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Logistics and COVID-19 crisis. Helena Ramalhinho-Lourenço

Logistics and COVID-19 crisis. Helena Ramalhinho-Lourenço

Helena Ramalhinho-Lourenço, full professor at the UPF Department of Economics and Business and head of the Business Analytics Research Group (BARG).

08.04.2020

 

In the actual situation of the Coovid-19 crisis it is important to focus on the Healthcare of the general population, and in particular of the patients at the hospitals, and also on the support of all medical and any supporting personal to overcome this situation. However, this crisis can teach to all of us many lessons. One of the lessons I would like to talk about today is the role of the Logistics field, in particular the Healthcare Logistics, in a pandemic situation.

Taking a quick look at the media we find many articles that refer to the logistics related activities to help to overcome the current situation. Next, a few examples of these articles:

  • “Por qué España está sin mascarillas cuando lo peor de la crisis no ha llegado”, El País[1]
  • “Llega de China el avión militar que trae un millón de test rápidos de coronavirus”, El País[2]
  • “At War With No Ammo’: Doctors Say Shortage of Protective Gear Is Dire” New York Times[3]
  • “South Korea Grapples With Mask Shortage Amid COVID-19 Outbreak. The government is taking steps to further control the supply and distribution of masks, but is it too little, too late?”, The Diplomat[4]
  • “Coronavirus fears lead to worldwide mask shortages”, CNN[5]
  • “China-Europe Rail Is Set To Boom As COVID-19 Chokes Air, Sea And Road Transport”, Forbes[6]

We cannot discuss the very crucial importance of the medical personnel in a crisis like the actual one, but also, we cannot forget the role of the Logistics and Supply Chain Management. The NGO medical organizations are well aware of how the logistics activities can help and be essential to support and help the doctors and nurses to do well their jobs.

"A doctor isn't much good to anyone in the middle of the desert if she doesn't have her medicines delivered at the right time and place, at the right temperature. Without logistical support, MSF wouldn't be able to work with the speed and efficiency that we do."

Chris Houston, MSF LOGISTICIAN[7]

But what is Logistics? And What is Supply Chain Management? This is a question that I frequently receive, and I have to explain to my students in the Logistics course at Universitat Pompeu Fabra.

The Council of Supply Chain Management Professionals (CSCMP) defines Logistics Management as follows: “Logistics Management is that part of SCM that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption to meet customers' requirements”, and Supply Chain Management as “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies”[8]

Logistics is a functional area of business which has as objective to provide goods or services to the customer according to their needs and requirements. Supply Chain Management (SCM) is a broader area that includes the coordination and integration of processes and activities with and across other functional areas as marketing, sales, production, research and development, finance, information technology etc., including providers and customers on the supply network.

The logistics and SCM include several activities from source management, transportation management, inventory management, warehouse management, fleet management, materials handling, order picking and fulfillment, logistics network design, etc. The applications of Logistics arise in many different industries, from the manufacturing, retailing to healthcare and NGO.  But what areas of Logistics field are relevant in the Covid-19 crisis?

In global, the Healthcare Logistics, the Humanitarian Logistics and the Emergency Logistics are the areas that should be fundamental to the actual situation. All of these areas have been widely studied by researchers and have a large list of successful applications.

In short, Healthcare Logistics refers to the logistics of the people, products, equipment, material etc. need by the medical personnel to perform their services.  This can include many aspects as: drugs distribution, pharmaceuticals inventory management, patient transportation, management of surgical tools and equipment, food distribution, medical personnel scheduling, blood sample collection, home healthcare activities, etc. As in many other services industries, as for example airline transportation, the logistics activities need to be done efficiently to be able to provide a high-quality service within a reasonable cost. For example, (Moons, Waeyenbergh, & Pintelon, 2019) mention that “The medical supply costs constitute the second largest expenditure in hospitals, after personnel costs”. Therefore, any medical manager should learn about the logistics field and be able to understand the role of the logistics in healthcare, not only when there is a crisis but in every situation.

“The basic task of humanitarian logistics comprises acquiring and delivering requested supplies and services, at the places and times they are needed, whilst ensuring best value for money. In the immediate aftermath of any disaster, these supplies include items that are vital for survival, such as food, water, temporary shelter and medicine, among others.”[9]

The Humanitarian and Emergency Logistics are also well-known areas of logistics. The Humanitarian and Emergency Logistics consist in all need logistics activities to help in an humanity operations in case of a natural disaster (as for example earthquake, hurricanes, etc.), destructive actions (like industrial accidents, terrorist attacks, etc.), crisis (as for example medical, political, refugee, etc.) among others. The role of the logistics in general is to provide services and products like water, food, shelter, medicines, search and rescue, restoring life situation, among others, for more details see (Daud et al., 2016)(Rodríguez-Espíndola, Albores, & Brewster, 2018). NGOs organizations, like MSF (Doctors Without Borders[10]), Department of the International Federation of Red Cross and Red Crescent Societies (IFRC)[11]  or Oxfam International[12], are experts in this type of logistics, and today they are helping around the world, including Europe and Spain to overcome the Covid-19 crisis.

“As an emergency humanitarian organization, MSF provides medical assistance to vulnerable people in a moment of crisis and societal disruption. Today, in Europe some of the most advanced health systems in the world are buckling under the pressure of the COVID-19 pandemic. Responding to epidemics is at the core of what we do – intervening when the system is overrun and where we can put our expertise in managing emergencies to good use.”[13]

Many organizations around the world are working on improving the activities in Healthcare,  Humanitarian and Emergency Logistics, as for example the Humanitarian Logistics Association[14], an international association for humanitarian logistics professionals and organizations, contribute to the logistics support in global emergencies; The Center for Health and Humanitarian Systems (CHHS) at Georgia Tech is developing state-of-the-art tools and methodologies to help decision makers to make the better and more efficient decisions of health and humanitarian systems[15]; The International Association of Public Health Logisticians, established in 2007, has as objectives to promote the professionalization of the field of public health logistics through education and information sharing[16].

But our days we can also see many applications of the Military Logistics. Military logistics is the discipline of planning and carrying out the movement, supply, and maintenance of military forces. The Military and Army are well training in Logistics, so in emergency, crisis or conflict situations, they usually perform well because they have well prepared contingency plans and good training.

Another relevant aspect of the Healthcare Logistics is the Resilience and Risk Analysis in the Logistics Network. Uncertainty is a common issue in health care, how to deal with this uncertainty and associated risk is a central issue in healthcare logistics. There are many studies about Risk Management in Logistics and SCM, (Ivanov, Reddy, Rao, & Krishnanand, 2019) (Kaur & Singh, 2019). The resilient supply chain is more important than never, in 2004 (Christopher & Peck, 2004) already said “In today’s uncertain and turbulent markets, supply chain vulnerability has become an issue of significance for many companies. As supply chains become more complex as a result of global sourcing and the continued trend to ‘leaning-down’, supply chain risk increases. The challenge to business today is to manage and mitigate that risk through creating more resilient supply chains”. This can be certainly applied to the actual covid-19 situation and many lessons can be learned and applied to Healthcare.

As in the general logistics field, the development of state-of-the-art techniques and methodologies to solve logistics problems in the field of Healthcare are of great need to developpe an efficient logistic. The research community is already working in solving these problems, that even   if they can look similar to retailing or manufacturing logistics, they present very different aspects, basically because we are dealing with people… patients and medical personnel. So, there is the need to have a specific research line on in the area of logistics. Healthcare Logistics and Supply Chain as well as Healthcare Operations Management is already in our days an important field of research and it will continue to grow. See for example (Rais & Viana, 2010)(Fikar & Hirsch, 2017)(Copenhaver, Hu, Levi, Safavi, & Zenteno Langle, 2019)(Dai & Tayur, 2019)(Johnson, Midgley, & Chichirau, 2018). Maybe there will be a follow up article on the lines of research on the topic: Analytics applied to Healthcare Logistics… The areas of Operations Research, Simulation and Analytics can make a great impact on improving the efficiency and quality of the Healthcare logistics activities by helping the healthcare managers to make better decisions as they already helped in the past and continue to help the retailing and manufacturing industry, (Besiou, Pedraza-Martinez, & Van Wassenhove, 2018). All this is well documented in the literature.

The Business Analytics Research Group has some experience in Healthcare Logistics, with a few publications in the field, (Alex Grasas et al., 2014)(A Grasas, Pereira, Bosch, Ortiz, & Puig, 2015)(Silva & Serra, 2008)(Galvani, Ramalhinho, & Malucelli, 2016)(de Armas, Lalla-Ruiz, & Moreno-Vega, 2017).  The group is also starting this year several large research projects in the area. The Business Analytics Research Group received funds and it is actually working on the project "Logistics Optimization of the Home Health Care and Social Services". The main objectives of the project are to extend mathematical models and algorithms from Operations Research and Analytics, successfully applied to different industries, to the Healthcare Logistics area by incorporating the particularities of this sector: the human factor, the risk and variability. The main goal is to help healthcare managers to make better decisions and generate a positive impact in the patients, citizens, medical personal and the society in general. This project is supported by the Ministry of Science, Innovation and Universities of the Government of Spain (Ministerio de Ciencia, Innovación y Universidades (MCIU), Agencia Estatal de Investigación (AEI), Fondo Europeo de Desarrollo Regional (FEDER)) (RTI2018-095197-B-I00). They will also apply to an Industrial PhD funding in collaboration with the Barcelona City Council, Better Care and Parc de Salut Mar (PSMAR) on topics of Healthcare Logistics. This is an ongoing work, and due the current situation we are more motivated than never to do our best on developing tools that can be useful tor the society. We are also aware that many other similar research groups in Europe are contributing to improve the situation, and we are collaborating with some of them.

We can draw many conclusions and lessons from the actual situation… With respect to the Logistics area, and in particular to the Healthcare Logistics, we, and the society in general, must be aware how important is the logistics in a crisis situation and therefore needs to be given more attention in the future. There is the need to have mitigate and crisis plans and proposals to how to act in a crisis; these plans need to be prepared before the crisis so they can to put in practice in case a critical event happens. There is the need to have technology, data and methodologies to evaluate the situation and propose efficient and realistic solutions to the logistics problems arising in healthcare in case of a crisis, or even in normal situation. The researchers can design and develop these tools and methodologies to help and support healthcare managers to make good decisions or even to evaluate different scenarios. There is already some literature in the area, we need to pay attention to these works and apply some of the recommendations. This crisis also provides new problems that need to be address in the future. Therefore, there is the need to extend and support the research in the areas of Healthcare Logistics, the Humanitarian Logistics and the Emergency Logistics. Also, in terms of teaching, the universities will need to add more courses in Logistics, not only in the Management and Engineering programs, but also in Healthcare programs so all professionals understand the role of the logistics and know the state-of-the-art methods that can be applied to provide more efficient logistics solutions in a pandemic crisis.

References

Besiou, M., Pedraza-Martinez, A. J., & Van Wassenhove, L. N. (2018). OR applied to humanitarian operations. European Journal of Operational Research269(2), 397–405. https://doi.org/10.1016/j.ejor.2018.02.046

Christopher, M., & Peck, H. (2004). Building the resilient supply chain. International Journal of Logistics Management15(2), 1–13.

Copenhaver, M. S., Hu, M., Levi, R., Safavi, K., & Zenteno Langle, A. C. (2019). Health System Innovation: Analytics in Action. Operations Research & Management Science in the Age of Analytics, (October), 238–266. https://doi.org/10.1287/educ.2019.0202

Dai, T., & Tayur, S. (2019). Healthcare Operations Management: A Snapshot of Emerging Research. Manufacturing & Service Operations Management, 1–37. https://doi.org/10.1287/msom.2019.0778

Daud, M. S. M., Hussein, M. Z. S. M., Nasir, M. E., Abdullah, R., Kassim, R., Suliman, M. S., & Saludin, M. R. (2016). Humanitarian logistics and its challenges: The literature review. International Journal of Supply Chain Management5(3), 107–110.

de Armas, J., Lalla-Ruiz, E., & Moreno-Vega, J. M. (2017). Dynamic Ambulance Routing for Disaster Response. In A. D. B, C. W. Wilczak, P. Hahn, M. Hofmann, & U. M. Borghoff (Eds.), Computer Aided Systems Theory – EUROCAST 2017 (Vol. 10671, pp. 314–321). https://doi.org/10.1007/978-3-319-74727-9

Fikar, C., & Hirsch, P. (2017). Home health care routing and scheduling: A review. Computers and Operations Research77, 86–95. https://doi.org/10.1016/j.cor.2016.07.019

Galvani, M., Ramalhinho, H., & Malucelli, F. (2016). Solving a Home Health Care Routing Problem through Iterated Local Search : the real case of Ferrara. In Proceeding of the XI Congreso Español de Metaheurísticas, Algoritmos Evolutivos y Bioinspirados (MAEB 2016).

Grasas, A, Pereira, A., Bosch, M.-A., Ortiz, P., & Puig, L. (2015). Feasibility of reducing the maximum shelf life of red blood cells stored in additive solution: a dynamic simulation study involving a large regional blood system. Vox Sanguinis108(3), 233—242. https://doi.org/10.1111/vox.12224

Grasas, Alex, Ramalhinho, H., Pessoa, L. S., Resende, M. G., Caballé, I., & Barba, N. (2014). On the improvement of blood sample collection at clinical laboratories. BMC Health Services Research14(1), 12. https://doi.org/10.1186/1472-6963-14-12

Ivanov, D., Reddy, K. J. M., Rao, A. N., & Krishnanand, L. (2019). Supply Chain Risk Management and Resilience. In Global Supply Chain and Operations Management (pp. 455–480). Springer, Cham. https://doi.org/10.1007/978-3-319-94313-8

Johnson, M. P., Midgley, G., & Chichirau, G. (2018). Emerging trends and new frontiers in community operational research. European Journal of Operational Research268(3), 1178–1191. https://doi.org/10.1016/j.ejor.2017.11.032

Kaur, H., & Singh, S. P. (2019). Sustainable procurement and logistics for disaster resilient supply chain. Annals of Operations Research283(1–2), 309–354. https://doi.org/10.1007/s10479-016-2374-2

Moons, K., Waeyenbergh, G., & Pintelon, L. (2019). Measuring the logistics performance of internal hospital supply chains – A literature study. Omega (United Kingdom)82, 205–217. https://doi.org/10.1016/j.omega.2018.01.007

Rais, A., & Viana, A. (2010). Operations Research in Healthcare: a survey. International Transactions in Operational Research18(1), 1–31. https://doi.org/10.1111/j.1475-3995.2010.00767.x

Rodríguez-Espíndola, O., Albores, P., & Brewster, C. (2018). Disaster preparedness in humanitarian logistics: A collaborative approach for resource management in floods. European Journal of Operational Research264(3), 978–993. https://doi.org/10.1016/j.ejor.2017.01.021

Silva, F., & Serra, D. (2008). Locating emergency services with different priorities: the priority queuing covering location problem. Journal of the Operational Research Society59(9), 1229–1238. https://doi.org/10.1057/palgrave.jors.2602473


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