The arrival of the COVID-19 pandemic has disrupted the global supply chain like has never been seen before. At PSA we have been witness to how it has exposed the weaknesses in public health supply chains in many low- and middle-income countries, particularly in the operational models of lean supply.
It is fortunate that the pandemic has not hit low- and middle-income countries to the scale it has affected Western countries. The result could have been catastrophic, and would probably have decimated the population, particularly in Africa.
In-shoring vs offshoring
The pandemic has been a wake-up call for countries to reconsider their sourcing strategies and move away from relying on one source of supply. A clear example is in the fact that China is the main manufacturer and supplier of Active Pharmaceutical Ingredients (API). It is estimated that they make around 40% of APIs used around the world. The dependence on China in the pharmaceutical industry has been a source of concern. For Africa the knock-on effects could be particularly significant as all APIs and 80-90% of medicines are imported. This has led many countries, both in the West and in Africa, to consider in-shoring – meaning the development of local manufacturing capacity. This would be particularly beneficial in the case of equipment that has been in high demand during the pandemic (like PPE).
One of the biggest challenges with local production will be manufacturing pharmaceutical products without API . Market regulations will also need to be developed to avoid fake and substandard products. Establishing local manufacturing successfully will therefore require strong political commitment, coordination at all levels, sustainable investments, regulatory support, and meaningful technology transfer.
The shift to digital
Obviously in recent times there has been global shift towards digital, but the pandemic has accelerated this progression. This is particularly true in the commercial world with a shift towards e-commerce that is likely to remain permanent. Where does this leave poorer countries? Work will need to be done to help them keep up with market changes and take advantage of the opportunities they provide.
A UNCTAD survey highlighted that education was one of the sectors with a strong digital shift- for obvious reasons. People are now having to learn in different ways. Even before the pandemic the online education market was predicted to reach $350Billion by 2025. At PSA we have traditionally run classroom courses to help students learn supply chain best practice and develop ideas by interacting with each other. We are currently in the process of developing our first completely online course in Health Supply Chain Management which is launching next month. This has meant we have had to carefully consider how to keep interactivity a central part of the learning process, whilst taking on the challenge of making learning accessible in locations that have low online bandwidth and unreliable internet. There are many learning technologies being developed for exactly this purpose.
Impact on women
A report by the Africa Union estimates that due to the COVID-19 pandemic, “nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction”. There are concerns about the long-term impact this will have, particularly on social unrest. In both Africa and the Western world, reports have shown that the impact of the pandemic has also sent women’s progress backwards. This recent report shows that the pandemic will push 96 million people into extreme poverty by 2021, 47 million of whom are women and girls. Globally 70% of health workers and first responders are women.
There are strong hopes that 2021 will be a better year with eyes firmly fixed on the vaccines now being rolled out in many countries. However these vaccines are only going to be effective if they are rolled out efficiently – and globally – or the risk of increasingly problematic mutations rises. Therefore, a heavy burden of responsibility rests on the shoulders of logistics and supply chain professionals – are you ready to save the world?
Covid vaccine distribution will require robust logistics and supply chain readiness – we can help you to gain the essentials skills and knowledge to tackle these challenges.
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