Building a Healthy Supply Chain

Dec. 12, 2006
7 Supply Chains to Look Out For in 2007 Keeping the population healthy means providing education, disaster preparedness and rapid response. A temporary

7 Supply Chains to Look Out For in 2007

Keeping the population healthy means providing education, disaster preparedness and rapid response. A temporary supply chain to deal with a natural disaster, bioterror attack or an epidemic looks a lot different from the logistics support the Centers for Disease Control and Prevention (CDC, needs for annual influenza vaccinations.

Coming off a year when manufacturing problems created a critical shortage of influenza vaccines, it's no surprise that the CDC's National Center for Immunization and Respiratory Diseases was receiving close scrutiny in the autumn of 2006. That's when demand is high for the latest flu vaccines. But, according to Dr. Julie Gerberding, director of the CDC, "Influenza is unpredictable, so we're not going to be able to say how fast it's going to evolve, where it will hit next or how bad it will be." In fact, different virus strains grow more rapidly than others, so the CDC doesn't get a lot of advance warning on what strain it will have to fight. And, in the 2006-2007 flu season, no fast-growing strain presented itself, so manufacturers were under pressure from the start.

With 300 million people in the United States, Dr. Gerberding says the CDC specifically recommends vaccinations for about 218 million people-which now includes children six months to five years of age. Not everyone will come forward for a vaccination, but the CDC still planned for 110 million to 115 million doses of flu vaccine, most of which is used in the first couple of months of about a six-month window.

The flu season typically peaks in February or later, notes Dr. Jeanne Santoli, deputy director of the Immunization Services Division of the National Center for Immunization and Respiratory Diseases, and individuals can be immunized with effect into December and January. Between communications programs urging individuals to get their flu shots early and a possible public perception created by the prior year's shortage, demand is concentrated in the months of September, October and November.

By the second week of October, the CDC noted, 40 million doses of influenza vaccine had been distributed, on the way to a planned distribution of 75 million doses by the end of the month. According to Santoli, that's the highest volume ever for that time period, but it's still just 65% to 68% of the 110 to 115 million doses expected to be distributed through the season.

By the last week in November, when the CDC was mounting its Influenza Vaccination Week campaign to encourage the public to get its flu shots, the CDC reported 92 million doses of vaccine had been distributed-over 80% of the total and still 60 days or more ahead of the traditional peak for the disease. That's also well ahead of the highest-ever 83.1 million doses distributed in 2003.

Behind the vaccine distribution is a complex manufacturing process involving a number of suppliers, each with its own distribution system. One manufacturer provides a nasal spray vaccine; three others make injectable vaccines. One of those products can be used by children under three years old, one product can be used by children four years and older, and another can be used by three-year-olds and above. The two latter products can also be used by adults. Some childrens' vaccines require multiple doses.

While the CDC has more control and visibility over pediatric vaccines and it can move the vaccines around to meet demand, the CDC has no regulatory authority over the manufacturers' distribution systems. It relies instead on a trust relationship in which manufacturers share proprietary data with the CDC, giving it at least partial visibility into product distribution. One manufacturer does most of its distribution direct to the individual providers, points out Dr. Santoli. Others operate through a combination of direct shipments and distributors.

To add to the complexity, the order process varies by manufacturer and channel. Some of the vaccine is produced to fill contract orders. Other product is manufactured under a pre-booking arrangement where the customer makes an offer to purchase and the manufacturer offers to have the vaccine available, but there is no binding agreement.

One of the CDC's chief supply chain lessons: managing expectations on who will receive what; when. Their supply chain sounds a bit disjointed, but it delivers, and it improves with each lesson learned.--Perry A. Trunick

Centers for Disease Control and Prevention National Center for Immunization and Respiratory Diseases
Serves: 300 million people
Distributes: 110 million to 115 million doses of flu vaccine (80% within two months)
Supply Chain: Multiple manufacturers, various ordering and distribution processes, direct control of less than 10% of distribution

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