H1N1 Production and Forecasts

The following table provides a summary of the H1N1 vaccine forecasts and actual availability:

Date	Forecast (million doses)	Actual
7/30/09	120 by October.
9/12/09	50 by Oct. 15,
9/26/09	40  by mid October
10/17/09	28-30 by the end of October.	11.4
10/26/09	30 by the end of October
10/28/09		23.2

Why the error in their forecasts? My favorite quote (NY Times Oct 25, 2009) is

Dr. Thomas R. Frieden, the director of the Centers for Disease Control and Prevention, “We really thought that having five different manufacturers would buy us some insurance, that they wouldn’t all have problems.”

The implicit assumption in this quote is that yields would be independent across flu manufacturers.  This may be true if yield primarily depends on manufacturing choices that could differ across the 5 manufacturers. But the manufacturers all used the same seed stock (the virus injected into eggs that is suppose to replicate within the eggs to make the vaccine).  Consequently, if the seed stock isn’t very good, it doesn’t matter if you have one manufacturer or 100! If you are going to diversity your risk by choosing multiple suppliers, then you should make sure that their yields are uncorrelated. (On a related point, there was no shortage of nasal spray vaccine, because they had a much higher yield … and used a different seed stock.)

There are some other reasons for the errors.  In July the forecast was based on an assumption of a high yield. However, the actual yield would not be known until the first batches were completed in August. Therefore, it seemed premature to put any faith in the July forecast without better information.

So why were the September forecasts wrong? The government basically asked the manufacturers’ for their forecasts, and not surprisingly, they got optimistic numbers. I am not saying the manufacturers lied. Instead, they probably thought it was possible that they could improve yields quickly enough to make the numbers. For example Sanofi Pasteur’s initial yield was 1.5 doses per egg and they did manage to increase it to 3 doses per egg.

Some of the shortfall was due to shortages in parts. For example, MedImmune, maker of the nasal vaccine, had more vaccine than it could put into nasal sprayers (their yield was apparently 5 times higher than expected), despite having their supplier of nasal sprayers work 3 shifts, 7 days a week.

Finally, one of the manufacturers, from Australia, satisfied Australian demand first.

The lesson from all of this, dare I say, is “don’t count your chickens before they have hatched”! Production yields are uncertain, and the government could have benefited from learning more about what determines those yields, when information would be learned about those yields and relying less on manufacturers’ forecasts.

Capacity shortages of H1N1 vaccine

Have you been able to get your H1N1 vaccine? Probably not – it has been widely reported that there are delays in the distribution of this vaccine. The interesting question is why? Reading a bunch of articles on this topic doesn’t shed a whole lot of light. But one figure jumps out at you – as reported in WSJ (10/19/09 – Delay Undercuts H1N1 Vaccine Campaign), the U.S. government has ordered 251 doses from 5 manufacturers. The current U.S. population is just over 300 million, so they have ordered enough to vaccinate over 80% of us. To put this in perspective, the U.S. normally vaccinates about 100 million. In fact, 114 million dose of seasonal flu was ordered in addition to the 251 million does of H1N1. The two types of vaccines are made with nearly identical manufacturing processes. So that adds up to about 365 million doses of vaccines, which is at least 3 times the typical production volume.

Given that manufacturers had to more than triple their capacity, it is not surprising at all that they are behind schedule in production.  Making matters worse, the quick ramp up may have contributed to the their lower-than-hoped-for yields. 

So instead of complaining that you can’t get an H1N1 shot, maybe you should be thankful that they have been able to produce as much as they have. Given the number of deaths among children, let’s hope better news will come soon.

Quality, Incentives and Healthcare

The opportunities for improved quality in healthcare are enormous.  Now, there is more incentive for the industry to take quality seriously – Medicare will stop paying for 10 conditions that it deems to be “reasonably preventable”.  For example, Medicare will no longer pay for the treatment of patients who received incompatible blood transfusions. No doubt, some of the techniques that have been used to improve quality on the factory floor will also be useful in the hospital – reporting defects so that attention can be focused on them, changing labels on sensitive medications so that additional care is given to them, asking all attending a surgery to count sponges and instruments to confirm that no unwanted objects have been left in the patient, etc. And, additional quality improvement techniques may be developed that are tailored just for healthcare.

New York Times, Sep 30, 2008: http://www.nytimes.com/2008/10/01/us/01mistakes.htm

Environmental Kaizen

Kaizen, or “continuous improvement”, means constantly working towards improving processes, no matter how small the improvement.  The idea of kaizen has famously been applied at Toyota to their manufacturing process but the concept has also been applied by GM to make their manufacturing plants more environmentally friendly.

GM’s Lansing Delta assembly plant in the the world’s only to have received Gold Certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) system. They achieved this goal by making many small (and some large) improvements to their processes. For example, they use bright lights were tasks are needed and dim or no lighting where light is not needed (such as where robots are working).  The restrooms use rainwater collected from the roof and the roof is painted white to reduce heat absorption. (Both the light and rainwater examples emphasize that an important resource should be used only where needed.) But more important than any single idea, the implementation of Kaizen changes how employees view their environment and motivates them to generate further ideas.

Automotive News, August 11, 2008 – GM Factory a Model of Sustainable Manufacturing

Dabbawala and six sigma

Based in India, the Dabbawala organization is the buzz of the six sigma consulting world. To quote from the Economist’s article: 

“Using an elaborate system of colour-coded boxes to convey over 170,000 meals to their destinations each day, the 5,000-strong DABBAWALA collective has built up an extraordinary reputation for the speed and accuracy of its deliveries…

At 9am every morning, home-made meals are picked up in special boxes, which are loaded onto trolleys and pushed to a railway station. They then make their way by train to an unloading station. The boxes are rearranged so that those going to similar destinations, indicated by a system of coloured lettering, end up on the same trolley. The meals are then delivered–99.9999% of the time, to the right address.

Apparently there is now an HBR case on the organization.  This is probably worth checking out further if you need to discuss quality management.

The Economist, July 10, 2008
THE CULT OF THE DABBAWALA

Quality management at the American Red Cross

According to the FDA, the American Red Cross is not as good at ensuring quality in the nation’s blood supply as it should be.  In fact, ” … despite $21 million in fines since 2003 and repeated promises to follow procedures intended to ensure the safety of the nation’s blood supply, it continues to fall short.”

This article describes some basic failures of quality management and illustrates some opportunities. For example, the Red Cross lacks a system to track errors (blood units that should not be introduced into the system) and hence has no mechanism to identify root causes and to develop solutions. 

Next, because it is a large ($2.1 billion in revenue) and decentralized organization (they use to have 53 operating regions and now 10) they lack uniform standard operating procedures.  Even when they have standard procedures, workers do not always follow them.  For example, a phlebotomist is suppose to swab a patient’s arm for 30 seconds and then let that area dry for 30 seconds, but those times are not always followed.  One solution is to make phlebotomists wear timing devices to ensure compliance. Another is to redesign the process to be more robust, especially with respect to ensuring that people comply with the standards.

The news is not all bad. A key lesson from quality management is the elimination of variability.  Red Cross workers sometimes forgot to ask all of the pre-screening questions to potential donors, thereby letting some donors pass even though they shouldn’t (e.g., if they had visited a malaria risk country).  To standardize the process, now potential donors must complete an on-line questionaire – the computer doesn’t forget to ask the question, so variability in the process is reduced.

NY Times 7/16/08 – Problems persist with Red Cross blood services
http://www.nytimes.com/2008/07/17/us/17cross.html