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 / Autumn 2008 / Issue 52(originally published by Booz & Company)


Smarter Medicine

It became evident that if there were a nationwide emergency — a bird flu epidemic, for example — that put pressure on the vaccine supply, the CDC wouldn’t be able to respond the way the public would demand. “We had hundreds of depots, with six-plus months of vaccine inventory, in this very disjointed system, making it difficult to track,” Gimson says. “If we’d had a na­tional crisis at that time, it would have been extremely challenging to locate and secure measles, rubella, or in­fluenza vaccine and ship it to a centralized place in order to triage it appropriately.”

By July 2003, the CDC began addressing the key components of a new vaccine supply chain system. Lane was chief operating officer for what was then called the National Immunization Program, responsible for all the activities and systems that kept it running. It was clear to everyone that, at a minimum, the IT system created in 1993 to support VFC needed to be changed. A request for proposals was issued to replace the antiquated system and software. “But I was thinking that this could be our one opportunity to get it right, to think about where we want to be 10 years from now,” says Lane. “I had to ask, ‘What could we do differently knowing what we know today?’ From my perspective, we needed to launch a comprehensive program to look at all aspects of vaccine management at the CDC, not just this one part.”

That’s when Lane went to Gimson. “We started putting the jigsaw puzzle together, and we realized that the impact of a more comprehensive approach was going to be huge compared to the impact of changing one little ordering system or some other improvement to a single component,” Gimson says. He gave Lane the green light to look at revamping not just ordering, but the process in its entirety. And almost as soon as that happened, Lane was on the phone to Brock Lamont, a seasoned public health advisor in the CDC’s immunization program.

Improving the Process
Lane and Lamont had worked together in the late 1990s on the VFC program. If Lane was going to pull off any significant change, she knew she would need to sell the plan to a host of constituents, including CDC scientists and physicians and U.S. government officials all the way up to the Office of Management and Budget. Lamont, who was running the Houston VFC program, was a bridge to many of those parties, especially the state and local immunization programs.

After a three-month study, Lane and Lamont developed an initial set of recommendations for tackling the complexity and inefficiency of the current system. As much as possible, they borrowed from the best practices of supply chain management in private industry.

The chief components covered four main areas. The first was centralized distribution by a commercial third-party company. No state or city would store or deliver its own vaccine. The responsibility would belong to a third party, with performance guarantees and insurance against loss built into a contract. Having just a few centralized depots would significantly lower the amount of surplus vaccine in the system and save tens of millions of dollars in the purchasing cost.

To address the six-week funding bottleneck, the plan called for allocating money from a single large account directly to vaccine manufacturers, rather than through the 64 lines of credit. To bring a little efficiency to the process, the plan also called for a new Web-based ordering system that would be accessible to the 64 projects and to thousands of doctors’ offices. Not only would these changes bring the ordering procedure into the 21st century, but they would also provide a trove of data for scientists, health-care workers, and manufacturers, who could then analyze demand and other patterns of need and behavior. The system would also, for the first time, allow federal budget specialists to precisely reconcile the money spent with the actual amount of vaccine delivered. The final major change was the establishment of a centralized stockpile of vaccine in case of emergency.

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  1. Bill Jackson and Conrad Winkler, “Building the Advantaged Supply Network,” s+b, Fall 2004: Collaborative strategies with examples from aircraft, consumer products, and auto manufacturers, plus advice for step-change planners.
  2. Dan Jones and Jim Womack, Seeing the Whole: Mapping the Extended Value Stream (Lean Enterprise Institute, 2000): Practice guide with diagrams and techniques for mutual analysis and lean thinking.
  3. Keith Oliver, Dermot Shorten, and Harriet Engel, “Supply Chain Strategy: Back to Basics,” s+b, Fall 2004: The best practices of companies that do supply chain management well. 
  4. Association of Immunization Managers Web site: Further information about immuni­zation policy development, partnerships, programs, and program management.
  5. Centers for Disease Control and Prevention Web site: Provides background and resources on the CDC’s goals and operations, including detailed information on vaccine and immunization programs.
  6. For more articles on supply chains, sign up for s+b’s RSS feed.
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