Strengthening a Supply Chain to Save Lives: UNICEF, Malnutrition, and Global Warming

UNICEF must address climate change threats to build a more resilient supply chain for ready-to-use therapeutic foods essential to treating malnutrition

While some of us may be agonizing over excess pounds gained during this busy RC fall semester, over 16 million children currently suffer from severe acute malnutrition (SAM) and 1 million will die this year.[1] In 2007, the WHO formally recommended ready-to-use therapeutic foods (RUTFs) – a mixture of peanuts, sugar, vitamins, and milk powder inspired by nutella – for community-based treatment of child malnutrition.[2] Global demand has since grown from 5,000 MTs to 30,000 MTs  in 2016.[3],[4] The supply chain for RUTF has similarly evolved: until 2005, the French company Nutriset was the only supplier of RUTF. The United Nations International Children’s Emergency Fund (UNICEF), who procures and distributes over 80% RUTF globally, has facilitated the growth of local production and diversified its own supply chain. There are now 19 UNICEF-approved producers, including some countries – such as Sudan, Haiti, and India – with the largest RUTF needs.[5]

While there is now production capacity to reach all children in need of RUTF, total funding globally only covers 20% of the current need.[6],[7] Given the limited and relatively fixed nature of funds available, [8] any significant increases in supply chain costs could be expected to limit the number of children receiving treatment. With such significant unmet need, it is imperative the supply chain for RUTF be further improved to provide timely deliveries at the lowest cost possible. But global warming also presents a “double threat” to the RUTF supply chain – exacerbating volatility in demand and threatening the supply inputs – that UNICEF, in addition to governments and other NGOs, must consider.

  • As the earth warms, shrinking glaciers and erratic rainfall will cause water shortages particularly in the world’s most vulnerable regions. Somalia, Kenya and East Africa countries have experienced below average rainfall since the 1990s, contributing to 30% reduction in crop yields and recent famines, raising the need for RUTFs.[9] Droughts will further threaten the supply of milk and peanuts, which often lead to significant price spikes.[10],[11][12]
  • An increase in frequency of hurricanes and other unpredictable destructive events have already led to millions of displaced people and threaten public infrastructure essential to last mile delivery of RUTFs.[13] Climate change is expected to cause more food riots and larger political uprisings, such as those seen in the Somalian and Syrian civil wars. Such events lead to mass displacement, which is associated with significantly elevated risk of malnutrition.[14]
  • Warmer weather will also allow pests and parasites to thrive, further threatening crop yields and the food security for populations in underdeveloped countries.[15] Peanuts are also particularly susceptible to aflatoxin, a microbacterial that could cause quality concerns for RUTF supply chain.[16]

While UNICEF does not explicitly reference climate change in its 2017 RUTF market report,[17] existing initiatives will also help to mitigate climate change related concerns including:

  • Diversifying the supply chain to local production.[18] While 50% of global RUTF demand is still served by Nutriset’s France factory that can “quickly speed up output…in response to emergency orders,”[19] shipments from France add extra costs, lead times, and greenhouse gas emissions.[20] Cost estimates suggest that for every child treated by RUTFs procured through emergency air freight orders, nearly two children could be treated with RUTFs procured through local production channels. Investing in local production also furthers economic development and resilience to climate change shocks.[21]
  • Buffer stocks and stock transfer programs[22] Increased demand for RUTFs is likely to coincide with events that simultaneously threaten local commodity supply and production capability. Building regional buffer stocks and stock transfer capabilities could help mitigate this risk.
  • Exploring new formulations to diversify commodity supply (e.g. using chickpeas, non-milk based products) and extend shelf life could help limiting exposure to commodity supply and price shocks

Additional areas for further exploration could include:

  • Medium term (10 year) strategic plan, including financing needs for countries with largest SAM burden under optimistic/pessimistic climate change scenarios. A more transparent, detailed, picture from UNICEF on future global RUTF funding needs and gaps may facilitate local government investment in production capacity, expanded corporate sponsorships and donations,[23] or new global initiatives to improve climate change resilience, food security, and RUTF supply chain
  • Better use of early warning systems to prepare response, inform production, and avoid costs of emergency orders.[24] The most recent estimates suggest UNICEF places many emergency orders and reports suggest early warning systems are underutilized.[25][26]
  • Technology solutions – e.g. drones – to reduce costs and time of last mile delivery [27]

If UNICEF aims to help the world achieve Sustainable Development Goal 2.2 of “eliminating child malnutrition by 2030,”[28] consideration of climate change related threats is imperative. What do you think UNICEF’s most immediate steps should be to further strengthen the RUTF supply chain? More broadly how can UNICEF encourage governments and the private sector to invest in improving food security for the world’s most vulnerable regions?

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Sources

[1] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[2] UNICEF, UNSSCN, WFP, WHO, Community-Based Management of Severe Acute Malnutrition – A Joint Statement by the WHO, WFP, UNSSCN, UNICEF, UNICEF, New York, May 2007, p. 2. https://www.unicef.org/publications/files/Community_Based_Management_of_Sever_Acute__Malnutirtion.pdf

[3] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[4] Manary, Mark. Local production and provision of ready-to-use therapeutic food for the treatment of severe childhood malnutrition. Technical Background Paper for UN, WHO, and UNICEF. 2005. http://www.who.int/nutrition/topics/backgroundpapers_Local_production.pdf; RUTF Global Demand, https://www.unicef.org/supply/files/UNICEF_RUTF_Demand_Sep_2016.pdf

[5] RUTF Prices and Suppliers. UNICEF. 2017. https://www.unicef.org/supply/files/Copy_of_RUTF_Prices_for_internet_11.pdf; UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[6] UNICEF covers 15% of global need, other organizations collectively cover 5%.

[7] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[8] Jayashankar M. Swaminathan, UNICEF’S Plumpy Nut Supply Chain, Center for Sustainable Development, UNC Kenan Flagler School of Business. 2009. https://www.kenan-flagler.unc.edu/~/media/Files/documents/cse/unicef-plumpy-nut-supply-chain.pdf

[9] OXFAM, A Climate in Crisis, April 2017. https://www.oxfam.org/sites/www.oxfam.org/files/mb-climate-crisis-east-africa-drought-270417-en.pdf

[10] Global Peanut Prices, http://www.indexmundi.com/commodities/?commodity=peanuts&months=120

[11] Mbazi, Morgan, Milk prices in Uganda shoot up as supply drops due to drought, The East African, March 9 2017,  http://www.theeastafrican.co.ke/news/Milk-prices-Uganda-drought/2558-3843796-j3c2e4/index.html

[12] United Nations Childrens Fund. A Supply Chain Analysis of Ready to Use Therapeutic Foods for the Horn of Africa. https://www.unicef.org/supply/files/SUPPLY_CHAIN_ANALYSIS_OF_READY-TO-USE_THERAPEUTIC_FOODS_FOR_THE_HORN_OF_AFRICA.pdf

[13] Cervigni, et al. Enhancing the climate resilience of Africa’s Infrastructure: the roads and bridges sector. Washington, D.C. World Bank Group. http://documents.worldbank.org/curated/en/270671478809724744/Enhancing-the-climate-resilience-of-Africa-s-Infrastructure-the-roads-and-bridges-sector

[14]Mason et al, Child Acute Malnutrition and Mortality in Populations Affected by Displacement in the Horn of Africa, 1997–2009. International Journal of Environment Research and Public Health. 2012 Mar; 9(3): 791–806. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3367278/

[15] Pereira et al. Climate Change Impacts on Agriculture across Africa, Oxford University Press. March 2017. http://environmentalscience.oxfordre.com/view/10.1093/acrefore/9780199389414.001.0001/acrefore-9780199389414-e-292

[16] Manary, Mark. Local production and provision of ready-to-use therapeuticfood for the treatment of severe childhood malnutrition. Technical Background Paper for UN, WHO, and UNICEF. 2005. http://www.who.int/nutrition/topics/backgroundpapers_Local_production.pdf

[17] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[18] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[19] Nutriset Website http://www.nutriset.fr/en/production/nutriset-industrial-know-how/

[20] Goentzel, Jarrod and Swaminathan, Jayashankar. UNICEF RUTF Supply Chain (B): Developing a Global Supply Network. UNC Kenan Flagler School of Business. January 2015. http://public.kenan-flagler.unc.edu/Faculty/swaminaj/Global-Health/UNICEF%20Supply%20Network.pdf ; Manary, Mark. Local production and provision of ready-to-use therapeutic food for the treatment of severe childhood malnutrition. Technical Background Paper for UN, WHO, and UNICEF. 2005. http://www.who.int/nutrition/topics/backgroundpapers_Local_production.pdf; 

[21] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[22] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

[23] See full list of corporate partnerships here: https://www.unicef.org/corporate_partners/index_25124.html

[24] United Nations Childrens Fund. A Supply Chain Analysis of Ready to Use Therapeutic Foods for the Horn of Africa. https://www.unicef.org/supply/files/SUPPLY_CHAIN_ANALYSIS_OF_READY-TO-USE_THERAPEUTIC_FOODS_FOR_THE_HORN_OF_AFRICA.pdf

[25] OXFAM, A Climate in Crisis, April 2017. https://www.oxfam.org/sites/www.oxfam.org/files/mb-climate-crisis-east-africa-drought-270417-en.pdf

[26] UN News Centre, Famine signs must never be ignored again as they were in Somalia. September 2017. http://www.un.org/apps/news/story.asp?NewsID=39835#.WgyudGhSw2w

[27] Peters, Adele. This Humanitarian, Aid-Delivering Drone Is Going To Be Edible. https://www.fastcompany.com/3064094/this-humanitarian-aid-delivering-drone-is-going-to-be-edible UPS and CyPhy Works Test Drone for Urgent Commercial Last Mile Delivery. September 2016. http://www.supplychain247.com/article/ups_and_cyphy_works_test_drone_for_urgent_commercial_delivery 

[28] UNCEF Supply Division, Ready to Use Therapeutic Foods, Current Outlook, 2017. https://www.unicef.org/supply/files/Ready-to-use_Therapeutic_Food_Current_Outlook.pdf

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5 thoughts on “Strengthening a Supply Chain to Save Lives: UNICEF, Malnutrition, and Global Warming

  1. In reading your paper, one of the terrifying factors is that climate change and malnutrition seem to be caught in a vicious cycle – as climate gets worse, malnutrition also becomes exacerbated. It seems that the struggle in trying to make a solution is that there is truly no way to decrease the costs of the current RUTFs without changing the core ingredients as climate change increases. Additional short term moves could be an investment in research to further develop natural antimicrobial technologies that may be able to counter some of the effects of prices, as well as temperature. I agree with the posit that a long term solution is required for this long term of a problem. Technology, in the long term, could create these effective warning systems that you allude to, as well as the usage of drones. In addition, collection of data may enable the UN to be able to effectively estimate patterns of change that lead to conflict enabling better understanding of when food shortages may occur. The private sector can better be utilized in that these problems that UNICEF is facing will also be felt by the rest of the Agro-industry. Therefore, technology that is developed can be applied to UNICEF and investments can be made to better tackle the climate change problem.

  2. Katherine — such an important topic, thank you for covering it so eloquently.

    You mentioned a few initiatives, and I wanted to call attention to the fact that one of them could be critical to enabling the other. You mentioned that organizations are exploring new formulations for RUTF. In my opinion, that is also a key step in another initiative you mentioned: diversifying the supply chain to local production. Taking one global RUTF formula and encouraging local production could lead to sub-optimal yields — for example, encouraging peanut production in a location without good peanut conditions would remove reliance on a different geography for that production, but could end up being less efficient overall. If, however, that location could more fruitfully produce chickpeas, or some other ingredient in a new RUTF formula, this problem is mitigated.

    One other related topic that we will have to face is the role of GMOs in fighting world hunger. On the surface, it would seem that if GMOs can increase shelf life, boost production (especially in difficult conditions), all at a lower cost, they would be a lever to pull. However, in addition to the moral questions raised, the intertwined incentives of stakeholders agricultural industry could make it difficult to navigate the complicated politics of helping those most in need.

  3. The recognition of “double threats” that climate change imposes on the RUTF supply chain is crucial; it puts the RUTF supply chain under the greatest stress where it is needed the most (e.g. drought areas). Thus, I agree with the importance to diversify its supply in the near term, be it the location of the sources or the type of ingredients sourced (though new formulation), as such diversified supply is essential to help mitigate production or transportation risks in concentrated regions due to weather disruptions.
    However, diversification also increases complexity of the supply chain, requiring more planning and coordination to ensure that the right amount of food reach the right destination at lowest cost available. The supply chain today may not be ready to handle the added amount of complexity, as suggested by the high cost of emergency orders that current system suffers likely due to weakness in anticipating demand and building right amount of inventory. Given the mission to maximize reach while minimizing cost to deliver food, the relevant organizations need to be keenly alert to the ramification of changes to its RUTF supply chain and implement changes thoughtfully to minimize operational disruptions.

  4. Katharine – your piece is fascinating and highlights the unique challenges found in supply chains when funded by the public sector. Unlike traditional markets, demand for a product does not necessarily entice supply. As you have pointed out, without adequate funding, supply chain cost efficiency becomes an absolutely crucial lever to try to maximize the number of life-saving products reaching populations who need them.

    It is interesting to consider how UNICEF might mitigate the concerns that climate change creates for both supply and demand of RUTFs. I worry that some of the solutions they are already engaged in will be effective – for example, while focusing on local production could reduce costs and time to market, climate change could very well limit production capabilities in local markets. For example rising temperatures are already preventing the adequate growth of peanuts, a key RUTF ingredient, in Haiti and causing countries like the US to “dump” these ingredients in-country, exacerbating local production challenges by putting small farms in a precarious position. (https://www.npr.org/sections/thesalt/2016/05/05/476876371/u-s-to-ship-peanuts-to-feed-haitian-kids-aid-groups-say-this-is-wrong)

  5. UNICEF definitely has its work cut out for itself. As demonstrated above, it is imperative that UNICEF invest in its supply chain in order to get ahead of the potentially disastrous impact of climate change and the increased prevalence of extreme weather patterns. [1] While localizing production would reduce lead time and delivery costs, this strategy faces two challenges: (1) by nature of the impact of climate change on pests, crop yields, and public infrastructure, the areas of the world in need of RUTF are also those where production has been negatively impacted; and (2) localizing production would require significant capital investment and could prove to be prohibitively expensive given the needed investment in public infrastructure. Given these considerations, UNICEF should aggressively invest in R&D to develop new formulations with raw materials that can be sourced from various regions across the globe, and thus diversify the raw material portfolio. Additionally, UNICEF could partner with global food companies and university researchers to learn best practices for agricultural production (one of which may involve the use of GMOs) as it pertains to protecting a global food supply chain against the threat of climate change. These seem to be the most capital efficient strategies for UNICEF to combat climate change.

    [1] United States Environmental Protection Agency (2016). Climate Change Indicators in the United States. Fourth Edition. pp.7-8.

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