Insights

A New Priority: Readying the Strategic National Stockpile

September 29, 2021

LMI Staff

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Healthcare Supply Chain Management

At the onset of the pandemic, the nation became aware of a resource few had previously heard of: The Strategic National Stockpile (SNS). The SNS holds medical supplies and equipment for state and local governments to tap during public health emergencies. To the public, the SNS appeared to be well-positioned to respond to an emergency like COVID-19. However, the early stages of the pandemic revealed some significant response gaps. For instance, neither states nor the federal government had sufficient visibility into each other’s stockpiles or supply chains, novel pandemic scenarios were inadequately analyzed and prepared for, and the initial response to the pandemic was not managed in a way that maximized collaboration and resources.

The Department of Health and Human Services (HHS) responded as best they could to fulfill a mission they weren’t designed to manage at such scale. Going forward, the lessons HHS learned during the pandemic provide a roadmap for creating an SNS that is positioned to handle novel threats, rather than optimizing for emergencies that have already passed.

Build Strategic Visibility Into National Stockpiles and Supply Chains

At the start of the pandemic, neither the federal government nor states had clear visibility into the supplies that were needed or available to respond to the pandemic. Data for personal protective equipment (PPE), ventilators, and ICU beds were incomplete. When it became clear that there were significant shortages of new essentials and that pandemic-related factory closures would make it difficult to produce more supplies, the federal government stepped in, using its significant purchasing power to attempt to clear some of the backlogs. The office of the Assistant Secretary for Preparedness and Response (ASPR) used its COVID-19 supply chain control tower to create situational awareness to maximize the effectiveness of the national supply chain, enhance resource visibility, and facilitate information sharing. The move to centralize supply chain data helped streamline efforts to address the shortages, but more work in this area is needed.

“What we saw during the pandemic is that the global nature of the emergency tested some of the underlying assumptions for stocking the SNS in a crisis,” explains Matt Peterson, principal, supply chain solutions at LMI. “If the private sector is shut down everywhere, that significantly impacts the ability to get supplies quickly. It takes an extremely long time to backfill and try to catch up, if you even can, in the midst of the crisis,” he adds. “You have to think of visibility and the end-to-end the supply chain strategically. Pandemics stress supply chains in atypical ways. If you only have a week’s worth of supplies on hand right now, which strategies, such as stockpiling raw materials or leveraging innovative processes, will enable the system to keep up during a pandemic? That takes significant advanced planning.”

According to Peterson, this planning can include data modeling to ascertain potential inventory requirements and working with the private sector to identify producers and alternative sources of critical supplies. Such modeling should strive to include end-to-end visibility from the supplier’s suppliers to the customer’s customers. Within the federal government, building strategic visibility also means coordinating with state governments to understand what they already have available, where the gaps are, and how the gaps might be filled by states and the federal government during a shortage. This can be achieved via a system that allows for centralized access to data.

Take a Scenario-Based Approach to Projecting Stockpiling Requirements

We have no way of knowing what the next pandemic or the next bioterrorism threat might look like. Expanding the SNS to make sure that more PPE is readily available is a good start, but it is not a sufficient long-term solution. New problems may require other types of supplies, medicine, and capabilities.

As the healthcare system learned more about what it would need to respond to COVID-19, HHS and ASPR were able to use scenario analysis to improve supply distribution. Going forward, more scenario analysis and data hedging should be used to create a more comprehensive plan for the SNS.

“There is a significant role for logisticians to play in helping stakeholders understand what they need to have on hand, as well as how to manage stocks to make sure that products aren’t expiring or falling out of service,” says Dr. Brandon Greenberg, a fellow in resilience and logistics planning and optimization at LMI.

The filters in masks eventually expire. Successful vaccine campaigns require medicine as well as all of the components of a vaccine, from glass vials to syringes. Critical components, like swabs used for testing, can be surprisingly hard to come by on short notice. Scenario analysis can help stakeholders understand situational requirements and cascading or interdependent inventory requirements and determine how to create agreements with private sector suppliers for emergency production if necessary.

“It’s not just components,” Greenberg adds. “The government will need to stockpile some commodity items, such as raw materials, so there are materials available to produce everything necessary to respond to a crisis.”

Include Stockpiles in Resilience Planning at All Levels of Government

The decentralized nature of medical supply chains makes it difficult for a project like the SNS to reach its full potential without clear coordination across all levels of government. During the first wave of the pandemic, states were competing against each other to purchase supplies. Some of the larger cities and hospital systems were in the mix as well. The federal government should coordinate with all of these stakeholders to create localized stockpiles.

“More cities and states are working on resilience planning, and there is a role for stockpiling in those efforts,” says Lee Thompson, senior consultant at LMI. “If we begin to think about stockpiling as a strategic effort tied to resilience, that can shift how these programs are maintained so that you avoid common traps like losing momentum during periods without an active crisis.”

Resilience planning requires stakeholders to identify the needs of cities, states, and the federal government in the face of myriad threats. A resilient stockpile includes plans to cycle products out before they reach expiration if they haven’t been used and considers a wider scope of interdependence and potential use cases for supplies, whether that be a pandemic, climate, or natural-disaster response. Further, even if global pandemics are infrequent, an effective resilience plan considers other emergent threats and a more consistent state of readiness. Doing so can effectively keep funding and supply-chain agreements in place even if there is a significant interlude between crises.

LMI has a 60-year history of providing innovative, analytically based solutions to government logistics challenges, including using dynamic, risk-based models to optimize inventory and supply. We work at the intersection of science, policy, logistics, and analytics to facilitate innovation in healthcare provision and payment, implement federal healthcare priorities, advance health security, and optimize service delivery and program effectiveness.

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