Last Mile Optimisation Begins with the First Mile
1 November 2020
Why Last-Mile Delivery Optimisation Begins with the First Mile
The first and last miles of the health supply chain have proven to be the greatest challenge for organizations when striving to meet Sustainable Development Goal 3; Good Health and Wellbeing. In recent years, significant progress has been made in delivering health-related interventions designed to improve maternal and child health, health coverage, and vaccination rates, as well as reduce mortality and ill-health due to communicable diseases. It is increasingly apparent, however, that the gains have been neither universal nor sufficiently broad-based and sustainable. During times of massive disruption, such as a global pandemic, the right supply chain management strategies can boost visibility, lower risk, and increase the speed of service.
Integration of air transport into the first and last mile is a proven method to catalyze significant positive change in the supply chain. The success and universality of this solution are prefaced on overcoming existing infrastructure, transportation, and geographical barriers, by making access to the air seamless. The use of sustainable, reliable, and scalable drone logistics networks, such as those deployed by Swoop Aero, has the capacity to transform the healthcare system at the first and last mile of the supply chain. This new capability can ensure the healthcare sector moves towards its optimal level of efficiency, to deliver better patient outcomes, more equally, across the world.
Creating efficiencies in the first mile
The first mile of delivery is identified as the first leg of the journey the item will make in the individual supply chain process. A manufacturer, for example, may see a first mile delivery as the transportation of their completed goods from the factory to a distribution center or warehouse. In the realm of global health, the first mile of delivery is assumed as the most inelastic with reference to the need for innovation, technological ingenuity, and advancement. However, this is a common misconception:
Goods spend much more time getting through the first mile than the last mile
The first mile is rife with logistical inefficiencies often overlooked in supply chain transportation costings — for example, the time taken to package cold chain and highly dangerous medications prior to the commencement of the journey, the time taken to send goods via slow modes of transport such as road, rail or ocean carrier, and the time containers spend idling at ports, detention, or inspection facilities. The use and continued reliance on these standardized methods add up to longer lead times, which ultimately has a profound impact on the wellbeing and health outcomes of the patient, who depend on that medication arriving quickly.
Inefficiency in the first mile has a domino effect
The inelasticity of conventional and standardized first mile logistics means that if there is an emergency need for a health commodity, it is unlikely conventional methods will be able to deploy both rapidly and cost-effectively. Failure to accommodate designated windows of transport may add weeks to the lead time, which then compounds the wait for goods at every subsequent stage of the supply chain. With this knowledge, suppliers may routinely hold high levels of safety stock to accommodate unpredictable inventory lead time, which builds up inventory holding costs, working capital, and other hidden costs that ultimately erode profit margins.
Conventional first mile supply chain methods, such as courier vehicles, bikes, and on-ground transportation remain the primary cost leakage for businesses operating within this sector. These forms of transportation take hours to reach their destination and require plenty of warning in order to prepare individuals and supplies for the journey. In addition, there are costs of warehouse storage and housing costs associated with these methods of transport, to ensure the supplies are not spoiled in the process. Hiring the staff required to man these vehicles represents a further operational expenditure cost within the first mile of the supply chain. The integration of innovative and airborne methods into this stage would significantly reduce these capital and operational costs incurred by the business to enable a faster and more streamlined first mile of the supply chain.
The Last Mile of Delivery
The last-mile delivery is intended to be the last step of the supply chain. It is the final transportation of goods; the item is delivered into the hands of its final user and owner. In the case of health supply chains, this means the essential medication or supply sought has successfully been delivered to the patient in need. The last mile also represents the most expensive leg of a supply chain, as it usually accounts for between 30-40% of the total delivery cost.
The last mile of delivery has often proven the most difficult and tedious to overcome. This may be due to a myriad of factors, such as poor transportation networks, weak infrastructure, unpredictable waterways, or climatic activity that isolates remote and rural communities from essential services and goods. At present, one billion people across the world lack access to essential health supplies at the last mile of the global supply chain.
Universal health coverage requires universal access to medicines, vaccines, and other health commodities. Over the last decade, tremendous effort and funding have gone into improving the availability of contraceptives and other reproductive health commodities, of essential medicines to treat HIV, malaria, and tuberculosis, and of new vaccines and new presentations of traditional vaccines so as to improve the health outcomes, evidenced at the last mile of the global health supply chain.
Conventional methods had tended to transport bulk supplies of these essential healthcare commodities that were not tailored to the individual facility. The design of the last-mile supply chain has meant these supplies were to be stored until they were needed, resulting in a huge waste of unused, or unwanted, healthcare supplies as well as time lags in the provision of essential goods reaching their specified destination. These variables have contributed to huge cost leakages as well as stunted progress within the realm of global healthcare equality and improved wellbeing, as defined under Sustainable Development Goal 3: Good Health and Wellbeing.
The ability to overcome the challenges of the first and last mile and realize efficiency gains associated with Industry 4.0 “Just in time” deliveries in any supply chain globally can be catalyzed by the integration of a new mode of transport; air logistics.
Our solution in action
The seamless integration of air logistics into the first and last miles of the health supply chain to work alongside other means of transport has led to improved service delivery and enhanced access to essential health commodities and care for millions across the globe. In Malawi, the Swoop Aero air logistics platform has effectively strengthened both the first and last miles of the supply chain through a managed two-way logistics network that connects health facilities, health care staff, and patients to the essential health supplies they require. The air logistics platform complements and integrates within the existing means of transport. Previously, in Malawi, motorbike couriers were servicing the area. Generally, they were delivering essential health supplies to each health facility twice a week. The existing service had clear limitations and, especially in the wet season, these ground transportation methods were hindered in their ability to overcome flooded roads, destroyed paths, or unpredictable waterways. By integrating motorbikes and aircraft, we have been able to provide an integrated logistics solution that has enabled each health facility to receive medical commodities 7 days a week, conducting multiple on-demand and scheduled flights per day, thus optimizing the health supply chain to reduce time delays and the potential of lost supplies. In addition, Swoop Aero has also empowered communities and local governments via the integration of user-friendly information systems, technological apparatus, and decision support approaches, which enable them to take control of their supply chains at the last and first miles.