Friday, January 4, 2013

Have you gotten your Flu shot yet?

By Ken Boyer, Fisher College of Business, Ohio State University, Boyer.9@osu.edu
Amidst the public debate these days about whether or not individuals should get shots for either the regular, seasonal flu or for H1N1, there is another challenge.  That is, if you do want to get a shot, where and how can you get one?  This is not a trivial question as there have been numerous delays and canceled clinics around the U.S. in the past two weeks.
What does this have to do with operations and supply chain management?  Several things.
First, manufacturing and distribution of vaccine dosages is a substantial supply chain challenge.  The U.S. Centers for Disease Control and Prevention (CDC) had hoped to have 40 million doses of the H1N1 vaccine ready by the end of October, but there were numerous manufacturing delays.  As of October 30, Dr. Thomas R. Friedan of the CDC stated that there were 26.6 million doses available, up from only 10 million a week prior to that.
Manufacturing flu vaccine is a challenge – each dose must be grown in a chicken egg and carefully handled and harvested to avoid any contamination.  The yield of antigen is unpredictable, making it difficult to forecast how much to produce.  In addition, production must start several months before doses can be administered.  Another challenge is that the revenue is relatively small for a complicated product.  In short, vaccine production is a complicated process, that must be started months ahead of need and the revenue and yield is very unpredictable.

Once the vaccine is produced, then there is the distribution challenge.  The CDC must ship the vaccine to numerous hospitals, clinics, doctor’s offices and pharmacies.  In the current situation, many if not most of these organizations want more doses than are available.  Thus, doses must be allocated and some potential patients will be left without.  Once vaccine is actually delivered to a clinic, it must be administered as efficiently as possible.  In short, the distribution of vaccine is one giant application of the newsvendor problem  (see pages 222-223 of textbook).  In the current case, there seem to be more stockouts than excesses. 

Discussion questions:

  • ·        How does vaccine distribution relate to key operations and supply chain management questions including: quality management, new product development, forecasting and project management?

  • ·        Could more vaccine be made available if the government or patients simply paid more money for it?  What are the pluses and minuses of producing extra at an increased cost?

  1. ·        How should the government and producers balance safety – i.e. carefully assessing the vaccine so that few unintended consequences occur – versus speed of getting the vaccine to patients?

6 comments:

  1. ----Vaccine distribution must do a very good job sustaining quality management because all of the vaccines need to be very consistent, especially since vaccines are a very fragile and potentially dangerous product. Because if not, some of the vaccines may not prevent one from the flu or even worse, many people could receive severe side effects from taking the vaccine. Also product development is key to keeping these vaccines on top of the medical market because the medical field is constantly changing and new kinds of vaccines and amounts of vaccines are needed.
    ------I believe there could be much more vaccines available if the government or patients simply paid more for them. Obviously, producing more would bring more costs to the company and make logistics/production more difficult/complex. But, such an increase in production allows you to sell them at a higher price and therefore bring in higher profits.
    -------The government and producers should really put an emphasis on keeping a higher priority on safety over the speed of getting the vaccine to patients because with a product as potentially dangerous as a vaccine, all the safety in the world must be taken into account.

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  2. 1) Vaccine distribution relates to quality management because they have to make sure that the product is made in a certain way. The blog described how they have to be grown inside a chicken egg individually. Not only that, they also have to be made perfectly each time because if one thing was wrong with the dose, it could have harmful effects to the patient. This also goes towards the forecasting aspect because scientists need to predict how many doses will be needed several months prior to flu season. This takes a lot of research in itself. Scientists also need to perform the correct research to figure out what strains will be needed/which ones will be more prevalent. New product development of vaccines occurs every year because the strain of the flu virus is changing every year so new vaccines need to constantly be created.

    2) I think that more vaccine would be available if the government or patients paid more for them. This money would fund the production of more vaccines and rake in more profit for the companies as well. However, a downside to this would be that since patients have to pay more, there may be less willing to take the vaccine so producing extra might actually have a reverse effect in that yes there will be more available, but there will also be less patients willing to pay that high of an amount.

    3) i think there should be technology involved in creating the vaccine so that it becomes something like a continuous flow process. This way it would be more uniform to each vaccine. However, at the end there should definitely be the correct tests run on each individual dose created so that there are no consequences that occur. This way the production will be fast and there will also be less risk.

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  3. 1. Vaccine distribution need special ways to keep the quality and safety in transit and in storage because any change of the vaccine may cause adverse effects on the patients. The scientists also need to research new vaccines to deal with the development of the virus and make the vaccine more effective. Vaccine distribution also need to work on how many doses they need to product each time in different environment situations and how much the price of vaccine should be to keep the costumers willing to buy.
    2. If the government or patients paid more, there could be more vaccine available. The disadvantage is that there would be less people willing to pay for the vaccine, which disobeys the propose to design the vaccine. The advantage is that the stock out would seldom happen so that there would always be vaccine when anyone need.
    3. I think the government and the producer should consider the safety of the vaccine first. Find the efficient vaccine first then find the way to produce and delivery faster to the customers.

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  4. 1. Quality control is obviously very important for vaccine distribution to ensure the safety of the people who are getting the vaccines. Forecasting and new project managing is more of a challenge because it is a complicated process to make these vaccines and the yield can not always be accurately predicted so yields can very greatly.

    2. Im sure that if the government would invest in this as well as the patients the vaccines would continue to get better for the obvious reason of having more money for research and supplies. The minus is that charging more money for the vaccine could limit who gets them and people who could not afford these would be more susceptible to get the flu.

    3. I think safety needs to be the number one concern over speed. It won't matter how fast the vaccines gets there if its not safe to use.

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  5. 1. Quality should be the main concern in the development of a product as fragile as a vaccine. If there is even the slightest of things wrong with one dose, it has the potential to kill someone. Part of the low revenue issue mentioned in the blog could be addressed with the implementation of a more effective forecasting plan in order to minimize stockouts or excesses. For a global product that concerns the health of hundreds of millions of people, the very best of project managers should be appointed to oversee all aspects of such a project.

    2. Simply put, yes. Customers will have to pay more for their product if the production cost rises. However, a pro would be that it could potentially limit the shortages for flu seasons such as this current one. It is difficult to put a price on quality health care, I doubt many would mind shelling out a few extra bucks for a more efficient system for the manufacturing and delivery of vaccines.

    3. Safety should absolutely be number one. Speed means nothing if the quality of your product is not up to par. If I could cut my wait time in half for a piece of meat at a nice restaurant I would do it. BUT, if that also meant the meat was significantly worse tasting or could potentially make me sick from eating it, I would 100% rather wait. For something as sensitive as a vaccine, a significant majority would favor safety over speed.

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  6. 1.The manufacturing of the vaccine required high quality management. Because the consequence of low quality injection would be fatal to the patience. During the process, even the slightest contamination could take away a human life, leading the public stopped taking the shots and spreading panic. Thus the control of quality was significant to the entire vaccine manufacturing chain.

    2. Personally I agree that increasing the cost of vaccine is helpful to produce more available vaccine. Because higher profits could draw more manufacturers into the production to obtain more benefits. Therefore the supply would increase by larger area of production. However, the extra cost could not guarantee the quality. It is possible that some producers would seek only higher profits by reducing the complicated steps of vaccine production. Also the higher cost could cause some lower income families choose not to get vaccine.

    3. Safety should always be the priority concern in production. If the public started to lose confidence in the vaccine quality, the demand would decrease in a much higher speed than the speed of production.

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