It has been a long year for businesses and communities across Southeast Asia. But after 12 months of pandemic-related challenges, vaccines now offer a welcome ray of hope on the horizon.
With the remarkable efforts of the scientific community to develop not one, but multiple viable vaccines against Covid-19, efforts now turn to the essential supply chain infrastructure that is fundamental to a successful vaccine roll-out.
Vaccination supply chains are by their nature a complex beast. They require complicated but seamless interconnectivity between manufacturing, logistics and health infrastructure.
This complexity gives rise to many challenges, stirring fears that the next great global hurdle in overcoming the pandemic is not science, but supply chain logistics. Surmounting these obstacles is crucial to ensure that businesses and communities can once again resume operations.
In order to understand this global challenge, Boston Consulting Group (BCG) partnered with leading logistics company Kuehne+Nagel to analyse the robustness of global vaccine supply chains.
Our findings reveal a reassuring look at the infrastructure for distributing Covid-19 vaccines around the world.
Complex logistics for complex solutions
Supply chain considerations invariably differ across Southeast Asia. Vaccine roll-out in a compact nation like Singapore will be self-evidently different than distribution across a dispersed population over the thousands of islands of Indonesia or the Philippines.
Due to its supply chain infrastructure and compact nature, Singapore is better placed to deploy vaccines compared to its regional peers. The country plans to establish around 40 vaccination centres and 10 mobile teams dedicated to Covid-19 vaccine distribution by the end of April, leveraging the 20-strong polyclinic network and selected GP practices
Given its hub status, Singapore is also looking at the possibility of being a regional distributor — and playing a role in filling vials and packaging the vaccine for final distribution.
There are now a dozen vaccines approved for use in various countries, each with their own recommendations for supply chain and distribution. These varied supply chain conditions, compounded by considerations around the differing efficacy of each vaccine, will add to complexity for decision-makers in planning and managing a vaccine roll-out.
Manufacturing represents the first hurdle. Engaging the manufacturing capacity to inoculate the global adult population is no small task. There are now tens of billions of doses promised for delivery in 2021, thanks to an unprecedented scientific effort.
There have already been early challenges, with fraught discussions between the European Union and supplier Pfizer over delayed supplies, and diplomatic challenges around the allocation of AstraZeneca production between the UK and the EU when 1Q output appeared below projections.
With locally-backed vaccine candidate from Arcturus Therapeutics yet to go through phase three trials, Singapore is reliant on imports of vaccine doses from abroad. The country is exposed to external hurdles around manufacturing failures and potential “nationalist” approaches in producing countries that prioritise local availability. The timely availability of vaccines may well represent the most notable challenge for Singapore’s current vaccine programme
Cold chain requirements also present a hurdle for some vaccines. The Pfizer vaccine, one of the world’s first approved vaccines, has ultra-cold shipping temperature requirements of –80°C while the vaccine from Moderna requires –20°C. These will require advanced cold storage infrastructure that could be beyond some less developed areas.
While BCG’s study reveals the welcome availability of necessary resources such as dry ice to meet the cold chain requirements, aligning with storage capabilities at a community hospital in a rural part of Southeast Asia seems unlikely. Vaccine choices in such cases will need to align the ease of supply and storage with the level of local health infrastructure.
Vaccines with complex supply needs may still play a part in Southeast Asia’s strategy, particularly in more advanced urban centres such as Singapore, Kuala Lumpur, Bangkok, and other cities. Singapore has been quick to approve the use of Pfizer-BioNtech and Moderna vaccines for example, as ultra-cold chain is not a limiting factor in nationwide vaccination.
Global transport and logistics providers like Kuehne+Nagel are already working on regional hub strategies with strategic distribution hubs which offer appropriate storage for a range of vaccines.
Bridging storage and distribution gap
Having tackled the challenges of manufacturing and storage, Southeast Asian nations will need to address the varied challenges of transport, distribution, and cost.
Different countries and regions will adopt different models of distribution. There is no one-size-fits-all approach, and vaccinating rural areas of Laos will require a markedly different strategy to over-65s in Kuala Lumpur.
Many variations of the distribution model are viable. Some might adopt a hub-and-spoke model, with central stocking at a carefully controlled warehouse used to distribute supply on demand. Point-to-point delivery, with cooling infrastructure in place at vaccination centres but no intermediate storage, could provide a solution in some communities.
A comprehensive state-run programme like the UK or Israeli vaccine roll-out offers a third option, leveraging national coordination efforts and established agencies to drive distribution.
BCG analysis of global supply chains reveals that while planning may be challenging, such distribution is well within the bounds of freight capacity. Vaccine shipments would represent less than 1% of global air freight capacity.
Delivery costs will also be an important consideration, particularly in nations of Southeast Asia where price sensitivity remains a challenge for health systems. The global not-for-profit Covid-19 Vaccines Global Access (COVAX) facility may play some role in mitigating costs to less affluent nations such as Laos and Cambodia.
Those nations not participating in this scheme should be reassured that distribution costs will be a relatively small part of overall vaccination costs. BCG estimates that distribution costs run to just US$0.07 ($0.094) per dose, dependent on air freight costs and last-mile delivery. A worldwide pandemic costing the global economy billions of dollars a day puts such costs in perspective.
Perhaps the most pressing concern in many Southeast Asian countries will be the final consideration around the point of delivery. Israel — a world leader with over 90% of the adult population vaccinated — benefits from modern, centralised healthcare recordkeeping and concentrated population density with easy community access to vaccination hubs. That is a world away from the challenges of vaccinating the 17,000 inhabitants of the Philippines’ remote Batanes islands.
Compounding this challenge is the need for vaccinators on the ground to understand the varied storage and administration requirements of different vaccines. Private healthcare providers will have to work closely with state-run national health infrastructure to overcome these challenges in partnership.
This is particularly important given the dual-dose nature of many existing vaccines, and the need to record and track not just who, but when a dose was delivered to align with national guidelines on dosing regimens.
An effective vaccination roll-out undoubtedly comes with challenges. But BCG’s study shows those logistical hurdles are far from insurmountable. Businesses and society should look to a future of greater freedom with hope, with both the logistics and expertise in place to ensure a successful roll-out.
While the final form of that roll-out might vary by location, the opportunity is clear to provide a shot in the arm for the regional economic and social restart in 2021 and beyond.
Anthony Oundjian is managing director and senior partner at Boston Consulting Group.
