example is the introduction of agile contracting practices that increase supply flexibility. The idea is to lure back dormant suppliers, who have dropped out of the UK market because the prices are too low. By doing that, the NHS also diversifies its supply sources. Other established practices, such as varying tendering frequencies and awarding contracts regionally to different suppliers, are also helping to keep suppliers interested. ESTABLISHED LESSONS We are trying to facilitate evidencebased decision-making in the UK medicine supply system by sharing supply chain management knowledge and best practice from other sectors, or from other procurement contexts. Some of the things we have proposed would be transformational, but it takes time and resources to implement changes. We propose, for example, that supplier resilience must be rewarded appropriately by increasing prices for products (especially generics) with extremely tight margins or by giving some sort of minimum volume commitments to suppliers. The added costs of doing so would most likely be offset by a reduction in the substantial costs of dealing with drug shortages. We are also drawing on insights from other countries, like Norway, the Netherlands, France, Belgium and Sweden. Good supply chain management practices there can be potentially transferred to the UK, and the other way round. A lot of medicine supply contracts seem to focus more on “sticks”, the penalties for failing to do something. There are not enough “carrots”, positive incentives for suppliers achieving certain things. This is where we can learn from countries like Norway, and how they build in more incentives to get desired outcomes. BE THE BEST Last summer, DHSC and NHS England wanted to understand best practice in getting manufacturers and wholesalers to share their supply chain data – stock levels, sales, production capacities etc. They want this data to increase visibility of what is happening in different medicine supply chains, to model the flow of stock and see where they are likely moving towards a shortage. They asked us to look at what is happening in other countries and see what the best practice is in terms of either incentivising suppliers to share their data or alternatively mandating them to do so. Under Covid, stakeholders were willing to share information given the urgency of the situation. They shared more information than they had ever done in history, but they lost that interest when the crisis was over. We examined what is happening in Australia, New Zealand, Canada, Norway, the Netherlands, France and Denmark, and put everything into a report with several recommendations. Overall, we found the DHSC are not behind. Some of it was a question of showing them what they already do well, so they could formalise things they did during Brexit or Covid, or even before. But there is still room for improvement. One issue is that a lot of stakeholders talk about information sharing in real time, but this is extremely difficult to achieve in practice. There is always a time lag between collecting, analysing, and sharing date to enable informed decisions. Data sharing governance is also problematic. We only found one good example in Australia of a clear governance framework to communicate with suppliers what type of data they need to share, when, in which cases, and so on. The question also arises of whether it always pays off and makes sense for suppliers to share data. Policymakers and regulators need to think about the cost effectiveness of asking suppliers all the time to share their data. Should this be done only in particular situations? For example, when you have a medicine with a vulnerable supply chain. MOVING FORWARD We are continuing to study many of these areas and are interested to see what happens in the future. There are further actions that can improve supply chain resilience and ensure that the medicine shortages that make the news – and that often do not – become rarer, and healthcare provision becomes more robust as a result. FIFTY FOUR DEGREES | 21 Professor Kostas Selviaridis is Chair in Operations and Supply Chain Management in the Department of Management Science. Dr Nonhlanhla Dube is Lecturer in Operations Management in the Department of Management Science. Both were investigators on the Measures for Improved Availability of Medicines and Vaccines (MIA) international project, funded by the Research Council of Norway. The paper Riding the waves of uncertainty: Towards strategic agility in medicine supply systems by Dr Nonhlanhla Dube and Professor Kostas Selviaridis, of Lancaster University Management School; Professor Kim E. van Oorschot, of BI Norwegian Business School, Oslo; and Professor Marianne Jahre, of Kühne Logistics University, Hamburg, is published in the Journal of Operations Management. k.selviaridis@lancaster.ac.uk; n.dube@lancaster.ac.uk
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