Further, President Biden has now promised to deliver enough doses to fully vaccinate all 257 million adults by the end of May. Yet, there are significant challenges with meeting this target. In addition to constraints on the manufacturing capacity of vaccine providers Moderna, Pfizer-BioNtech, and new entrant Johnson & Johnson, the logistical constraints of the distribution networks present what is perhaps an even greater set of challenges. Logistics and distribution networks are being put to the test to deliver at high volumes, reliably, and with tight degrees of control. As networks are pushed to overcome significant challenges and meet high demand, even under such extreme circumstances, there are sure to be lasting effects on the way distribution networks operate in the future.
Vaccine distribution is largely being taken on by logistical giants UPS and FedEx, who are regularly engaged to distribute sensitive vaccines and medical supplies. These providers have been able to leverage centralized “command center”-style approaches to distribution, including 24/7 monitoring and live shipment interceptions for unplanned events. However, broader engagement from the private sector has been critical to speedier distribution. Commercial airlines, including United, American Airlines, and Delta, have provided distribution in underutilized cargo space on passenger flights. At the same time, CVS and Walgreens are acting as hubs for vaccine storage and handling, from which last-mile delivery is planned. Where logistical infrastructure is lacking in remote regions abroad, high-tech distribution solutions like drone transportation are being leveraged. Using a combination of these distribution methods, Pfizer has been able to achieve one to two-day service to the final point of use (POU). All of this sets the stage for higher customer expectations and the need for creative solutions to deliver products efficiently and quickly.
Another critical element of distribution is linked to real-time shipment monitoring. During transport, an array of sensors, probes, and heat-sensitive labels are used to track shipment temperatures and assess vaccine viability when each shipment reaches its destination. Temptime, a subsidiary of Zebra Technologies Corp., has developed temperature-monitoring labels that change color if they are exposed to heat. Other companies like FourKites Inc. leverage freight-tracking software to provide real-time temperature information to carriers tracking shipment condition. Real-time tracking has proven essential for the effective distribution of vaccines, and we can expect this technology to penetrate the broader market to meet heightened customer expectations around shipment visibility.
The critical necessity of rapid and prolific vaccine dissemination is pushing distribution networks past current limitations. One legacy of this global pandemic will be that to remain relevant, supply chains will need to continue to evolve to meet increasing consumer demands of shortened lead times, heightened shipment traceability, and efficient last mile delivery. For industries beyond pharmaceutical, this means pushing the envelope on customer-perceived availability by:
- Leveraging increasingly sophisticated forecasting tools
- Shortening lead times through improved service levels and same day delivery programs
- Providing reliable and consistent delivery times
- Giving the customer access to “track and trace” tools that can provide real-time status updates
- Ensuring the highest shipment quality and avoiding damage
Ultimately, the adaptation of distribution networks to meet the demands of COVID-19 vaccine distribution will have knock-on, lasting effects on distribution networks of the future.
Sources: Pfizer, Washington Post, Politico, Wall Street Journal, CNBC, NPR, Reuters, The New York Times, Financial Times