Supplier Diversification: The Secret to Cutting Cost and Increasing Access to Health Services

Sourcing from only one supplier is risky. If this supplier is unavailable, service disruptions ensue. Even if the interruption is only temporary, in pharmaceutical and biomedical device supply chains, the consequences can be severe, including death of patients. The intuitive solution is to procure from multiple sources. However, sourcing from multiple vendors typically results in higher purchasing cost as vendors lose economies of scale.

We developed a method and a tool relying on advanced analytics to compare the cost and the risks to disrupted health services, showing that supplier diversification can help a buyer reduce the overall cost in a supply chain and improve health service. We successfully implemented our method in multiple projects. For example, we presented sourcing strategies that balanced cost, lead time, and risk for a large procurer of biomedical devices and pharmaceuticals for low- and middle-income countries.

New Strategies to Procure Transportation Capacity Cut Response Times and Save Lives

Disaster response network operators seek to support people in distress in the aftermath of a disaster. The initial response to a sudden onset event must be swift. But procuring transportation capacity in the turmoil after an adverse event is difficult. Our client advised two of the largest response network operators worldwide to determine opportunities to become more responsive and save lives.

We were asked to develop recommendations for alternative operational strategies. We evaluated the transportation market and conducted analyses to develop new approaches to transportation procurement. Our work reduced the response time by up to 30% and led operators to employ new strategies to contract transportation capacity.

A Data-Driven Advocacy Tool Contributes to Raising $100s of Millions for Medical Oxygen

Medical oxygen was crucial to save the lives of thousands of severely ill COVID-19 patients. But oxygen was not available in many African and Southeast Asian countries. Our client wanted to developed a data-driven advocacy tool to highlight the need and the severe funding gap for medical oxygen during the COVID-19 pandemic.

We created a calculation method and supported the implementation of a tool that dynamically calculated the oxygen need for COVID-19 patients and the required funding to fill the gap. The tool contributed to hundreds of millions of dollars raised in funding for oxygen, and was cited by various institutions such as the WHO and in many newspaper publications such as The New York Times.

Big Data and Analytics Help Ministries of Health to Allocate Scarce Resources and Make Effective Infrastructure Investment Decision for Essential Medicines

Several Ministries of Health in African and Southeast Asian countries planned to invest in production, storage, and delivery systems for an essential medicine. We advised our client on effective resource allocation and an appropriate mix of different infrastructure options.

Using big data and models, we showed where to locate the appropriately sized production, storage, and delivery infrastructure within the existing network in different countries.

Our results showed that costs can be reduced by 25-50%, lead times can be reduced by 20-60%, and access to the medicine in rural regions can increase from less than 10% to 70-95%.

Balancing Risks and Benefits: Local Manufacturing in Africa Can Cut Costs and Transportation Times

Local manufacturing can have various benefits. Production moves closer to demand, reducing lead times and improving planning accuracy. It contributes to value creation in the region and advances societies. However, local manufacturing also introduces various risks.

Our client was advising a large buyer of pharmaceuticals and biomedical devices for low- and middle-income countries, and asked us to develop a methodology that allows to quantify the impact of buying product from local manufacturers or store product in regional warehouses. Our analysis shows how regional manufacturing can diversify the supply base by reducing lead times, reducing carbon emissions, diversifying supply risks, and improve access to health care.

With our approach we were able to empower decision-makers to evaluate the price premium they pay to benefit from regional manufacturing, and also quantify the potential savings they can expect in the future when local manufacturing scales.

Supply Chain Analyses Reveal the Real Cost and Time to Transport Critical Global Health Products to Low- and Middle-Income Countries

In the turmoil of the pandemic, transportation capacity became a constraint, delaying shipments of pharmaceuticals, biomedical devices, test kits, personal protection equipment, and other critical items to respond to COVID-19. At the same time, transportation cost skyrocketed.

Our client advised a procurer of pharmaceutical products in an evaluation of their transportation network. We conducted an analysis of transportation time and cost. The analysis revealed the substantial variability in transportation time before, during and after COVID-19, how cost in different transportation modes varied, and how various transportation routes were impacted in different ways. We were also able to disentangle the effects of production time, booking time, and actual shipping time.

The results shaped how the procurer strategically chose future vendors and diversifies their supply network to reduce future impact of transportation disruptions.