COVID-19 vaccines from various manufacturers are being approved by more countries, but that doesn’t mean that they will be available at your local pharmacy or mass vaccination centers anytime soon. Creating, scaling-up and manufacturing the vaccine is just the first step, now the world needs to coordinate an incredible and complex supply chain system to deliver more vaccines to more places than ever before. The challenge is particularly intense because the vaccine will not be distributed en masse to all individuals, but by segments that include occupation, age, preexisting risk, and geography.
Thankfully, technology to assist this huge undertaking is more comprehensive than ever before. With streaming data, analytics, machine learning, and the cloud, organizations can increase operational efficiency and better manage supply chain creation, as well as disruption. In many ways, the approach we are seeing to the COVID-19 supply chain represents a meeting of classical manufacturing with classical retail distribution to create something completely new, to tackle a challenge the world has never seen at this scale.
The Vaccine Supply Chain Challenges
The COVID-19 vaccine distribution is one of the most challenging manufacturing and supply chain issues facing the world right now. Headlines are being made daily about supply, demand, and distribution. But, while the media’s attention has begun to focus in recent months, many participants in the chain have been hard at work for months preparing for distribution, readying healthcare personnel, and coordinating with vaccination facilities for almost a year.
Consider the full scale of the scenario currently being unpacked by vaccine distributors: equipment from glass vials to packaging and dry ice has been stockpiled for months. Capacity on planes and with ground transportation has been booked, and, of course, this was all done in the absence of the vaccine itself. Now, all the components of the vaccine supply chain need to be coordinated with each other, as well as with global demand and distribution capabilities of localities.
The vaccines will be delivered with a dynamic manufacturing cadence depending on their destination’s readiness and storage abilities. Too much supply may overwhelm local distribution and leave temperature-sensitive deliveries suffering from “idle time” on the tarmac. Too little supply may squander resources, from under-filled doses to under-utilized cargo planes.
An additional challenge is that the vaccine roll-out has not been initially performed at a unified (Federal) level but at a regional and sometimes county-wide level. This contrasts with Exploratory, Pre-clinical, Clinical development, Regulatory review and approval, Manufacturing and Quality control phases as these are unified under the guidance of the FDA. At the time of writing, silos in the supply chain are limiting the ability to reach targeted segments of the population within the time frame of the intended roll-outs. This is, in turn, causing a mismatch between demand forecasting and supply replenishment.
The complexity of the COVID-19 supply chain lends itself not only to human error and logistical challenge but also intentional attacks. The Washington Post reports that hackers have already tried to penetrate the vital ‘cold chain’ for coronavirus vaccines. With these variables and risks at play, the need for a more coordinated and agile supply chain is key.
Supply Chain 4.0
The answer to many of these challenges is Supply Chain 4.0 – an extension of Industry 4.0. McKinsey defines Supply Chain 4.0 as “the application of the Internet of Things… the use of advanced analytics [and] big data in supply chain management: place sensors in everything, create networks everywhere, automate anything, and analyze everything to significantly improve performance and customer satisfaction.” Simply put, Supply Chain 4.0 is the interconnection of all parts of the supply chain to improve demand forecasting and supply replenishment so that the right amount of vaccine is delivered exactly as it is needed.
Supply Chain 4.0 helps coordinate all parts of vaccine delivery to avoid potential disaster, like vaccines becoming unusable because refrigerated warehouses are full, failing to match supply volumes with local delivery capability or, more importantly, eliminating the long lines of people waiting for their dose only to find out the allotment is depleted.
A key element of successful supply chains of this magnitude is agile demand forecasting. Leveraging all data sources and breaking down the silos that prevent data consolidation allows advanced predictive analytics. This can transform demand forecasting into demand planning, which analyzes data from tens to hundreds of data sources, considering both internal sources (from ERP, SCM, or MES systems) but also from external sources such as market trends, weather, public holidays, consumer pricing indexes, and more. The result is a comprehensive set of granular insights to inform an agile supply chain.
Agile demand forecasting underpins everything from real-time insights into inventory and replenishment plans. Ultimately, all of this informs a distribution plan which is built from a picture of demand at the factory floor. Predictive maintenance uses some of the same technologies to avoid breakdowns and outages in the fleet of trucks, aircraft or even the cold storage unit used in the supply chain, from factory to fleet and, eventually, pharmacy.
The impact this has on a business can be dramatic. One global mass merchant is already using Cloudera DataFlow to run predictive maintenance and monitoring in their freezer and cold storage operations, seeing over $500 million dollars in annual business impact from streaming data and advanced analytics.
On the other hand, supply chain 360 — the exchange of data at a granular level between supply chain participants and external partners — plays a role in much-needed supply chain agility. With a greater view both upstream and downstream, every member of the supply chain acts in concert with each other, rather than in a silo. All of this real-time collaboration is powered by data, and orchestrated in the cloud.
Another modern solution to improve supply chain agility, generate better solutions and forecast better outcomes is to model risk outcomes. Modeling can leverage data to deliver quantitative assessments from a larger and more diverse data set, which can help with decision making on the supply chain. Demand assessments can now be presented as probabilities across a number of scenarios — which vaccine is likely to be ready first, where it’s needed most and who can handle the shipment — and that can offer a range of solutions through targeted discussions. Modeling risk outcomes provides better upside potential and reduces downside risks in all sorts of operations planning – vaccine distribution included.
Lastly, governance is an area that can not be underestimated or overlooked. Coordinating a supply chain of this magnitude and importance means paying careful attention to governance issues and regulations which may change as the supply chain crosses national and regional borders. Again, coordinating this in one place, using the cloud as an orchestration layer, provides increased clarity and transparency.
Putting all of these pieces together by breaking down silos, aggregating all sources of data and supplying real-time insights used to drive demand and supply planning creates a more modern supply chain, capable of meeting the demands posed by the COVID-19 vaccine.
The Supply Chain’s Transformation
CEOs of major pharmaceutical and biotechnology companies have already upped production goals of the vaccine to from 1.3 billion doses to 2 billion in 2021. More than 44 million doses have already been distributed in 51 countries, reports Bloomberg. With so much at stake, it’s critical that the supply chain adapts to cope with such monumental, and changeable, demands.
The COVID-19 vaccine supply chain may go down in history as the largest single undertaking of manufacturing, transport, and logistics. Books will be written and movies will be made about the scientists who raced against time to develop, manufacture and distribute this vital medicine. But that’s not the whole story. There’s a huge role to be played by the data and advanced analytics that bring vaccines to reality, across the full spectrum of the supply chain. In the final retelling, data’s role may go uncredited, but it does desire to be in the opening credits as much a star of the story as anything else.
If you would like to learn more of Industry 4.0 or Supply Chain 4.0, please join us in attending Industry 4.0 – Made Real for a conversation between industry experts from Cloudera, Accenture, Dell, Intel, and Microsoft discussing practical solutions to current digital transformation challenges. Or see more about my insights at https://blog.cloudera.com/author/david-legrand/