Appendix A: Evaluation of the National Emergency Stockpile System (NESS) – Life-cycle management

Appendix A: Considerations − Life-cycle management

The Public Health Agency provides public health supplies for emergency response in Canada. The following section will discuss how activities in other jurisdictions can help to inform an updated approach to life-cycle management for the NESS program.

A key recommendation from the 2010 Audit of Emergency Preparedness and Response was that

"...the Director General Centre for Emergency Preparedness and Response should initiate the development and ongoing maintenance of a National Emergency Stockpile System strategic plan and operational business plan, based on a comprehensive risk and needs assessment, to guide program activities."[Link to footnote 16]

Operational Capacity

This evaluation, along with numerous earlier reports, highlights the need for the Public Health Agency to manage a number of increasingly complex aspects/functions to ensure that, during an emergency, the supplies in the NESS are used efficiently and effectively. However, the NESS program is about more than just inventory management; for example, the Public Health Agency has a domestic role in coordination and leadership around the management of provisions for a public health emergency response. An updated, multifaceted NESS program will require management through more of a business model or systems lens, shifting the emphasis away from just warehouse or stockpile management.

As mentioned previously, operational capacity within the Centre for Emergency Preparedness and Response should be enhanced to address previous recommendations and future activities. Proactive strategic and operational planning, and consistent and meaningful engagement with stakeholders, is required. This is especially crucial when liaising with provinces and territories on their disaster response plans and when negotiating Memoranda of Understanding. This engagement requires an awareness of other jurisdictions' emergency response roles, responsibilities and plans. For example, in the United States, the Centers for Disease Control and Prevention have dedicated teams responsible for various aspects of their Strategic National Stockpile of provisions, including preparedness, program planning and analysis, logistics, and response, and exercises/team training.

Operational capacity should also take into account the links that need to be maintained or enhanced between the NESS program and internal branches of the Public Health Agency or the rest of the Health Portfolio. The NESS program depends on other areas of the Public Health Agency for strategic advice with regard to products and planning. For example, the Infectious Disease Prevention and Control Branch provides advice and guidance regarding the purchasing of specialized products (such as antivirals). The NESS program also requires other internal branches to confer with them on aspects of other internal branch business that may impact the management of the stockpile. The reciprocity required with these relationships should be taken into account.

Currently, staff dedicated to the NESS program are primarily responsible for stockpile management. Considerations should be made to enhance the operational capacity of the NESS program to meet the wider variety of activities that are involved when managing a stockpile for emergency response.


As mentioned above, to respond to the 2010 Audit of Emergency Preparedness and Response, the Centre for Emergency Preparedness and Response is already examining a strategic long term plan for the NESS program. One area of interest to the provinces and territories is risk assessment that is not a "one-size-fits-all" approach. Different jurisdictions face different risks, and have different geographical environments and different capabilities when considering surge requirements. For example, representatives from the provinces and territories stated that capacity in small remote communities is often limited. There are unique challenges for storage, transportation, training and the availability of skilled professionals. To illustrate this point further, it was noted that the storage of pre-positioned NESS supplies is a big challenge, due to the lack of available storage space that meets specifications for NESS medical and pharmaceutical supplies (e.g. heating and security).

Interviews with Public Health Agency staff reinforced the 2010 Audit findings that, in the past, some procurement appears to have been primarily done on an ad hoc basis, in part due to budgetary constraints. However, there is a well-recognized desire for a long term strategic plan that takes into account the full life cycle of any given product, from planning to procurement to storing to deployment and finally to disposal.

For example, with advancements in medical technology, the modules (e.g. mini-clinics, see section 2.1) pharmaceuticals and medical equipment in the NESS program have become increasingly complex. More advanced medical equipment needs more maintenance by trained bio-medical technicians. There is a large volume of advanced medical equipment now in the NESS warehouse for which there is minimal infrastructure or human resources to support its sophisticated and labour-intensive maintenance. The NESS program will need to plan for, and be resourced to manage, the maintenance requirements for these types of contemporary medical acquisitions.

Subject matter experts have played an important role in providing guidance regarding recent purchases. To support evidence-based decision making, a Pharmaceutical and Therapeutic Committee has recently been approved and a Material Supply and Equipment Committee is under development. There is still a need to develop a long term strategic plan that will allow the Public Health Agency to undertake more focused decision making on key supplies in a well-defined role.

Procurement and inventory management

While it is expected that some inventory will always need to be purchased and held by governments to insure against the scarcity of supplies during an emergency response, other methods of procuring and storing supplies should be considered. Canada is not the only country currently exploring improved efficiencies within this area. Australia is also reviewing its approach to inventory management; the country currently purchases and stores its entire inventory, similar to the NESS program.

A "one-size-fits-all" system is not the best approach for inventory management either. The Public Health Agency should consider whether the options below are suitable for different types of products or types of emergencies (e.g. for a pandemic versus a natural disaster such as a flood).

'Just-in-time' inventory

Pharmaceutical companies, like other sectors, have been adopting a 'just-in-time' method of managing the acquisition of raw materials for manufacturing and delivery of finished products to end users. The purpose of this approach is to reduce storage costs and capital frozen in the form of unsold inventory. Hospitals themselves have been adopting a similar approach to inventory management and are dealing with fewer suppliers.

In general terms, this method has meant the reduction over the last 10 years of private sector inventories from six months to around two months (or less) of supply. However, this approach does mean that inventory supplies are more vulnerable to shortages and this should be considered in any risk analysis. The Canadian Pharmacists Association, in its December 2010 report surveying pharmacists on drug shortages, states, "Supply is primarily a market‐based function that relies on a fragile supply chain of raw material suppliers, manufacturers, wholesalers, distributors, pharmacy corporations, other pharmacies, and individual pharmacists. If there are disruptions in any part of that supply chain, shortages will occur."[Link to footnote 17]

Another challenge to this approach is accounting for other logistical aspects (such as transporting from vendor to destination) when planning for the deployment of materials during an emergency situation. Other challenges related to budgetary constraints (availability of funds when emergencies arise) also warrant consideration.

Third-party-managed inventory

Another approach to be considered is the expanded use of a vendor- or distributor-managed inventory, leveraging the use of private sector warehouse and inventory management capacity. The continuous expiry of components of the stockpile could be managed by cycling inventory through the vendor's stockpile, as needed, through ongoing sales to other customers.

The Ontario review of the province's response to the 2009 H1N1 pandemic examines Ontario's stockpile system, which utilizes this approach:

The highly efficient distribution of supplies resulted from a strong working relationship with a logistics partner before the pandemic (developed as part of the OPHIP [Ontario Health Plan for an Influenza Pandemic] planning) and the capacity to establish thresholds for orders by timing, quantity and product mix which limited extraordinary draws on the stockpile. The online ordering system allowed providers to place orders quickly and access supply kits specific to their practice and setting. The logistics company was also able to track and trace all orders, and provide daily reports to the ministry to ensure that health providers were receiving the materials they needed.[Link to footnote 18]

It should also be noted that Ontario has set up joint purchasing agreements with other health and public sector organizations (from hospitals to other government ministries) "who may otherwise be financially challenged to put in place their required supplies and equipment stockpiles."[Link to footnote 19]

However, certain factors should be taken into account when considering a vendor-managed approach to stockpiling. A vendor may not be willing to enter into this relationship if the product does not have much ongoing customer demand. Therefore, the types of products in this particular type of stockpile management are an important consideration.

As mentioned above, logistical and transportation considerations should also be included in this approach to stockpiling. Finally, it may be possible that a vendor in another country may be prevented from exporting stock by the host country (due to a policy of meeting domestic emergency response needs), endangering the delivery of pre-purchased stockpile inventory.

International highlight: Vendor-managed inventory

There are many benefits to having vendor-managed inventory (VMI). The Norwegian Emergency Preparedness System espouses the virtues of VMI, such as "turn-key" operations; established stock levels (i.e. agreed minimum levels); and contractual arrangements for the immediate replacement of product. The Centers for Disease Control and Prevention use VMI to provide pharmaceuticals, supplies and/or products specific to suspected or confirmed agent(s) when VMI may be the first option for immediate response from the Strategic National Stockpile program.


It should be noted that, particularly in terms of deployment, provincial/territorial representatives overwhelmingly indicated that there has been a strong, supportive relationship with NESS management and staff over the years. They very much appreciated the proactive contact of staff when events are occurring and the direct involvement of NESS staff in support of deployments. A number of respondents also indicated that supplies were always provided in a timely manner (24-hour turnaround) and that the pre-positioning of supplies for mass gatherings promoted familiarity with the NESS program and exercised logistical supports that would be used for actual emergencies.

The following suggestions will augment future deployment activities. Communication and training activities could help provinces, territories and local responders in their understanding and subsequent use of the provisions available through the NESS program:

  • Processes for requests, deployments, receiving and returns for various supplies need to be better articulated in written documentation. One suggestion was that a "concept of operations" document be developed that reflects the realities of each jurisdiction. It should include one-pagers on how to contact one another, expected time lines for deployment and how to access resources. Written instructions will also support ease of packing and shipping. Published specifications and standards for use by end users will ensure optimal performance.
  • The value of providing regularly offered and consistent local training relating to the NESS program was highlighted. In addition to general provincial and territorial orientation and annual familiarization activities, specific training should be considered to address: (a) clinical competencies, (b) logistic roles and requirements and (c) roles of material managers in the acquisition NESS supplies. Some jurisdictions suggested that centrally supported training should include documented best practices and training provincial staff to train their own people to sustain their own emergency stockpile systems.

We can also learn from other approaches. In the United States, the Centers for Disease Control and Prevention (CDC) has adopted some of these mechanisms. A planning guide for states and municipalities is available online and through the CDC extranet site. The CDC also distributes training DVDs about specific medical supplies, such as their ventilators, when they are deployed.

The Centre for Emergency Preparedness and Response has initiated some of these communication activities: there is a paper-based guide for setting up the mini clinics and training has been provided to jurisdictions for that particular purpose. This practice should continue and be expanded to include other elements of the NESS program.

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