Last week, we learned that Amazon’s fourth-quarter results smashed analysts’ expectations. Revenue climbed 21% year on year, profits rebounded, Prime is paying off, and market cap surged to over $1 trillion. Exciting developments for those of us who predicted the success of the Amazon operating model.
More sobering, however, was the news that the World Health Organization (WHO) had upgraded the status of the coronavirus to a global emergency, with 7,700 cases recorded worldwide, and the death toll in China rising to 170.
So what’s the connection between those two developments? The network effect. Amazon is a network of buyers and sellers who transact orders and share information about goods. The company’s phenomenal growth is due to its ability to rapidly leverage economic scale from the partner and customer network that it’s built over time.
Similarly, an Amazon Web Services-based platform connects pharma and healthcare providers with capabilities for seeing across the network, tracking and tracing uniquely serialized products from supply to patient, and exchanging data between supply-chain partners.
With the network effect, the more partners that connect, the more the network grows. And the more powerful the value of the network, the greater the business value of transactions across it — that is, until the platform can no longer scale. But with the increasing sophistication of technology and digital solutions, networks are becoming capable of growing exponentially.
The coronavirus is spreading globally because of the network effect. Virus infection increases exponentially as the planet goes about its normal life, and more people come into contact with one another on a daily basis. They travel, and goods move, but so does the virus, whether we like it or not.
At the same time, however, the networked operating model of supply-chain capabilities offers a solution to the exploding coronavirus issue.
The virus moves as its own supply chain, from source to recipient (patient), then from patient to patient under a network model. It doesn’t recognize boundaries, and it thrives on physical connections. Therefore, to counteract the spread of the virus, we need global transparency and analysis of related events. The capability to codify symptoms, and share lessons is fundamental. By learning from confirmed infections, we can model and counteract outbreaks quickly and efficiently.
The challenge is that we need agile digital and IT capabilities that allow us to do things at scale — things we couldn’t do in the past because of technology and complexity constraints.
In a nutshell, the solution to the coronavirus issue lies in the ability to build end-to-end supply-chain visibility, performance and risk-analysis capabilities. In addition, we need to create responsive planning and execution processes across countries and cultures.
To solve the coronavirus crisis quickly, we must pool global supply-chain thought leadership, capabilities and systems, and holistically build a platform that stretches from the evolving patient network back to the supply system. Then we must find and manufacture a vaccine, distribute product, and ensure that we locate all patients who need treatment. This end-to-end supply system must be designed around achieving the “moment of truth”: the point at which patients receive safe vaccinations. Delivery must be on time, in full, right the first (and every) time, compliant, and predictable.
Unfortunately, todays healthcare system is built on the premise of pharma companies making and distributing patent-protected product at such high margin and inventory levels that it overlooks the need for deep supply-chain skills and experience. A cure for coronavirus won’t get off the ground if this is the premise.
Let’s list the capabilities we need in supply-chain terms:
All this, of course, is what food and beverage, pharma and life sciences producers eat, sleep and breathe everyday. The difference is that coronavirus kills.
The above aren’t new capabilities for end-to-end digital supply-chains and healthcare. Yet today’s system of pharma manufacturing and supply, consisting of distributors, logistics providers and dispensers, is inefficient because:
To deal with coronavirus, we need to rapidly stand up a global digital platform that connects the coronavirus partner-solution system onto one seamless, digitally enabled network. Partners must be able to share data and insights, and collaboratively build a patient-centric vaccination and cure network for coronavirus.
We need to fix this outbreak and be prepared for the next one, whenever and wherever it occurs. It’s been done before; I was personally involved in creation of a global visibility and analytics network (VAN) program in Africa for the Bill and Melinda Gates Foundation, covering malaria, tuberculosis, AIDS and family planning. So let’s get cracking! It’s not like we’re implementing another enterprise resource planning (ERP) system.
Roddy Martin is chief digital healthcare transformation officer at TraceLink.
Timely, incisive articles delivered directly to your inbox.