments are considering shortening their supply chains with localised production of vaccines, medicines and other health products. However, when every country has a knee jerk reaction to shortening supply chains, there is a risk of overreacting and oversupplying markets.
Systems need to be put in place to make the supply chain run well on a regular basis. Rather than directing resources into trying to predict unknown stresses in the future, investing in creating efficiencies in the existing supply chain through visibility, IT infrastructure and planning routines will prepare the system for all magnitude of required responses, while also having a more immediate impact on patients’ lives.
In ARC’s view, efficiently shortening supply chains involves regional manufacturing centres rather than localised in-country manufacturing. We see ARC and other regional bodies playing a role in brokering agreements between countries and optimising how regional manufacturing happens. Governments need to develop governance which allows flexibility when demand requires it to access regional manufacturing and supply entities most efficiently.
Effective governance can also increase the resilience of the healthcare supply chain because it brings partners and stakeholders together to regularly review and adjust strategic plans and operational performance. Then, when a significant event or crisis occurs, these measures are already in place and up to date so the supply chain can expand as needed to accommodate the acute demand.
Donors can also play a positive role in contributing to this aspect of supply chain resilience by giving their partners the flexibility to respond to shifting demands. For instance, in 2019, Cyclone Idai landed in Mozambique, leaving more than 600 people dead and triggering a devastating cholera outbreak. The government needed to mount a response, but critical data sources were stored in multiple siloed systems. However, the government and donors procured the services of Zenysis, a private sector software company. Zenysis was able to help Mozambique’s National Institute of Health integrate multiple data sources into a new virtual control room within 24 hours. This provided decision-makers with a timely and complete picture of the crisis and the actionable analytics for a timely, effective and coordinated response.
Similarly, this was achieved with great success in many areas during the COVID-19 pandemic. Donors’ willingness to allow their partners to make quick strategic shifts demonstrated the impact this can have on patients who need access to medicines and healthcare services.
Good governance needs to also cultivate the right mindset in the people responsible for managing the supply chain. Helping them to see the inherently dynamic nature of these systems and preparing them for the reality of volatility will allow them to respond quickly and with a greater sense of urgency when changes need to be made.
More than preparing for another pandemic
Current discussions about supply chain resilience are about more than just preparing for another pandemic or predicting future shocks. Suppose supply chains can be developed to be responsive and agile when there are everyday fluctuations, like regional disease outbreaks or natural disasters. In that case, they will also be in a strong position to demonstrate resilience when there are significant or widespread shocks.
Through effective structuring of private sector agreements, utilising regional manufacturing for supply chain shortening, and continuous and robust governance measures for regular volatility, supply chains will demonstrate resilience and shift according to fluctuating demands, including when there are large global health crises like the current pandemic.
About the authors
Trip Allport is the Managing Director of Strategic Alliances and Sustainability at ARC. For over a decade, he has helped shape and manage partnerships supporting market-oriented solutions to the world’s most challenging development issues between the private and development sectors.
Dr Bonnie Fundafunda, PhD. is the Regional Lead, supporting East and Southern African countries for ARC. He has over 30 years of experience in health policy, planning, strategy, operational systems and business development in Africa.
Edward Llewellyn is the Supply Chain Technical Director at ARC and has advised on organisational transformation across the private and public sectors for twenty years. Ed supports ARC’s country teams to shape and scope supply chain strengthening initiatives with government at the centre and with sustainability as their objective.