Researchers Explore Simulations to Improve Health Supply Chains

Tuesday, July 12, 2016

In many emerging market countries, particularly in sub-Saharan Africa, the government’s ministry of health traditionally defines how public health systems – as well as the supply chains that stock them – function for doctors, hospitals, pharmacies and patients. However, many countries are rethinking this structure, and are interested in streamlining their health supply chains to achieve better performance and cost efficiency.

Two research associates with WDI’s Healthcare Research Initiative presented preliminary findings from a project utilizing simulation software to test out supply chain designs for essential health commodities in Nigeria.

Michael Krautmann and Beatrix Balogh presented the project results at SummerCon 2016, a supply-chain-focused conference hosted by LLamasoft, an Ann Arbor-based software firm specializing in supply chain simulation and optimization. Krautmann and Balogh used software LLamasoft developed for the project, which potentially could have applications elsewhere in sub-Saharan Africa.

Watch their presentation below.

The WDI project was funded by the Bill & Melinda Gates Foundation with a goal to develop tools and approaches for countries – and donor agencies supporting those countries – to help improve and facilitate the supply chain design process.

The lack of data infrastructure is among the biggest challenges emerging market supply chains face; many still operate using paper order forms, which contributes to confusion about how products flow through the system. This lack of understanding contributes to multiple health systems and funding mechanisms operating independently of one another, resulting in redundant and inefficient management processes. Subsequently, innovations, resources, and data from one group might not always get shared universally.

Few tools are available to work past these issues and give evidence-based results on how different supply chain models would affect a health system, Krautmann said. Conducting a pilot study is one possibility, but many are costly and often conditions change rapidly – nullifying most of the findings. One promising possibility is using software modeling to capture the behaviors of different supply chain structures and different supply chain channels, Krautmann said.

“Using simulation software we are able to rapidly adjust these models in an artificial environment, both to optimize and compare different designs in a particular country context, and to see how those designs respond to changes in demand and in geography,” he said.

Balogh said she and Krautmann were at a point in their work where they could present some initial analysis. While encouraged about the potential of software modeling, one challenge with any software is trying to emulate the human element present in supply chains.

“Global health supply chains involve factors in human error which leads to process variability” she said. “Most software models don’t natively account for that.”

Photo Credit: SIM USA, via Flickr

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