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Contents lists available at ScienceDirect

Vaccine journal homepage: www.elsevier.com/locate/vaccine

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Integration of vaccine supply chains with other health commodity supply chains: A framework for decision making

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Prashant Yadav a,∗ , Patrick Lydon b , Julianna Oswald c , Modibo Dicko d,1 , Michel Zaffran b,2 a

William Davidson Institute, Ross School of Business, and School of Public Health, University of Michigan, Ann Arbor, MI, USA Expanded Programme on Immunization, Department of Immunization, Vaccines and Biologicals, World Health Organization, 20 Avenue Appia | CH-1211 Geneva 27 Switzerland c Ross School of Business, University of Michigan, Ann Arbor, MI, USA d Health Supply & Solar Systems (H3S), Systèmes Solaires & Logistique de Santé, Cité El Farako, Porte 145 Rue 806, Bamako, Mali b

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Article history: Received 30 May 2014 Received in revised form 21 September 2014 Accepted 1 October 2014 Available online xxx

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Keywords: Vaccine supply chain Supply chain integration Vaccine delivery Vaccine distribution Cold chain logistics Supply chain segmentation

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1. Introduction

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One of the primary objectives of National Immunization Programs is to strengthen and optimize immunization supply chains so that vaccines are delivered to the end recipients effectively, efficiently and sustainably. As a result of larger investments in global health and a wider portfolio of vaccines, global agencies are recognizing the need for vaccine supply chains to operate at their most optimal levels. Integration with other supply chains is often presented as a strategy to improve efficiency. However, it remains unclear if the proposed benefits from integration of vaccine supply chains with other supply chains will outweigh the costs. This paper provides a framework for deciding where such integration offers the most significant benefits. It also cautions about the pitfalls of integration as a one size fits all strategy. It also highlights the need for systematic collection of cost and efficiency data in order to understand the value of integration and other such initiatives. © 2014 Elsevier Ltd. All rights reserved.

One of the primary objectives of National Immunization Programs (NIPs) is to ensure the uninterrupted availability of high quality vaccines to immunization service delivery points. Delivering vaccines effectively, efficiently and sustainably requires a strong and optimized immunization supply chains. Supply chains for vaccines and essential medicines are under increasing pressure to operate more effectively and efficiently [1–3]. Large scale investments and a wider portfolio of vaccines have highlighted the need to achieve higher efficiency in vaccine supply chains [1,4–7]. This recent focus on efficiency has led to an increased focus on merging multiple disease-specific supply chains such as vaccines, maternal and child health medicines and family planning products, into one integrated supply chain. As many new and underused vaccines

∗ Corresponding author. Tel.: +1 734 936 3913. E-mail addresses: [email protected] (P. Yadav), [email protected] (P. Lydon), [email protected] (J. Oswald), [email protected] (M. Dicko), [email protected] (M. Zaffran). 1 Tel.: +223 66 34 89 84/75 43 34 41. 2 Tel.: +41 22 791 5409.

of public health importance are being introduced in developing countries, lack of capacity in the vaccine supply system is becoming a key bottleneck. Integrating the supply chains for essential medicines and vaccines is also being touted as a possible way to address the capacity bottlenecks faced by new vaccines. While EPI was intended to be used for multiple cold chain products, in the recent past vaccines were the only health products requiring a cold chain, and a vertical supply chain was justified. Oxytocin (to prevent and treat post partum hemorrhage), some antiretroviral drugs, diagnostic tests, antibiotics and a growing number of other pharmaceutical products require controlled-temperature storage [5]. This has led to a renewed inquiry into supply chain integration between vaccines and other public health products. A typical Ministry of Health (MOH) in a Low Income (LIC) or Lower Middle Income Countries (LMIC) runs multiple programbased supply chains, of which the Expanded Program on Immunization (EPI) and vaccine supply chain is one. A recent WHO study in 13 countries found that on an average, there are 18 procurement agencies and 84 distribution channels in each country [8]. Proponents of such an architecture, which leads to almost separate supply chains for each disease program, argue that disease-specific supply chains allow better management span of control and allow supply chain strategy to be better aligned with the program

http://dx.doi.org/10.1016/j.vaccine.2014.10.001 0264-410X/© 2014 Elsevier Ltd. All rights reserved.

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strategy. Program-specific supply chains allow for the design of policies and procedures to achieve program-specific service targets. Others argue that this fragmented structure leads to redundancy, unnecessary complexity and poor coordination. Some argue that multiple parallel supply chains result in poor economies of scale and scope and therefore higher costs and lower efficiency. In theory, integrating vaccine supply chains with those for other health products could improve overall efficiency by distributing the costs of warehousing, transport and other such shared functions across a number of program areas. While some challenges still exist in the supply chains for EPI vaccines, in many countries the EPI supply chain is functioning reasonably well relative to some other disease programs [9]. Integration across multiple products adds tremendously to the complexity of supply chain management. Integrating vaccine supply chains with other supply chains requires intensive and complex coordination; otherwise the performance of vaccine supply chains could suffer. Given the varying characteristics required for warehousing and distributing vaccines as compared to many other health products (cold chain, resupply intervals, scheduled vaccination cohorts, etc.) it is evident that integrating vaccines with other health products into a single supply chain could lead to mediocre effectiveness. Global policy makers and national immunization program managers face ambiguity as to whether or not supply chains for vaccines should be integrated with other supply chains, and whether the proposed benefits outweigh the costs. Decisions regarding which supply chains to integrate and as well as which stages of the process to synchronize can be dauntingly complex. Products such as malaria medicines have a less predictable and more seasonal demand schedule that require different operating rules than vaccines, which are distributed according to a pre-specified schedule or based on birth-cohort enrollment. Another important consideration is that products with cold or cool chain requirements necessitate stricter stocking, transport, and resupply intervals than essential medicines or other health products. Furthermore, the service delivery points to which the product has to be supplied also impacts its resupply interval. This paper provides National Immunization Program managers, their technical support staff, policy makers in Ministries of Health, and global agencies involved in vaccine and health product supply chains with a better understanding of the benefits and potential risks of integrating vaccine supply chains with other health commodity supply chains. Admittedly, understanding the benefits of integration requires NIP managers to systematically capture distribution costs and performance metrics related to supply chain effectiveness. In the absence of these it is hard to generate rigorous evidence on the benefits of integration. This paper presents a simple framework for exploring this issue.

2. Methodology Existing published literature on supply chain integration both in the context of public health supply chains, vaccine supply chains, and in the commercial sector were reviewed. EBSCO was searched for “supply chain integration”, “supply chain segmentation”, “logistics integration” with time ranges 1990-present. In addition, non-peer reviewed literature from multiple sources was obtained. The literature review was used to develop a comprehensive understanding of the benefits, costs and challenges associated with integration of supply chain functions in public health supply chains. A desk review of background technical documents, including previous technical documents on supply chain integration developed by Project Optimize (a WHO and PATH collaboration on immunization supply chain systems for the future) and an

earlier literature review [10] were used to complement the literature search. Integration of family planning programs into other health services has been pursued by many countries in Latin America, Asia and Africa, and the USAID/Deliver project has successfully captured the key lessons learned from such integration initiatives [11–13]. These were used to understand integration and associated challenges from other public health fields. Findings from a large sample questionnaire conducted by Project Optimize in 2011 to assess the extent of supply chain integration currently being pursued by different NIPs was used to validate assessments of the ease of integrating specific functions within the supply chain. In depth case studies from Senegal and Tunisia, two countries that were pursuing a vaccine supply chain integration project in collaboration with Project Optimize were used to understand the barriers to integration. Meetings and telephone interviews were then conducted with key stakeholders involved in vaccine supply chains at the global level. 3. Horizontal vs. vertical integration Traditionally, a firm is considered vertically integrated when it operates at successive levels in the value chain whereas when a firm operates at the same level of the value chain but in different industries it is horizontally integrated. There are a number of different definitions and interpretations for the term integration used in the global public health supply chain community [14,34]. In many instances supply chain integration refers to the integration of physical and information flows between the different levels and functions within a supply chain [15]. While this definition is important and often such integration can be a source of significant performance improvement, this paper focuses on horizontal supply chain integration i.e. the merging of more than one vertical supply chains for specified programs or product categories. 4. Horizontal supply chain integration in commercial sector The commercial sector has developed and operates effective and efficient supply chains for a variety of products. Many argue that the high availability of consumer products at retail outlets in the most remote areas of the world is indicative of the effectiveness and efficiency of commercial sector supply chains. While there are significant differences between the strategic objectives and operating rules of commercial sector supply chains as compared to vaccine and essential medicine supply chains [16] it is worth understanding the extent to which supply chains in the for profit commercial sector are integrated across product categories. As mentioned earlier, integration in the commercial sector is used more often to refer to integration across functions within a supply chain for a single product category and less for supply chains integrated for different product categories. A large majority of research and trade literature deals with vertical supply chain alliances in which partnerships are created between firms operating at different levels of the supply chain [17]. However, some studies have captured the extent of supply chain integration across product categories within a company [18–20] and also horizontal collaboration across firms in the same industry [21,22]. Analysis of such studies reveals that leading commercial companies tailor their supply chains to serve different products to different customer segments through different supply chain configurations. They seldom use a single supply chain to serve all product categories and customer segments as this would result in a supply chain strategy mismatch [23]. They rely on effective segmentation of product categories based on carefully analysis of

Please cite this article in press as: Yadav P, et al. Integration of vaccine supply chains with other health commodity supply chains: A framework for decision making. Vaccine (2014), http://dx.doi.org/10.1016/j.vaccine.2014.10.001

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a select criterion. The segmentation is done based on both customer and product characteristics. Tailored supply chains are then designed for each segment. When a company uses a supply chain for a product segment that is not tailored to the product’s need, this is termed supply chain and product strategy mismatch [23] Even when physical supply chains are segmented and separate, there is a common information architecture that allows multiple unique supply chains to reconcile their inventory status, physical flow, and financial information at the highest level. Horizontal collaboration across firms in an industry tends to be increasing in the transport sector. Horizontal collaboration in transport has shown to be able to increase efficiency between 10 and 30% [21]. Integration in the commercial sector is not easy though. It brings additional technical and political complexities. Managers of product categories fear losing control over their portion of the supply chain and they fear that diffused management oversight may hamper performance of their product lines [18,19,35]. 5. Experiences from the integration of family planning products with essential medicines In the last 20 years family planning programs in many countries were integrated into other health services, particularly other reproductive and maternal and child health services. As a result of overall FP program integration, the supply chains for reproductive health products were also integrated into larger systems. These experiences [11–13,33] provide vital learning opportunities for integration of vaccine supply chains with other supply chains.

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chain functions to integrate or to keep separate. It demonstrates that data quality often decreases when integrating logistics management information systems. It also shows that integrating storage and distribution are technically feasible and yield significant benefits as long as there is sufficient political buy-in and receptiveness towards collaboration between the programs that are being integrated. The diverse set of examples and the findings from them also highlight the need for greater operational research on this. 6. Vaccine supply chain generic map The supply chains for vaccines in countries take various forms, but usually consist of quantification, procurement, storage in warehouses at the central, regional, and/or district levels [9,25], and the vaccine is transported from a higher tier storage location to the next tier. Typically, 2–3 tiers of storage occur before the vaccine reaches the immunization service delivery point [26,27]. Information systems capture product flow information at each step in the delivery process. While each country varies in the exact structure, to enable comparisons and draw generalized conclusions Fig. 1 below allows parsimonious representation required for drawing key inferences and generating insights Pilot projects and data from questionnaires was used to assess where in the supply chain depicted in Fig. 1 were integration activities more likely and if estimates were available for resulting benefits. 7. Vaccine supply chain integration in Tunisia and Senegal

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• Zambia integrated and shifted separate storage for as many as eight different health programs to the Medical Stores Limited (MSL), making transportation arrangements complicated. After integration, supplies for all vertical programs (except EPI) were stored and distributed from MSL making primary transport much better coordinated. There were significant challenges in the integration of the logistics management information system (LMIS) across different programs. • Nepal successfully integrated all MOH logistics activities under a single entity. LMIS, procurement, forecasting, storage, distribution, requisitioning have all been integrated across multiple programs. The integration project took several years to reach its intended outcomes but is now considered the hallmark of effective integration. • Bolivia experienced challenges as integration initially led to worsening data quality in the LMIS but changes in the reporting forms have gradually helped resolve the problem [13]. • Nicaragua successfully integrated the distribution of essential medicines and contraceptives, which led to improved availability of both products and cost savings for the national program [12,13]. • Tanzania integrated family planning with essential medicines, which resulted in lowered distribution costs for the family planning program by over 40% but it compromised data quality. • Mali integrated family planning into the essential medicines program without adequate planning resulting in poor availability and system disruption [24]. • Bangladesh developed its integration process well, but it was hampered by political issues and extreme animosity that existed between health and family planning staff over the issue of integration. The health staff perceived integration as adding to their resources and responsibilities, while their family planning staff perceived it as an end to the family planning program. A key finding from the integration of FP into health programs was that there is need to carefully analyze which supply

Project Optimize worked with the NIP and Ministry of Health in Tunisia [28] and Senegal [29] to demonstrate the feasibility and benefits from integrating the vaccine supply chain with supply chains for other health products. Both countries were interested in exploring ways to improve supply chain efficiency and wanted to assess whether supply chain integration can be a mechanism for achieving that. Slightly different levels of integration were implemented at different levels of the supply chain network in the two cases. In the case of Tunisia [28], products that required storage and transportation at temperatures between 2 and 8 ◦ C (i.e. vaccines, serums, biological products, and temperature sensitive drugs) were integrated into a common supply system from the regional warehouses to the service delivery points. A demonstration project was carried out in the Governate of Kasserine initially and then some other districts started using it as well. All cold chain, controlled temperature chain and dry health products were warehoused together and were transported together from the regional levels down to health center levels. Procurement, quantification and distribution from national warehouse to regional warehouses maintained status quo (carried out separately for vaccines and other products). In order to assess the extent to which the integration was working, vehicle drivers were asked to record whether the reason for their trip was: [1] transporting vaccines and supplies; [2] transporting drugs and pharmaceuticals; [3] for service delivery related activities; and [4] for supervision. A trip could combine multiple elements in which case the driver would mention all the elements related to a particular journey. Trips that were out of scope were excluded from the analysis. The logbook information was analyzed and each trip was classified into four different levels of integration. • • • •

Level 1: Transport vaccines only Level 2: Transport Vaccines and carry out 1 additional activity Level 3: Transport Vaccines and carry out 2 additional activities Level 4: Transport Vaccines and carry out 3 additional activities

Please cite this article in press as: Yadav P, et al. Integration of vaccine supply chains with other health commodity supply chains: A framework for decision making. Vaccine (2014), http://dx.doi.org/10.1016/j.vaccine.2014.10.001

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Fig. 1. Typical structure and steps in the vaccine supply chain.

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Integration Level 1 implies the trip was carried out only for vaccine transport and essentially no integration occurred. On the other hand, a trip coded as integration Level 4 meant that the journey was comprehensively integrated and included all elements of vaccines, drugs/pharmaceuticals, service delivery and supervision. 36% of trips from the district to the health facility were made for solely transporting vaccines and without any integration. This could be due to the national vaccine supply constraints and non-availability of vaccines at the district level in time to coordinate with deliveries for other items. It is noteworthy that 12% of trips were for transporting vaccines and for carrying out two other activities often transport of other essential medicines being one of them. From the regional level to the district 88% of trips were for transporting vaccines and at least one additional activity, often the transport of other essential medicines. While the integration demonstration project that was started in Kasserine has been used for other districts in the region there is currently no national scale-up plan. Tunisia has faced socio-political uncertainties in the recent past and not being a GAVI country leads to constraints on financing for improving vaccine delivery systems. In Senegal [29], the Ministry of Health, in collaboration with Project Optimize, designed a single, integrated health supply chain for public-sector vaccines, drugs, and other health products from the national level to the regional level. This required the National Supply Pharmacy (PNA) to start receiving and storing vaccines and distributing them to the DPM regional stores. In the pilot region of Saint-Louis, vaccines would be distributed along with other drugs and health products from the PNA directly to the Regional Supply Pharmacy (PRA). The vaccine supply chain from the regional level to health posts and health centers was streamlined and integrated with essential medicines and health products for AIDS, malaria, and tuberculosis programs. Specially equipped trucks known as the “moving warehouse” were deployed to transport vaccines and other health products from regional stores directly to over 100 health centers and posts. Apart from delivering vaccines and essential medicines the moving warehouse staff would record stock levels and replenishing stock as needed (informed push). The integration demonstration project is still underway in St-Louis and the government is pulling together resources to scale up the integrated moving warehouse system to other provinces.

The two projects demonstrated that integration of transport at the last leg of distribution is feasible and leads to more effective route planning and vehicle utilization. The projects did not pursue integration at the higher national level or in areas of procurement, quantification and distribution. Even for integration at the final transport leg, changes were required in processes and practices that had been in place for more than 30 years, causing some stakeholders to be resistant to the integration initiative. Well-designed advocacy and communication plans and participatory project design helped to alleviate some of these concerns and obtain stronger support for the integration project [30]. It is also evident that the value of integration has not been realized or internalized by national stakeholders.

8. Current status of integration of the vaccine supply chain In order to understand the current landscape of integration in the vaccine supply chain Project Optimize did a survey in 2010 and responses were obtained from a total of 30 countries out of the 46 of the WHO African Region (AFR). NIP managers were asked about different functional areas of the supply chain and whether they were integrated with other drugs and/or health products (Table 1). These functional areas as regrouped into 4 main integration areas: Ordering and receipt, Storage and distribution, Management processes, and Assets. Table 2 shows that ordering and receipt is the least integrated area. This is perhaps due to the fact that in the AFR region a large number of countries procure their vaccines through UNICEF. Even within the immunization supply chain the ordering, receipt and storage of injection supplies in some instances was managed separately from that of vaccines. This reflects the complexities in the ordering and procurement processes of vaccines and essential medicines which may render integration difficult. Management processes which included conducting joint activities, such as planning, training, M&E and supervision are relatively easier to integrate and 60% of those activities are integrated. While storage and distribution is more challenging to integrate due to differences in resupply intervals, demand uncertainty and inventory rules, it appears that a large number of countries are still able

Please cite this article in press as: Yadav P, et al. Integration of vaccine supply chains with other health commodity supply chains: A framework for decision making. Vaccine (2014), http://dx.doi.org/10.1016/j.vaccine.2014.10.001

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Table 1 Status of integration of vaccines into supply systems for drugs and other health products across the Africa Region—Results from Surveys with NIP Managers in February–March Q7 2010. Data collected by Project Optimize.

West Africa

Central Africa

AFR

Ke ny a Ma da g Ma asc l a w ar So i uth Ug Afric a an d Co a mo rro Er itre s a Et hio p Le ia so tho Ma uri ti Mo us za mb Se i qu yc e he lle Sw s az ila n Ta nz d an ia Za mb ia Zim ba bw Av e er .E SA Ca pe Ve Ga r mb de i Gh a an a Gu ine a Gu ine aB Li b eri . a Ma uri tan Ni ie ge r Ni ge ria Sie rra Av Leon er .W e A An go la Eq u. G RC uine a A ST P Av er .C A Av er .A FR

Eastern & Southern Africa

Ordering & Procurment Arrival & transit operations Ordering & reception Central Store Regional Store District Store Central store to Regions Regional store to districts District Store to Service delivery Storage & distribution Trainings Planning Monitoring and Evaluation Supervision Management processes Staff Equipment & Infrastructure Vehicules Finances Information System LMIS Assets Overall

386 387

Yes No Yes No Yes Yes Yes No No No No No No No Yes No No No Yes No No Yes Yes No No No No No No Yes Yes No 50%

No Yes No Yes No No 33%

Yes No No No 25%

No No Yes No No

0% 100%

No No No No No No

Yes Yes Yes Yes Yes Yes

0% 50% 100% 100%

No Yes Yes No Yes Yes

0%

No Yes Yes No No Yes Yes No No No No Yes Yes Ys*** Yes Ys*** Yes No Ys***

0%

0% 100% 67% 17% 50% 67% 50% 50%

No No No No

Yes Yes Yes Yes

No Yes Yes Yes

No No Yes Yes No Yes No Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes

0% 100% 75% 75%

No No No No No

0% 100% 100% 75%

Yes* No No Yes* Ys** No No Yes* Ys** No Yes Yes* Ys** No No No No

Yes No Yes Yes Yes

Yes* Yes Yes Yes Yes

0%

Yes No No No No No Yes No Yes No

Yes Yes Yes Yes No

0%

0%

0% 50% 100%

0%

Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes No No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

0% 33% 33% 67% 100% 100% 100%

No No No No

Yes Yes Yes Yes

No Yes Yes Yes

Yes Yes Yes Yes

Yes Yes Yes Yes

Yes Yes Yes Yes

No No Yes Yes

0% 100% 75% 100% 100% 100% 50%

No No No No No

Yes Yes Yes Yes

Yes Yes Yes No

Yes Yes Yes No

Yes Yes Yes No

Yes Yes Yes Yes Yes

Yes Yes Yes Yes Yes

20%

0% 80% 60%

0% 20% 80% 100% 80%

0% 80% 60% 60% 60% 100% 100%

29%

0% 94% 59% 29% 35% 82% 71% 59%

0% 65% 47% 65% 82% 100% 76%

38% No Yes No No No No No Yes No No 31% No Yes No No No No No Yes No No 34% 0% 100% 0% 0% 0% 0% 0% 100% 0% 0% 63% No No Yes Yes No No No No No No 56% No No Yes Yes No No No No Yes No 31% No No Yes Yes No No No No Yes No 63% No No Yes Yes No No No No ¨No No 63% No No Yes Yes No No No No Yes No 56% No No Yes Yes No No No No No No 55% 0% 0% 100% 100% 0% 0% 0% 0% 50% 0% 50% No Yes No Yes No No No Yes No Yes 69% No Yes No Yes Yes No No Yes No Yes 75% No Yes No Yes No Yes No Yes No Yes 75% No No Yes No No Yes 67% 0% 100% 0% 100% 33% 33% 0% 100% 0% 100% 63% No Yes No Yes No No No No No Yes 63% Yes Yes No Yes No No No No No Yes 81% Yes Yes No Yes No No No No No Yes 50% No Yes No Yes No No No No No Yes 40% No Yes No Yes Yes No Yes No No Plan 59% 40% 100% 0% 100% 20% 0% 20% 0% 0% 80% 56% 13% 59% 35% 88% 13% 12% 6% 31% 18% 47%

to achieve some level of integration in that area especially at the sub-national level. •

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9. Identifying the opportunities for integration

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Using the insights from the two case studies, data from the questionnaire, consultative interviews and literature review (as described in the methodology) we identified opportunities to integrate supply chains for vaccines with those for other health commodities. We first asked which stages in the supply chain have the greatest potential and then asked which products have the strongest potential for integration.

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9.1. What activities to integrate?

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The different stages in the supply chain were evaluated for their integration potential:

•

•

• Quantification: It is difficult to integrate the quantification and demand planning of vaccines and non-vaccines. The projected number of vaccines needed is calculated based on birth cohort size, historical or targeted immunization coverage rates and a buffer for wastage and pipeline inventory. The demand for medicines is more complicated as projections factor in disease incidence, treatment-seeking behavior and many other factors, making these two areas hard to integrate. At this level of the supply chain, the only potential for integration is in shared •

Table 2 Current status of vaccine supply chain integration. Functional area

Percentage integrated (%)

Ordering and receipt Storage and distribution Management processes Assets Overall

35 42 60 57 50

Percentages are the proportion of supply chain activities within that area that were integrated.

20% No Yes Yes Yes 20% No Yes Yes Yes 20% 0% 100% 100% 100% 20% Yes No Yes Yes 30% Yes No No 30% Yes No No Yes 20% No No No Yes 30% Yes No Yes 20% Yes No Yes 25% 83% 0% 50% 67% 40% Yes No Yes No 50% Yes Yes Yes Yes 50% Yes No Yes Yes 33% 43% 100% 33% 100% 67% 30% Yes No Yes Yes 40% Yes No Yes Yes 40% Yes Yes Yes Yes 30% No Yes Yes Yes 40% Yes Yes Yes Yes 36% 80% 60% 100% 100% 32% 75% 38% 81% 81%

75% 75% 75% 75% 33% 50% 25% 75% 67% 54% 50% 100% 75% 75% 75% 75% 100% 75% 100% 85% 69%

37% 33% 35% 43% 43% 33% 37% 53% 43% 42% 53% 67% 67% 54% 60% 53% 57% 70% 53% 50% 57% 50%

repositories for demographic data, so that population level information can be pulled from the same source. Procurement: Vaccines and non-vaccines have very different procurement processes. Many National Immunization Programs procure their vaccines through UNICEF, while medicines are procured through a country’s Ministry of Health or through a third party contractor. As such procurement is a difficult stage for much integration. Requisition/ordering: Due to the very different order schedules and processes, the costs of integration at this point along the supply chain likely outweigh the benefits. Requisitions for vaccines are carried out using a routine order process typically managed based on immunization schedules and birth cohorts [31]. Essential medicines follow a less predictable process that relies on health center staff requesting quantities based on the needs in their specific facilities. Storage: There are significant opportunities for integration between vaccines and non-vaccines at the storage phase of the supply chain. While most vaccines must be stored at specific cold temperatures (cold chain), this is also true for some medicines for non-communicable diseases, HIV/AIDS test kits, as well as uterotonics for maternal health. Integration at this level could lead to savings in fixed costs such as storage security or administration and could also lead to improvements in storage conditions across different products. The large need for additional storage space (cold chain) resulting from the introduction of new vaccines [1–4,6,7] provides a clear integration opportunity at this stage in the supply chain. Transport: There are tremendous opportunities for integration at the transport stage that could lead to greater efficiency across supply chains. Examples from Senegal and Tunisia have clearly demonstrated that transport at the last leg of the supply chain can be effectively integrated for vaccines and non-vaccine health products as long as their temperature requirements, resupply intervals and service delivery points are well matched. Scarcity of transport assets [32] also means that achieving higher transport utilization is central to improving performance and will also be easier to implement politically. By using the same trucks to

Please cite this article in press as: Yadav P, et al. Integration of vaccine supply chains with other health commodity supply chains: A framework for decision making. Vaccine (2014), http://dx.doi.org/10.1016/j.vaccine.2014.10.001

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transport both vaccines and medicines from regional or district storage facilities to health clinics, savings can be created in areas such as vehicles, fuel and personnel costs. Furthermore, integration will allow for more full truck loads, and will lead to an increased frequency of delivery which could further benefit forecast accuracy and reduce stockouts. The benefit of transport integration also depends to a great degree on whether transport is carried out using an in-house fleet or using an outsourced Third Party Logistics operator (TPL) and the nature of contract with the TPL. The benefit of transport integration is highest when there are multiple entities and a fragmented transport network is being used by the supply chain. Additionally, in some transport contracts any gains from integration/higher asset utilization are passed on to the shipper but in most others they are not. In cases with outsourced transport, some type of gain-sharing contract with the TPL is needed in order to fully leverage the benefits from transport integration. Transport integration, however, is not always an easy task. Lack of strong and effective communication channels between different product supply chains that are attempting to integrate transport can lead to significant delays. In some instances the existing vehicle fleet may need to be upgraded in order to support integrated delivery and its related volume and temperature challenges. The challenge with integration at this stage is to ensure that it does not delay the delivery of vaccines, which must be delivered according to a strict timetable. • Information systems: Vaccines and non-vaccines can be integrated very effectively at the information systems level. The commercial sector has demonstrated that while there may be multiple supply chains to suit product- or customer-specific requirements they can be managed and coordinated using a common information system. In addition to saving on fixed costs, a common Logistics Management Information System (LMIS) would provide Ministries of Health with an integrated overview of multiple supply chains that could allow for coordination between otherwise fragmented agencies. Currently, in most cases each vertical supply chain has its own LMIS and after many years of training and experience the staff in the program is well trained in the use and reporting of their specific LMIS. Many previous examples have shown that the quality of LMIS data falls after integration unless significant training is conducted proactively or human machine interface design and form design are very robust.

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9.2. What products to integrate? Product segmentation

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Supply chains for vaccines and health products consist of a vast variety of products, each with its own demand and supply side 490 characteristics. It can be challenging to design an integrated supply 491 chain that can manage this variety of product and customer require492 ments without compromising effectiveness. A key best practice 493 from the commercial sector is segmenting health products to iden494 tify groups of products that are appropriate for integration [14]. 495 A tailored supply chain can then be designed for each segment 496 which would yield higher benefits from integration and also result 497 Q2 in easier implementation (Fig. 2). 498 While more detailed product-specific analysis can only be done 499 after looking at product demand patterns in the specific geo500 graphical context where integration is being pursued, a first-level 501 analysis was conducted (Table 3) from which some clear principles 502 emerged. 503 Products such as malaria medicines and essential medicines that 504 have less predictable and more seasonal demand would require 505 different operating rules as compared to products which are dis506 tributed according to a pre-specified by a schedule (i.e., bed-nets 507 and vaccines) or based on patient enrollment (i.e., ARVs and some 508 vaccines). While cold or cool chain requirements are an important 509 489

Fig. 2. Segmented supply chain integration.

distinction that would necessitate a different segment, often times the more critical components are the frequency of resupply (periodic vs. campaign) and the variability in the demand (uncertain consumption vs. or enrollment/cohort based). The service delivery points to which the product has to be supplied also impact its resupply interval. Products that are mostly stocked in large hospitals, with many patients, require frequent (once every week) resupply of hundreds of products. Products for rural primary health centers may see only a few patients per day and would have resupply intervals of a month or more. Therefore, a high degree of overlap between the service delivery points creates synergies in products for integrated distribution. Table 4 presents a preliminary analysis of products that have a potential of being integrated in storage and distribution with vaccines based on literature and consultations with different stakeholders. It is evident that many products such as de-worming tablets, C = childhood iron or Vitamin A deficiency tablets and IPTi drugs (i.e. SP) would all be very suitable for integration given the similarities of their target population and distribution schedule with vaccines. Other products such as HIV/Test kits are ideal candidates for integration due to the temperature controlled distribution requirements and a pre-set distribution schedule. Some products that are now receiving increased attention such as uterotonics for maternal health or insulin for diabetes also offer opportunities for integration with vaccine storage and distribution, as they also need controlled temperature distribution. Oxytocin (to prevent and treat Post Partum Hemorrhage) presents a particularly strong example of a product that has cold chain needs, has somewhat predictable demand/stock supply pattern and resupply frequency and has significant overlap in the service delivery points. The United Nations Commission on Life-Saving Commodities for Women and Children has called for integrating oxytocin in the EPI supply chain and projects are being designed to test this approach [5].

Table 3 Product attributes to include in segmentation. Product attributes for segmentation Planning and quantification requirements and frequency Supply sources Demand uncertainty/variability Demand seasonality Frequency of supply/resupply Interval Temperature requirements (i.e. cold chain) Shelf-life Location and type of service delivery points Distribution security requirements Volume Service level requirements

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7

Table 4 Preliminary analysis of product categories that fit with vaccines for integration. Product

Demand side characteristics with vaccines

Service delivery points

Temperature sensitive distribution requirements

Deworming tablets (Albendazole, medendazole, levamisole, praziquantel) Childhood Iron or Vitamin deficiency tablets, e.g. Vitamin A IPTi drugs (i.e. SP) HIV test kits and reagents

Distributed on a pre-set schedule

Similar to vaccines

Ambient

Consumption based but somewhat predictable Distributed on a pre-set schedule Consumption based but more predictable Consumption based but more predictable Consumption based but somewhat predictable Mostly distributed in campaigns Uncertain Distributed based on patient enrollment and diagnostic status Uncertain and Seasonal Consumption based but somewhat predictable Uncertain

Similar to vaccines

Ambient

Similar to vaccines Often different from vaccines

Often different from vaccines Similar to vaccines Often different from vaccines

Ambient Controlled temperature or cold chain Controlled temperature or cold chain Ambient for most controlled temperature for some Ambient Ambient Controlled temperature chain

Similar to vaccines Often different from vaccines

Controlled temperature chain Cold chain

Often different from vaccines

Cold chain

Laboratory reagents Reproductive health products Malaria bednets Equipment spare-parts ARVs ACTs malaria medicines Insulin Uterotonics (i.e. oxytocin)

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The integration opportunities described in Table 4 do not refer to procurement and sourcing integration as a different set of factors will determine that. 9.3. Country specific factors in pursuing supply chain integration The extent of benefits that may accrue from integration depend on the stage of integration and the readiness of the overall political economy in the country. Integration is often considered as a continuum, with each element of the supply chain finding its correct place within the continuum depending on different context specific factors. The overlap that exists between the supply chain for medicines, health products and vaccines influences the benefits and readiness for further integration. Political buy-in and support from the highest levels of leadership in the health sector, a national focus on efficiency in the supply chain and advocacy of global agencies together create the right climate for initiating integration activities. The absence of any of these can result in significant hurdles for integration as was shown in the detailed case studies and many examples from FP integration. Apart from political factors, the macro-economic context also influences the readiness of a country for integration. Countries with a well-developed transport sector and TPLs to which the MOH can outsource transport and distribution of vaccines and non-vaccine health products have a much easier case to build for integrated transport and distribution. 10. Conclusions The integration of vaccine supply chains with those for other health commodities can potentially lead to improved economies of both scale and scope. Investments in supply chain security can yield better returns, as integration can lead to savings in fixed and operating costs in areas related to transport, warehousing, distribution and supervisory control. The greatest challenge in integrating multiple supply chains is in managing the variety of product and customer requirements without compromising effectiveness. The variety of products contained in the supply chains for vaccines and health commodities is vast, and is further complicated by each product having its own unique demand and supply side characteristics. If pursued without due consideration to these factors, integration could lead to mediocre outcomes in program performance or even supply chain disruptions if too much is integrated too fast. However, if attempted with

Often different from vaccines Often different from vaccines

carefully selected products at specific stages of the supply chain, such integration can greatly enhance both the effectiveness and efficiency of public health supply chains in resource-constrained environments. This paper proposes approaches to segment health products into groups with closely matched demand and supply side characteristics. It suggests that while the benefits of integration are higher at the upstream stages, there are also significant challenges associated with obtaining the necessary buy-in from policymakers and program managers across multiple agencies. Instead, it recommends trying integration further downstream at the ‘last mile’ of the supply chain—areas such as warehousing, transport and information systems. It is critical that supply chain integration be approached with care. Rather than attempting to integrate full systems, minor integration should start at specific stages along the supply chain first and move upstream from there. Similarly, a “one size fits all” approach to pursuing integration may not yield the best outcomes. Country context, geography, product portfolio, volumes and political economics may guide the best course of integration to pursue in a given country. Systematic collection of efficiency metrics in the vaccine supply chain is needed in order to conduct rigorous analysis of the benefits of integration. More operational research using simulation models and field experiments are also needed to better understand the benefits of vaccine supply chain integration. Critical analysis of the success and failures of ongoing attempts to integrate vaccines with other health commodity supply chains should be made part of a research agenda. The optimal design and management structure of an integrated supply system also requires further study. Q3

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