A Systemic approach to the Health Supply Chain Cycle

I am making the assumption that this relationship diagram has been created by an organization like ACT, Gates Foundation, USAID, PSPTB etc and is designed to govern the quality of both product and processes used by multiple suppliers and distributors to deliver their product to multiple destinations and users across the African continent.

The point of departure is with the originating organization in order to understand their guiding principles and beliefs. Do they currently follow a systemic approach, or are they rooted in the Linear world? If the latter, do they feel the need to change their approach? The best and most sustainable results will result from this platform.  When engaging with potential suppliers, distributors and in country service providers, the systems thinking philosophy needs to be discussed so that potential suppliers understand exactly what they are signing up for. A brief could also be included in tender documents as a guideline to the preferred operating model.

This isn’t something that can be forced on organizations, it is an approach that needs to be discussed and debated at the highest levels in an organization because there are fundamental differences between systemic and linear worlds. A good example of this is how we react when something goes wrong in our day today business. Do we interrogate the system to identify the cause of the problem, or do we identify the responsible person / organization and penalise them?

A cause of the error could be misalignment of policies or procedures that leads to a different interpretation of an instruction. In Linear organizations this happens all the time as a result of the Silo effect, interpretation depends on the perceptions, beliefs and mindsets of the personalities within the silos.

In the Systemic world, there is cross functional collaboration at all levels of the organization. This is led by the executive. The philosophy and culture within the organization is reflected by the way they communicate, interact and lead their individual teams. Systemic thinking focuses on creating systems that support the FLOW of relevant information and product through the organizations value chain.

In the linear world, we consider our value chain boundaries to be at the front gate. Everyone outside is considered an avenue to be exploited to the benefit of the organization. In the Systemic world, we include our suppliers, service providers and customers into our organization. We include them in our decision making and strategies. This approach changes the level thinking when looking at new ways to conduct business. An example here is buying protective garments for use in clinics and hospitals. The traditional methodology is that we place an order on a Supplier for anything up to 6 months stock. The Supplier manufactures and supplies these and they lie in various warehouses until we reach the reorder point and place the next order. No flexibility and working capital is tied up for long periods.

A Systemic solution would involve the supplier, discussing their process and constraints, leading to a possible win-win solution as follows. The Supplier dyes the bulk material to the correct colour, and holds this as their intermediate stock. The cutting and stitching steps can then be carried out in smaller batches and supplied in smaller volumes on a more frequent cycle.

The benefits from this different thinking are enormous, the Supply chain carries less stock, freeing up working capital for use elsewhere. The supply chain risk is reduced because of the smaller order quantity and value. The supplier can produce the garments in smaller batches, giving them the flexibility deal with other customer orders. It also improves their cash flow. The end users will be happier, because they will always have a range of sizes to choose from and they can adjust their order as their situations change.

Looking at the relationship diagram and considering my assumption. Achieving this means that cross functional teams would ultimately be formed to deal with each leg of the procurement and supply cycle. The teams would change in composition as we move through the cycle, promoting the FLOW of information for decision making and ultimately the FLOW of product through the supply chain to its point of use. There will always be a person that relays the information from group to group to ensure clarity and continuity through the stream. The QA and supply chain information repository that forms the core of the cycle becomes the repository for feedback, both positive and negative that is used in the ongoing drive for continuous improvement, supporting the quality of product and processes. Again, this team comprises of a cross section of the individual teams that make up the chain.

We have the tools available, such as this platform, or Zoom or Teams etc. that enable us to communicate face to face no matter where we are based in the world. We have also learned new approaches to business from the Covid-19 pandemic, so lets include these in discussions to improve the delivery of medicines and related products to wherever they are required, at the least possible risk.

In closing, imagine if we can extend our thinking and practices to include the circular economy, and reduce our contribution to the pollution pandemic at the same time. It is not a compromise, one or the other, it is open minded collaborative thinking that will generate the necessary solutions to challenges. All solutions are available, we just need to recognise them and use the opportunity they represent.

Should you have any questions or comments, please raise them in the comments section or email to dave@sacoaching.co.za. You can also call me on +27 82 777 0922.

About the author

Dave Hudson is a supply chain and operations specialist and executive coach with over 30 years’ experience, and currently 1 of 5 endorsed Demand Driven instructors on the African continent.

The relationship diagram is courtesy of Bosco Mapunda from PSPTB Tanzania