Being too careful helps no one. As soon as a country reaches peak infections, the demand for tests will sink and any excess capacity should therefore be given away.
BI BUSINESS REVIEW
Some countries have more tests than they can use, while others have fewer tests than they need to monitor and control the outbreak. The key question is, where can tests do the maximum amount of good? The impact of increased test capacity is much greater in the early stages of the outbreak than it is post peak.
Collaboration between countries is not only useful for effective sharing of test-kits, but also in the long run when the vaccine is ready. Will we ensure that ‘no one is left behind’?
The curve and its two phases
The curve of an epidemic consists of a contagion and recovery phase. Contagion is reinforcing during which each infected person contaminates more than one other person. Recovery is balancing during which the number of newly infected people slowly declines. This behavior is generic, it will happen everywhere. Even when countries manage to “flatten the curve”, there will still be these two phases of rapid growth and subsequent slow decline.
Phases of growth and decline
Phases of growth and decline are well-known territory in the field of Supply Chain Management (SCM). For instance, when introducing new products to the market, it may be difficult to keep pace with increasing demand. This leads to shortages and missed sales in the growth phase. By the time the deliveries are up to speed, demand is declining again, leaving one with obsolete inventory in the decline phase.
This phenomenon of shortage and surplus can also be applied to Covid-19 testing kits. Countries in the first phase of the pandemic struggle to get sufficient tests. Reasons for this are plenty: delays in forecasting, decision making, production, shipping, and distribution, or scarcity of raw materials required for tests. In the recovery phase fewer kits are needed, yet because of hoarding behavior and time lags in supply chains, earlier orders keep rolling in and a surplus starts to build up.
The waltz of the pandemic
A pandemic waltzes around the globe, hitting countries at different times. Putting A and B together, we note that some test kits will arrive when they are no longer needed, creating a surplus and some countries will have a surplus when others still struggle with a shortage. This raises the question whether countries can help one another other by reallocating excess inventories across borders.
The idea of collaborating is nothing new. To avoid expensive stockpiling, the SCM literature suggests collaboration across the supply chain to reduce missed sales in the growth phase and obsolete stock in the decline phase. To test whether this ancient wisdom of SCM holds the fort amidst a pandemic, we simulated the idea. Our model assesses the case of Norway (typically having a shortage of test kits in the contagion phase and a surplus thereafter) and evaluates the impact of collaboration.
We simulated two scenarios: (1) Norway’s test deficiency was partially (50%) resolved by a second source during the first phase of the outbreak, (2) Norway gave away its surplus of tests when it entered the recovery phase.
One cannot be too careful in the early days
The first scenario shows that Norway’s curve would have been completely different had it received half its shortage from another country (Figure 1): (1) the curve is flatter and (2) the curve starts earlier. By increasing the number of tests, the monitoring of cases improves, resulting in fewer hospitalizations and reduced uncertainty. Furthermore, Norway passes its peak earlier and the stabilized recovery phase sets in sooner. From our simulation it shows that Norway would have been substantially better off with the extra testing capabilities sent by other countries.
Yet, one can be too careful in the later days
The second scenario considers giving away the surplus of test. Norway can hold on to the surplus - just in case - or it can decide to help others by giving it away, keeping enough for its own basic testing. Although the latter is not without consequences, Figure 1 shows these are quite minor: recovery slows down slightly and hospitalizations continue for a longer period of time.
Lessons for responsible decision makers
Although the call for collaboration feels rather intuitive, it might still be a blind spot for decision makers. Our model shows we can exploit the time delays of the pandemic’s waltz around the world. Governments have the obligation to protect their citizens. To this end, one cannot be too careful in the contagion phase. However, when the peak has passed this argument no longer holds since the system is already in a recovery mode. An act of kindness at this stage hardly has any consequences for the giver except that it is indeed flattering to help save lives by flattening the curve for the receiver.
This is not only an ethical imperative but also a shared interest. Covid-19 has taught us the hard way that unaddressed outbreaks in one spot can put the entire world at risk. Although it may be too late to share tests, we might get a second chance when limited supplies of Covid-19 vaccines will need to be allocated. Will those reveling in abundance hold on selfishly to their safety blanket, or generously share their surplus stock to help save their unfortunate neighbor?
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