The challenge of reverse logistics in global health

by Michael Keizer on January 2, 2010

The Valley of the Drums, a toxic waste dump in northern Bullitt County, Kentucky. This site was one of the reasons the the U.S. Superfund law was enacted.

Have you ever thought about the reverse logistics in your supply chains? Very likely if you are involved in medical logistics, but probably not in those terms: reverse logistics is not something that comes up on a daily basis in discussions in our field.

Reverse logistics is basically what happens when goods need to flow back in the supply chain. The most obvious example is of course when expired drugs need to be sent back for proper disposal, but reverse logistics might actually be more common than you think: disposal of materials and equipment, recalls, returns of overstocks so they can be used somewhere else in the organisation: these are all examples of reverse logistics.

Yet we hardly ever put systems into place that deal with our reverse logistics; possibly because it is seen as an exception instead of the regular occurrence that it actually is in many organisations. The results are predictable: losses and negative side-effects are common. Some examples:

  • Financial losses Most organisations would have tight controls on expensive goods as they travel through the ‘normal’ supply chain. However, I have seen many instances in which these controls were absent or much less stringent when dealing with reverse logistics. In one example, when trying to see what happened with a large generator (value: several tens of thousands of dollars) after it was sent back for repairs, I discovered that nobody had actually followed up after it was sent back and a replacement arrived, and in the end it was untraceable. This was a big and unnecessary loss for the organisation.
  • Negative health effects If expired drugs are taken from the reverse supply chain and used (possibly after having been sold on the local market), they can wreak havoc on the health of the people using them; some drugs become toxic after some time, but even those who do not will probably start losing efficacy and would be as bad as under-strength counterfeit drugs – and that is even apart from the effects of uncontrolled use of e.g. antibiotics on the development of resistant strains.
  • Environmental damage Drugs might be beneficial for us, but they are not always so for our environment. Many drugs are toxic for other animals and plants; and even when they are not, it is not always clear what would be the long-term effects on the environment of uncontrolled dumping of drugs. That alone should be enough to have tight controls on what happens with expired drugs and how they are disposed of. This is even more true of e.g. used engine oil and other toxic waste: do you know what happens after an oil change? Is the oil just burned, or even worse, buried, possibly poisoning ground water for years to come? Or is it properly disposed of in an incinerator that reaches temperatures that are high enough to prevent hazardous fumes to be formed?
  • Legal liability In many countries where we work, there are strict laws surrounding disposal of drugs (especially psychotropic drugs), and ‘losing’ drugs in the reverse supply chain can open us to legal liability. Similar issues arise around environmental damage.
  • Loss of reputation Although there is still not much press attention for aid and global health organisations’ records when it comes to the effects I mentioned above, I don’t think it will be too long before our actions in this area will be put under the microscope as well (as they should be). Do you really want your organisation to be the first of the black sheep that will be singled out for our atrocious reverse logistics practices?

It is clear that we need to start working on our reverse logistics. It should not be too hard: the basic principles and best practices that we use in ‘normal’, forward logistics, can be used in reverse logistics too. The only question is: do we start working on this now or will we wait until it is too late?


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Sometimes I really wonder why we haven’t seen Madoff coming. Harvard Business School is one of the most high-profile business universities, and when a Harvard assistant professor of organisational behaviour talks about business ethics, you pay attention; so it should be no surprise that a recent interview with Michel Anteby, in which he seemed to support various sorts of fraudulent behaviour, drew quite some attention. His argument is that ‘leniencies’ are part of the standard managerial toolkit and that they are necessary to be able to our work well.

So let’s have a look at some of Anteby’s examples, try to find equivalents in health and aid logistics, and see how this works out.

Managing the store manager

[An] employee setting aside a clothing item in a storage room to later purchase for himself when the item will be deeply discounted is a gray zone as well. In high-end department stores such practices are often tolerated. This leniency when moderately exhibited is widely seen as “good” practice, a small favor done to reward deserving employees, and as such qualifies as a moral gray zone.

The equivalent here seems to be the store manager who ‘sets aside’ spare parts until the equipment for which they are used is superseded, and then buys them at a discount; or the medical store manager who ‘sets aside’ materials until they are almost expired in the knowledge that they will be donated to a befriended charity to prevent expiration. Is this acceptable? Not in my view — but the parallel with Anteby’s example is striking, and suggests that ‘business ethics’ would endorse acceptance of these practices.

Pulping the punch card

… a student who worked in the U.S. pulp industry was asked by his co-workers to punch them out later than they actually finished work. Management apparently was aware of this practice and allowed it.

I dont think I will need to spell this one out.

Medical paras

Paramedics are supposed to bring patients to attending physicians (most often in emergency rooms) and are not supposed to perform many medical acts. Officially, attending physicians are the ones performing the acts. Yet in some instances, to save “crashing patients” (meaning patients who seem about to die), paramedics will perform acts that they are not officially allowed to perform. Not all paramedics, however, are given such leeway—only the trusted ones. When physicians are aware of these breaches, yet remain silent, we are in the midst of a moral gray zone.

A logistics equivalent here would be to allow a storekeeper in an emergency to circumvent certain procedures so the program does not get bogged down in bureaucracy. Seems a good idea, doesn’t it? My view, however, would be that there is no need for it: include an emergency clause in your process description that allows your logistics manager to give dispensation of certain rules, but only after approval from another line manager, only for a limited period, and stipulating that this has to be formalised in writing or an email message. No need to break the rules: the rules should be flexible enough to deal with these situations — most definitely in aid organisations.

… by allowing trusted paramedics to “save lives” even if this means bending the rules a bit, physicians cater to the paramedics’ occupational identities. Paramedics become who they aspire to be, namely “saviors.” These paramedics are also more likely to cooperate with the physicians in the future. Thus, moral gray zones enable both managers and workers to perform their roles.

Anteby himself points the way here to a much better solution. In many countries, paramedics have a much larger role in patient management, in which they are allowed to and have received the training to be able to cope with crashing patients; e.g. in some countries paramedics can intubate, defibrillate, administer certain lifesaving drugs etcetera, and all this at their own initiative. Similarly, store managers who have received adequate training, tools, and discretionary authority, should be able to deal with almost any emergency while staying within the set procedures.

Upping the ante

Two broader implications can be drawn from this example. First, leniencies are part of the managerial toolkit. They allow for “local regulation”: in other words, they allow work to be done.

… Obviously, some level of organizational control is lost because “control” now occurs at the field level between the physician and the paramedic. In a way, top management loses power over its employees. In gray zones involving material pursuits—such as when a clothing item that could have been sold at a higher price to a customer is kept hidden until it becomes deeply discounted—direct losses can be calculated. At the same time, managers gain the employees’ engagement, and perhaps, more importantly, managers get to decide who benefits from its leniencies.

Anteby’s conclusion seems to be a total non-sequitur: as his own examples illustrate, work can be done without breaking the rules, without his ‘leniencies’; and employees can be engaged by other means, e.g. by sufficient training , remuneration, and career options. The telling point seems to be his last clause: power to the managers, whatever the cost.

And in the next episode…

My current project focuses on potentially contested practice where few norms seem to prevail. Whole-body donations for medical education and research provide the setting for this project. The goal is to understand how individuals and organizations operate in this context.

Right, everybody, hold on to your kidneys…


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