It is hard to think of a more challenging problem: How do you distribute necessary medicines in a developing country lacking infrastructure? That is question tackled by Simon and Jane Berry, two Brits trying to reduce childhood deaths from diarrhea in Africa. Diarrhea is the leading cause of death for children under five — which is tragic since it is not some mysterious disease. It is completely treatable by standard and (in the grand scheme of things) cheap medicines. But you need to get the medicines out to rural areas. The Berry’s solution was a packaging innovation that lets them piggyback on existing, super efficient supply chain. Whose supply chain? Here’s a hint, their not-for-profit is called ColaLife (ColaLife: Turning profits into healthy babies, BBC, Jul 22).
Simon Berry and his wife Jane had come up with a strikingly-simple idea – a package for medicine that slotted into the empty space at the top of a crate of soft drink bottles, fitting neatly in between the bottlenecks.
A dazzling idea, to piggyback the delivery of the diarrhoea medicine for babies onto one of the most efficient distribution systems in the world. Go anywhere and you will find a shop selling Coca-Cola. And the plastic packaging is ingenious – once opened it becomes a measuring device.
Here is what ColaLife’s anti-diarrheal kits look like sitting in the crates.
This is clearly a very clever idea. This means that the cost of moving the medicine becomes essentially negligible. Moving crates of Coke bottles means moving a certain amount of air. Tucking in ColaLife’s kits basically means moving less air. Yes, the weight of the crate goes up but the increase should be negligible in comparison to the weight of a couple dozen glass bottles of Coke.
But it turned out that a clever design was not enough to make this all work.
But when they took their brilliant idea to the Coca-Cola distributors they were asked a perplexing and commercial question that at first they did not really understand.
“What is the value chain of your product?” said the soft drink people. It was a harsh business question for anyone schooled in the economics of aid.
But what the soft drink experts wanted to know was; at which point in the distribution chain would the various people who took part in it be able to make a (small) profit out of their involvement? In other words, clever award-winning stuff with the packaging was only the start.
To get the medicine delivered to every distant village the Berrys would need to do what the soft drink people did – make sure that anyone who handled each local bit of the distribution got a little bit of financial reward.
So the non-profit basically had to pass out a little bit of money to everyone along the way. Ultimately, the kits end up in a village shop where a shop owner can make a few cents selling the product. Stepping back, this makes a lot of sense. At the highest level, Coca Cola has a hundred and one reasons to participate in this. In the world of corporate social responsibility, this has to be pretty low hanging fruit. As I argued above, the extra cost of schlepping the kits with the cola is negligible. But somewhere down the supply chain, these kits have to create a bit of hassle. Someone has to separate the kits from the bottles. Someone has to keep track of inventory. Throwing a little profit to the inconvenienced is then just as important as the packaging innovation.