Revitalising Bangladesh's healthcare supply chain

With a population exceeding 170 million, Bangladesh has experienced significant economic growth. The healthcare sector has played a crucial role in this. 

Currently, the country boasts 654 government hospitals, over 5,000 private hospitals and clinics, and 10,675 privately registered diagnostic centres. Supporting these facilities are more than 500 regular suppliers who provide essential medical supplies. 

Any disruption to the healthcare supply chain could lead to shortages in medical provisions, impacting patient care quality and increasing healthcare expenses. 

Medical consumables are crucial in the diagnosis, treatment and prevention of medical conditions, it ranges from bandages, syringes and gauze to testing devices and reagents. Some are designated as 'single-use,' emphasising hygiene, while others can be reused with sterilisation. Utilising disposable medical consumables maintains aseptic conditions, reduces infection risks and ensures the efficient delivery of healthcare services.

Factors influencing the market

Over the last decade, Bangladesh has experienced rapid economic growth and a consistent population increase, driven by rising income levels and a shift in disease patterns. While communicable diseases were predominant before, there is now a noticeable shift towards non-communicable diseases like cardiovascular diseases and cancer. This change has led to an increased demand for healthcare services nationwide. 

The emergence of the Covid-19 pandemic has further intensified this demand, particularly for specific medical services, equipment and devices. Consequently, the healthcare scenario in Bangladesh is undergoing a substantial transformation in response to the evolving healthcare requirements of the population.

Procurement practices for private and public hospitals

The procurement and financing practices for medical equipment and devices exhibit distinct differences between public and private hospitals in Bangladesh. In public hospitals, the entire process is closely monitored and executed by the Ministry of Health and Family Welfare (MOHFW). In contrast, private hospitals operate autonomously and independently manage the procurement and financing procedures.

In the case of public hospitals, the process involves the preparation of an Operational Plan (OP) tailored to their specific requirements and demands. This operational plan encompasses both the funding and procurement aspects. Tender documents are subsequently prepared to facilitate the acquisition process. 

On the other hand, private hospitals follow a more decentralised approach. They gather requirements and demands from various departments within the hospital and then compile a priority list for procurement, which is followed by the initiation of the tendering process.

In determining the specifications for medical equipment and devices, public hospitals incorporate them into the operational plans. These specifications are set during the formulation of the plans. Conversely, private hospitals establish specifications on a need basis, aligning them with the specific requirements identified during the compilation of demands from different hospital departments.

Essentially, the procurement and financing practices in public hospitals are centrally managed and closely tied to operational plans, while private hospitals exercise a more autonomous and department-driven approach to meet their specific needs.

Common issues in procuring medical equipment

In Bangladesh's healthcare system, the challenges in importing medical devices include delays in customs clearance, often attributed to inadequately prepared documents by importers. These delays, lasting up to two months, pose a risk of disrupting the availability of vital devices. Maintenance issues are exacerbated in public hospitals with limited in-house technicians, relying on annual or comprehensive maintenance contracts. 

The dependence on imported spare parts for repairs, sourced from original manufacturers or overseas markets, further delays treatment delivery. Addressing these issues necessitates a comprehensive approach to streamlining imports, enhancing maintenance capabilities and promoting local solutions for sustainable healthcare delivery.

Current market practices in Bangladesh

The medical equipment and devices market in Bangladesh is predominantly reliant on imports. Interviews arranged by the Bangladesh Investment Development Authority (BIDA) with selected hospitals reveal that, with the exception of some disposable items and minor equipment, the majority of medical equipment and devices are imported from key regions, including the United States, European Union, China and Japan. 

According to data from the Bangladesh Bank (BB), the import value of medical equipment and devices reached nearly $416 million during the fiscal year 2019-20. While this figure remained relatively stable compared to the previous year ($417 million in FY 2018-19), the overall trend indicates a steady increase in the import of medical equipment and devices. Over the last five years, the import has demonstrated a compounded annual growth rate (CAGR) of 10.2%, showcasing a consistent upward trajectory in the demand for medical equipment and devices in Bangladesh.

Government initiatives to strengthen the medical supply chain

To promote the local manufacturing of medical equipment and devices in Bangladesh, a comprehensive strategy is crucial. In the short to mid-term, the focus is on actively attracting both foreign and local investments through partnerships, prioritising the needs of existing investors for reinvestment and expansions. 

Concurrently, developing local human resources for product innovation and manufacturing capabilities is vital, involving collaborative efforts with foreign manufacturers. Addressing sector-specific regulatory and operational challenges is deemed significant for a predictable and smooth investment establishment. 

In the mid to long term, the vision includes enticing potential foreign manufacturers through incentives and infrastructure development, encouraging reinvestments, fostering skills and technology development, and consistently improving the regulatory framework for sustained growth. A collaborative effort involving the government, academic institutions and private organisations is imperative to implement these policy measures for holistic sector development.

Supply chain resilience during health crises

Bangladesh's medical supply chain has encountered significant challenges during health crises, exposing vulnerabilities and highlighting opportunities for improvement. Notably, experiences from the Covid-19 pandemic have emphasised the critical need to bolster supply chain resilience. 

Initial hurdles included disruptions in the global supply chain, shortages of crucial medical supplies, and the imperative for swift response mechanisms. However, pivotal lessons gleaned have played a key role in shaping strategies for future preparedness. 

Essential measures involve diversifying suppliers and sourcing strategies, establishing strategic stockpiles, and employing technology for real-time monitoring and data analytics. Strengthening local production capabilities, fostering collaboration among government bodies, healthcare providers, and private sectors, and investing in workforce training are crucial components of building a resilient medical supply chain. 

By applying these lessons and forward-thinking strategies, Bangladesh can fortify the resilience of its medical supply chain, ensuring a more robust response to future health crises.

Logistical innovations: Improving distribution and storage

In Bangladesh's evolving logistics landscape, practical innovations are reshaping the distribution and storage of medical consumables. Real-time inventory tracking systems and IoT devices enhance visibility and prevent shortages. Cold chain storage facilities maintain the integrity of temperature-sensitive supplies. 

Collaborative public-private partnerships and shared logistics networks optimise resources for efficient distribution. Last-mile delivery benefits from eco-friendly transportation options, such as electric vehicles and bicycle couriers, which can navigate urban areas effectively. These practical innovations mark the first steps towards building a resilient and efficient medical supply chain in Bangladesh.

Production of medical consumables: Opportunities and challenges

According to a report from BIDA, with the expansion of medical facilities, the demand for medical equipment and devices has experienced substantial growth in recent years. Despite this surge, the demand has predominantly been fulfilled through imports, accounting for approximately 92% as of 2019.

Although local production of medical equipment and devices is currently in its early stages, mainly encompassing consumable products like syringes, needles, bags and Personal Protective Equipment (PPE), along with a limited range of electrical and electronic appliances, there exists significant potential for expanding the local production of medical equipment and devices.

Role of data analytics in forecasting medical supply needs

In the healthcare system of Bangladesh, the utilisation of data analytics and predictive modelling is crucial for forecasting and managing the demand for medical consumables. By employing advanced analytical tools, professionals can analyse historical data to identify patterns and trends, enabling more accurate predictions of supply needs. 

Real-time monitoring systems ensure timely responses to fluctuations in demand, optimising inventory levels. Predictive models consider variables like disease outbreaks and seasonal variations, enhancing precision. These data-driven approaches streamline the supply chain and contribute to effective resource allocation, ensuring essential medical consumables are readily available to meet the dynamic healthcare demands in Bangladesh.

Training and capacity building in the medical supply chain

In Bangladesh, there is a concerted effort to bolster the skills and capabilities of professionals engaged in managing the medical consumables supply chain which is crucial for a robust healthcare system. Various initiatives address this need, including specialised courses offered by educational institutions and industry associations, covering topics such as inventory management and logistics. 

Government-sponsored workshops and seminars create platforms for knowledge exchange, while collaborations with international organisations bring global expertise to local professionals. On-the-job training, internship programmes and customised modules cater to practical experience and address sector-specific challenges. 

Certification programmes and partnerships between industry and academia further enhance professional development. Technological advancements are supported by digital literacy programmes. Online learning resources also offer continuous learning opportunities. 

Public-private partnerships drive joint initiatives, contributing to the resilience and efficiency of Bangladesh's healthcare system by cultivating a skilled workforce adept at navigating the complexities of the medical consumables supply chain.

Recommendation for healthcare supply chain management to mitigate disruptions 

Healthcare supply chain management sustainability relies on effective utilisation that emphasises people and the economy. Assessment involves evaluating its impact on people and economic significance. To address challenges, sustainable supply chain management is crucial, combining available resources and systems. 

Key elements include consumption management through historical analysis for effective procurement, spend analysis and sourcing history. Analysing the entire sourcing history aids in precise decision-making. 

Supplier portfolio analysis categorises suppliers for effective management, ensuring urgent delivery through Supplier Relationship Management (SRM) based on categories and focusing on alternative sources for critical supplies.

Mohammad Ashraful Islam Khan is a management consultant with expertise in operational optimisation and supply chain management.

Mohammad Ashraful Islam Khan is a management consultant with expertise in operational optimisation and supply chain management. Email: [email protected].

Gobindo Kumar Nandi is a Supply Chain Specialist at Sinovac Biotech Limited. 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.