The Hang Seng University of Hong Kong

2020-2021

SCM4308 Senior Year Project

Proposal

Investigating risk factors in cold chain for vaccine delivery in Hong Kong

Supervisor:

Students:

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Table of Content

Introduction............................................................................................................................. 3

1.1 Project Background. .............................................................................................3-4

1.2. Problem Statement .............................................................................................. 5-6

1.3. Project Objectives .................................................................................................. 6

2. Literature Review ................................................................................................................ 7

2.1. Overview of Cold Chain Management ............................................................... 7-8

2.2. Overview of Risk Management in Cold Chain...................................................... 8

2.3. Risk management Models and Techniques ....................................................... 9-10

2.4. Summary .............................................................................................................. 11

3. Methodology ................................................................................................................. 12-13

4. Project Schedule........................................................................................................... 13-14

References ......................................................................................................................... 15-16

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1. Introduction

1.1. Project Background

Nowaday, supply chains are very important and it is an indispensable part of most of the
companies. Humans rely on the supply chain to provide medicines and medical care. A supply
chain is a network of companies that can facilitate the transfer of goods and services from the
initial stage to the finished product delivered to the final customer. Supply chain management
(SCM) has improved human healthcare. In a medical emergency, supply chain performance
can be the difference between life and death.
Currently, every country and medical condition rely on SCM because of COVID-19. COVID-
19 is a contagious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-
CoV-2). The first case was identified in Wuhan, China, in December 2019. The disease has
since spread worldwide, leading to an ongoing pandemic. Figure 1 shows how the infected
person spreads the virus.

Figure 1. How the infected person spreads the virus

When the virus-containing particles exhaled by the infected person enter the mouth, nose or
eyes of other people who are in close contact with the infected person, a new infection occurs.
American is the most seriously infected country. Murphy (2020) states that there are around
6000 people deaths per day in the U.S.. And there are over 27,792,924 confirmed cases,
488,090 deaths in the U.S.. Therefore, we can see this issue is imperative to solve. And now a
few Pharmaceutical Factories have developed vaccines to counter Covid-19.
A COVID‑19 vaccine is a vaccine intended to provide acquired immunity against severe acute
respiratory syndrome coronavirus 2, the virus causing COVID‑19. As of February 2021 , 66
vaccine candidates are in clinical research , including 17 in Phase I trials , 23 in Phase I–II
trials , 6 in Phase II trials , and 20 in Phase III trials. And Hong Kong has ordered three Covid-

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19 vaccines(Cheung and Ting, 2020). They are Pfizer, AstraZeneca and Fosun. Each vaccine
has different storage and transport requirements. And cold chains are the main transportation
method for transporting vaccines.
Cold chain management means maintenance of necessary refrigeration levels for highly
temperature-sensitive coronavirus vaccines across manufacturing, storage, transportation and
distribution processes (Emergo 2020). Effective vaccine cold chain management will require
varying degrees of coordination and cooperation among multiple, distinct stakeholders. For
example, Pharmaceutical manufacturers, temperature gauges, hospital-grade freezers and
logistics providers. Effective cold chain management involves ensuring not only that
temperatures to maintain vaccine viability are held constant, but also that adequate technologies
are in place to vaccine storage, transport and distribution chains to verify stability of required
temperatures.
Hong Kong already has the fourth wave pandemic spreads. The Food and Health Bureau
announced and approved Fosun Pharma’s BioNTech for emergency use in Hong Kong, as
shown in Figure 2. How do they use cold chains to transport? How is Hong Kong International
Airport to deal with the problem? We are going to comprehend the operation of a cold chain in
Kong Kong.

Figure 2. Hong Kong approved Fosun Pharma’s BioNTech for emergency use

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1.2. Problem Statement

There are two problems identified in this problem. They are insufficient preparation in vaccine
delivery and lack of approach to deal with uncertain situation.

(i) Insufficient delivery capacity and equipment in vaccine delivery

Supply chains for COVID-19 vaccines are cold chains, vaccine delivery is such an urgent, huge
demand and also need to keep at that cold temperature will put lots of pressure on existing cold
chain infrastructure, there is insufficient delivery capacity and equipment for the cold chain of
the vaccine in the logistics industry. There is insufficient preparation to deliver the vaccine to
the public quickly and on time because there did not have enough logistics industry that has
the expertise and equipment to transport vaccines, the aviation industry also has insufficient
experience in large-volume medical logistics transportation with strict temperature
requirements, and a large amount of dry ice is required to keep the cargo at the required
temperature during vaccine transportation. This greatly increases the requirements on the air
transport capacity of aircraft, such as the capacity that the aircraft can carry, volume, weight,
etc. In addition, the logistics industry has been hit hard since the outbreak, and freight capacity
has continued to decline. Although in recent years the logistics industry has actively used
technology to reduce paperwork and technology upgrades, the systems required for a large
number of vaccine delivery tasks are different from the usual logistics industry operations, the
vaccines are transported by plane, then to the car to the local store, and then to the local
community, but vaccine delivery is necessary to seamlessly deliver the vaccine in the process,
to ensure that the vaccine is stored in extremely cold temperatures, to be properly stored, and
to be able to deliver the vaccine seamlessly, which are all challenging. Vaccines are biological
products and are very sensitive to temperature changes. According to WHO guidelines,
vaccines must be stored in a temperature range of +2°C to +8°C. When the vaccine is exposed
to an inappropriate temperature for 6 hours, it is very likely to invalid and cannot restore the
efficacy of the vaccine itself. Therefore, we need a complete cold chain to ensure the quality
of the vaccine, from vaccine transportation to storage, to ensure that the vaccine can be stored
within the temperature range recommended by the WHO, so that the vaccine can maintain the
quality from manufacturing to maintenance, Pfizer’s vaccines even need to be stored in
extremely cold temperatures of -70°C plus or minus 10 degrees, which may make it challenging
and causing the problem to transport vaccines globally.

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(ii) Lack of approach/method to deal with the uncertain situation

The transportation and storage of vaccines need to be carried out in an environment of 2°C to
8°C while taking into account mass transportation, which is an unprecedented situation for
vaccine delivery. This has caused a lot of instability, which requires higher requirements for a
complete supply chain and mature technology, but among lack of approach/method to deal with
the uncertain situation and risk of vaccine delivery, such as how to handle or deal with freezer
loss of temperature, equipment broke, human error, etc. There are few airports in the world
with cold chain equipment that guarantees extremely low temperatures. When the vaccine
arrives at the destination airport, there will be a problem with maintaining the temperature of
the cold chain, the various uncertain factors will appear, dry ice also cannot keep vaccines cold
for a long time. In addition to maintaining the temperature on the tarmac is a challenge, the
airport's cold storage warehouse capacity is also a problem, but it lacks an approach to deal
with the uncertain situation. Furthermore, medicines and food should not be stored in one place,
and the storage of the vaccine may temporarily affect the normal transportation of other cold
chain products. Although it can reduce instability through monitoring, it is difficult to monitor
the temperature of the entire transport chain, a complete logistics chain usually consists of
different transportation entities, such as road transportation, storage, loading and unloading,
customs clearance, aircraft transportation and loading, and air transportation. There are only a
few integrated logistics providers that can monitor and ensure the temperature stability of all
intermediate steps throughout the world, if the temperature in the chain fluctuates, it will affect
the quality of the vaccine. Therefore we need different plans of solutions to deal with an
uncertain situation.

1.3. Project Objectives

Three objectives are identified in this project, they are:

(i) To design an effective cold chain logistics strategy for vaccine delivery
(ii) To analyze the risk factors of transporting vaccine
(iii) To give recommendations to Hong Kong on vaccine delivery according to foreign practice

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2. Literature Review

The literature review formed by 3 parts, which are overview of cold chain management, risk
management in cold chain, and risk management models and techniques.

2.1 Overview of Cold Chain Management

Rodrigue and Notteboom (2020) said that cold chain management has emerged since 1950.
Cold chain management is a process of managing the temperature of perishable goods from the
point of origin through the distribution chain to the point of consumption, and the most
important requirements are to maintain them in good quality and remain safe (Global Cold
Chain Alliance, 2021). Bishara (2006) has stated that the cold chain is now becoming an
increasingly important component in the entire pharmaceutical supply chain. Fresh fruit, high-
valued foodstuffs, plants or flowers, vaccines and other pharmaceutical drugs can be
transferred through the cold chain system, to ensure they will not be damaged by different
factors (Rodrigue and Notteboom 2020). Falling to keep them under an appropriate temperature
will cause some serious consequences, such as degradation and microbial growth (Yeoh, 2017).
According to Yeoh (2017), cold chain management comprises 5 sectors, which are supply
procurement, transport, storage, transport and end customer. At different sectors, the perishable
goods should be kept in isothermal equipment, refrigerated equipment and freezer, in order to
maintain them under an ideal temperature. The detail of 5 sectors is listed in Figure 3.

Figure 3. The operation flow of cold chain

There are two kinds of packaging system can choose for transporting the temperature-sensitive
products, which are active packaging and passive packaging (Envirotainer, 2021). Active
packaging means the transporter can adjust the temperature with the electrical cooling system
inside the container, in order to maintain a specified temperature range. Also, active containers
can carry for a longer period of time, even if there is a flight delay, the container can still be

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plugged and protect the products. According to Ceva Logistics (2021), Active container is also
more secure since the container will be locked during the delivery. Some containers can have
an extended battery run-time of more than 120 hours for shipment (Air France KLM Martinair
Cargo, 2021).
For passive packaging, Envirotainer (2021) defined the passive container cannot adjust the
temperature even if the surrounding temperature is changing. Catizone (2013) said passive
packaging includes usage of dry ice and adding cold packs into insulated design boxes, to keep
the shipment in a suitable temperature. Insulated box is made of polystyrene, polyurethane or
vacuum panels. It can hold in a desired temperature for a specific period of time, i.e., 24, 72 or
96 hours. Rodrigue and Notteboom (2020) claimed that dry ice can be used during the
transportation of cold chain systems. It is because it can keep the perishable goods for an
extended period of time. It is often used when transporting pharmaceuticals.

2.2 Overview of Risk Management in Cold Chain

In general, the supply chain risk management has the four main stages, including risk
identification, risk assessment, risk management decisions and implementation and risk
monitoring (Hachicha and Elmsalmi, 2014). Manuj and Mentzer (2008) also claimed that there
is a five-steps process for supply chain risk management. Identification, assessment and
evaluation, select appropriate strategy, implement strategy and mitigation. The risk occurring
in the supply chain can be divided into two categories, which are disruption and operational
risk. The former is related to natural calamities, terrorist attacks and labor strikes while the
latter is caused by high uncertainty and lack of coordination between supply and demand
(Sreedevi and Saranga, 2017). Van Peteghem and Kabbaj (2015) said that the complexity of
products and the transporting distance are the difficulties when keeping the temperature-
sensitive products in a cold chain system. They also claimed that there is only limited
infrastructure to deliver the products and the extreme weather conditions are also the potential
risk could face in the cold chain. There are five risks in cold chain management that should be
prevented (Sharma, 2018). It includes equipment broken, lack of uniform standard, delivery
risk, human error and theft. According to Lin, Zhao, and Lev (2020), the vaccine is a very
unique drug, which is highly sensitive to the temperature. The vaccines would become useless
after being exposed to the temperature. So, it is a must to keep the vaccine within their specified
temperature range continuously, from the point of production until it is used, in order to
maintain their high quality.

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2.3. Risk management Models and Techniques

Risk management is a decision-making process that begins with a review of all relevant
information, especially from combined risk appraisal, consisting of both risk assessment and
concern assessment where the latter is focused on risk perception studies, economic impact
assessments and the scientific characterization of social responses to the risk source. (Aven and
Renn, 2010) A variety of risk management tools have been developed and employed in the last
decade to control and mitigate the realization of uncertainty and risks to organizations.
However, the emphasis of these methodologie is different, organizations need to follow
different concepts of risk management to envision a complete picture of the level of
organizational risk.

There are three approaches to risk management that integrate Hierarchical Holographic
Modelling (HHM), Enterprise Risk Management (ERM) and Business continuity
planning (BCP) for identifying and assessing risks as well as managing the consequences of
realized residual risks (Ting et al., 2009).

Hierarchical Holographic Modelling (HHM) is helpful for the scalable company to evaluate
the challenging and hierarchical structures. It recognizes the problems of decomposition and
alignment of scalable and complex systems that have more than one hierarchical overlapping
structure in the structure. Each system could have its own risk. Subsystems have a harmonizing
impact on hierarchical risk management and essentially assess the risks of the overall system.
The HHM framework for identifying the risks is shown in Figure 4.

Figure . 4. Hierarchical Holographic Modelling Framework. (Source:Kaplan et al., 2001)

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Enterprise Risk Management (ERM) in business includes the methods and processes used
by organizations to handle risks and seize opportunities relevant to achieving their goals. ERM
provides a risk management framework that typically includes identifying specific risks and
opportunities that are relevant to the objectives of the organization, evaluating them in terms
of probability and magnitude of impact, defining a response strategy, and monitoring progress.
The ERM framework identifies essential components, suggests a common language and
provides a clear understanding of the enterprise risk management direction and guidance.
Therefore, the goals of an entity can be seen in four categories, which are strategic, operations,
reporting, and observance. Also, ERM considers activities at all levels of the organization
including entity-level, division, business unit and subsidiary processes (2018). The ERM
framework is shown in Figure 5.

Figure . 5 COSO Enterprise Risk Management (ERM) Framework

Business continuity planning (BCP) is the process involved in developing a protection and
recovery system for an organization from future threats. The BCP lists the steps a company
needs to take to implement to resume its operation and business. A business recovery plan
assures companies will continue to offer limited service no matter what happens. Otherwise, to
minimize a service breakdown, the company could not be able to respond immediately.

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2.4 Summary
To summarize, a cold chain is essential for temperature-sensitive goods. Every single process
needs to fulfill the requirement of specific temperature for different products. If any delivery
process or handling process cannot meet the temperature requirement, the quality of goods will
be affected or even harm human health. Therefore, the cold chain logistic strategy is important.
Due to the recent pandemic, proper transportation of vaccines is especially important since
vaccines are the key to contain the pandemic. So, keeping the vaccine under cold chain is
critical as well. Hence, this project is going to investigate the possible risks and factors that
may exist in the cold chain delivery of vaccines, so that the cold chain can run smoothly and
be well-monitored. In the project, we will identify the risks and raise some solutions. To prevent
the possible uncertain risk, three risk management approaches, i.e. Hierarchical Holographic
Modelling (HHM), Enterprise Risk Management (ERM), and Business continuity planning
(BCP), can be used to manage the consequences of the existing risks. We will find the suitable
approach for Hong Kong to prevent the risks and discuss it in the paper.

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3. Methodology
The framework of the methodology is demonstrated in Figure 7. There are five main stages,
which are divided into (i) Background study and problem formulation, (ii) Market data
collection , (iii) Possible risk and factor extraction, (iv) Cold chain logistics recommendation
and development, and (v) Cold chain validation and evaluation. The five main stages are
explained in detail as follows.

Figure 7. Framework of Methodology

(i) Stage 1: Background study and problem formulation

It will start from the stage of background study and problem formulation. Referring to the
recent news and relevant organization press release to identify the basic information about
COVID-19 and the type of vaccine has been released, such as the delivery requirement and
limitation. With the reference of previous similar vaccine cold chain reports, the possible
problems and risks in the vaccine cold chain logistics has been identified, followed by project
objective formulation. There will be a literature review to study the related concepts of the
project.

(ii) Stage 2: Market data collection

Since the vaccines have not been launched in Hong Kong yet, we could collect relevant market
data from similar news and reports of other countries. When relevant data is collected, it will
be preprocessed to ensure the data quality and then stored in a newly built database to prepare

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for the data mining analysis. However, the vaccine information is kept updating every day. We
need to keep the latest and accurate data to ensure the following analysis is up to date.

(iii) Stage 3: Possible risk and factor extraction

GeNIe Modeler and decision tree will help in extracting the possible risks and factors of the
vaccine cold chain logistic. To find out all possible risks and factors of a vaccine cold chain,
extract the possible risks and fixed & variable factors that particularly correspond to the Hong
Kong environment.
(iv) Stage 4: Cold chain logistic recommendation and development

After extracting the possible risks and fixed & variable factors that particularly correspond to
the Hong Kong environment, we could deploy a vaccine cold chain logistic plan for Hong
Kong. Also, we would provide some recommendations for the Hong Kong government to
prevent the potential problem occurring.
(v) Stage 5: Cold chain validation and evaluation

After designing the plan, it is not possible to do the simulation test of the cold chain logistic.
Therefore, we could be referring to some similar vaccine cold chain case. There will be a result
analysis of the case study. And we may discuss the designed cold chain logistic plan and carry
it out, such as performance evaluation and the advantages and disadvantages of different
delivery methods.

4. Project Schedule
This project is divided into seven phases, as shown in Figure 8. Phase 1, Background study and
problem formulation , which lasts for four weeks. Phase 2, Market data construction, which
lasts for 2 weeks. Phase 3, Possible risk and factor extraction, which lasts for 2 weeks. phase
4, Cold chain logistic recommendation and development, which lasts for 4 weeks. Phase 5,
Cold chain validation and evaluation, which lasts for 5 weeks. Phase 6, Project presentation,
which lasts in a day. Phase 7, Report, which lasts for a week. At this moment, we are working
on phases 1, 2 and 3, as the blue line shown in Figure 8.

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 JAN - APR 2021 week 1 week 2 week 3 week 4 week 5 week 6 week 7 week 8 week 9 week 10 week 11 week 12 Week 13 Week 14 Week 16

problem identification

Background study and Literature review

problem formulation
Project objective
formulation

Data collection
Market Data
Data preproccessing
construction
Database building

Software：
Possible risk and factor GeNle Modeler
Extraction
Decision Tree

Possible risk and

Cold chain logistic factor analysis
Recommendation and Customized Vaccine
development cold chain logistics
plan

Case study

Result analysis on case

Cold chain validation study
and evaluation
Cold chain
performance
evaluation

Project presentation

Report

Figure 8. Project Schedule

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