Supply Chain in the Spotlight: Vaccine Chain Puts New Spin on Old Challenges

Editor’s Note: Craig Wylie is a Managing Partner and member of the Healthcare and Life Sciences practice at Arthur D. Little, an international management consultancy. He can be reached at [email protected].

After a nearly year-long pandemic, the world is jubilant over the upcoming vaccine distribution—but the supply chain knows all too well that significant challenges remain.

The CDC released its “interim playbook” for the COVID-19 vaccination program, so we know who will get it first: healthcare personnel and essential workers; people with increased risk of contracting and transmitting COVID-19, including seniors; and people with limited access to vaccines. Of course, this is just the first phase, soon after, production will ramp up, and distribution channels will widen to serve more and more of the population.

For the people, this marks the beginning of the end of our pandemic nightmare. But for the supply chain, it is just the start. To achieve sufficient levels of immunity among the global population will require billions of doses with a two-dose vaccine – roughly twice the world’s current total vaccine manufacturing capacity. Ultimately, though, this is not purely a capacity challenge. It’s a deployment challenge that pushes the boundaries of current infrastructure and established players.

Temperature requirements, for example, create new challenges for large scale distribution. The CDC’s logistics provider can only support up to -20°C conditions, and the Pfizer BioNTech vaccine requires a cold chain of -70°C – a demanding and expensive proposition. New storage solutions must be brought to market immediately. And while the new AstraZeneca/Oxford vaccine doesn’t require these conditions, it is some weeks behind in schedule.

Storage and distribution networks also need to be positioned in the right markets. Global deployment will trigger a massive network of providers throughout the chain, and the right links will need to be in the right geographic location.

While these and other obstacles are daunting, they can and will be overcome. Below are three considerations to ensure vaccine distribution success:

Control: The need for new technology requires that innovators take ownership of the current challenge. Whether a large distribution company or an energetic startup makes the investment and takes the risk, it will fall to a small number of market participants to take charge of elements like new approaches to cold storage or creative tracking mechanisms. If too many companies compete to lead the charge, the result will be chaos.

Collaboration: In a similar vein, all pieces and participants along the supply chain have to be easily identifiable. Only then can such a massive network be highly synchronized in record time – the metaphor of “building the plane while in flight” will not lead to good outcomes in this case. Consider that manufacturing does not yet exist, the cold chain does not yet exist, and a roadmap of priority delivery locations does not yet exist. Early cooperation between owners of different points of the supply chain – capacity, storage, distribution – will be essential.

Communication: Once the players know their roles, clear messaging and communication will be vital. This is essentially a global relief mission, and the supply chain must be prepared for an intensive spotlight. It is imperative that governments and industry stakeholders manage expectations about speed of delivery, which populations will be vaccinated first, and the rationale for such decisions.

In 2021, the supply chain will see a new level of scrutiny from the world’s population. To be ready, the right players will need to take ownership of unique challenges, a spirit of global collaboration should be teed up early, and clear communication channels must be open – starting today.

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