OVERCOMING THE CORONAVIRUS PANDEMIC: A SUPPLY CHAIN MANAGEMENT IMPERATIVE!

April 02, 2020

The Coronavirus pandemic is the gravest “Black Swan” event experienced over a century. 

Nassim Nicholas Taleb described it in his pioneering book, The Black Swan(1), as a large scale unpredictable and irregular event of massive consequence with an infinitesimally low probability of occurrence. One has imagined potential catastrophes of chemical pollution, nuclear radiation, cyber threats, infectious diseases, natural disasters and meteorite collisions, to be some of the Black Swan scenarios. The current pandemic has imposed a Draconian stress test on the global supply chain in terms of its resilience, robustness and fragility to save human lives.

 

Yossi Sheffi advocated in his pioneering book, Resilient Enterprise (2), strategies to overcome vulnerability for competitive advantage but today we face unprecedented challenges of the global supply chain of Life Sciences which links raw material suppliers, drug manufacturers, contract research organizations and manufacturers, distributors, logistics providers, original equipment manufacturers, wholesalers, retailers, pharmacies, hospitals and FDA. What is at stake today is saving human lives where every organization and every individual can make a difference. Let us rise to the occasion!

CALL TO ACTION

The Bio Supply Management Alliance (BSMA), a global alliance of supply chain management professionals in Life Sciences, believes it is uniquely positioned to carry out its responsibility. Its short term agenda includes the following:

  • A weekly “Bio-Intel Newsletter” is being published to be a convenient source of information about the response to the COVID-19 pandemic from the perspective of supply chain management. It also includes interviews with eminent executives in the industry regarding their initiatives to address the problem. We welcome your stories.
  • Webinars are being scheduled by BSMA and its member companies to provide issues and answers. We urge drug manufacturers, suppliers, service providers and academia to utilize this platform.
  • The Annual Conferences to be held on October 22 in Foster City, CA, and on November 14 in Brussels, Belgium, will focus on “Building Resilience in the Supply Chain of Life Sciences to be ‘Antifragile’”. Please submit your articles for potential presentation and panel participation.
  • BSMA is in pursuit of collaboration with the American Association of Precision Medicine (AAPM) and California Association of Life Sciences (CLSA), to bring together the Science, Policy and Supply Chain Management to address certain practical issues in an integrated and holistic way.
  • Council of Suppliers have been given the BSMA Platform to highlight their response to meeting the current challenge as well as adapting to it.

DEMAND-DRIVEN SUPPLY CHAIN

Foremost, the war on the pandemic has been stymied by the need to capture demand signals of infected patients from China to Italy to USA and the rest of the world. Data capture, modeling, analytics and visualizations have proved to be the weapons required for understanding the invisible enemy. The characteristic of “Exponential Growth” has never been truly understood until now when we experience the increase in the number of COVID-19 patients and lives lost.

Visibility in the supply chain has always been the Achilles’ heel and we know that IoT can be a huge enabler. The thermometers manufactured by Kinsa provide an intelligent heat map of potential COVID-19 patients across a million devices that are Internet-enabled. I am wondering how soon the Apple Watch and other devices will generate signals for the infection for predictive modeling, along with Social Media data. It is ironical that the principle of Bull Whip Effect was enunciated with the demand pattern and ordering practice of the commodity of pampers, today the same effect has taken place with toilet paper. This time around, the Bull Whip Effect has been caused by demand as well as supply, at both ends of the spectrum.

SUPPLY CHAIN: A NATIONAL ASSET

Today the concept of a “National Supply Chain” is being recognized as a national asset where allocation of scarce resources is imperative. Inter-dependence and inter-connectedness are the dimensions of the contemporary human society. It is an undisputed fact that for every company of an industry to build manufacturing buffer capacity for Black Swan demands is absurd. The role of the National Supply Chain is to maintain a buffer inventory of products required at different stages of finished goods, work-in-process and raw materials.

Fortunately, the biotech and pharmaceutical industries have maintained astronomical levels of inventory of finished drugs as well as of necessary WIP and raw materials, often in excess of ten months’ supply as a whole. The issue of breaking down the global supply chain to regional ones is worthy of consideration to ensure shorter lead times and faster response to abnormal surge in demand. The concept of Just In Time needs to be revisited to achieve hours for replenishment against the current practice of weeks and months. The practice of many automotive companies to insist on their suppliers to have a hub for sub-assemblies adjacent to their manufacturing facility has merit for other industries as well. We have noticed the deployment of USNS Comfort to provide floating medical facility for the afflicted in the State of New York. The concept of floating capacity for certain manufacturing and service providers has become relevant consideration for the concentration of the US population along the coastal regions.

WORK AND LEARN FROM HOME AND REMOTE SERVICES

Government edicts of Social Distancing and Home Shelter have forced people to work from their homes and students at schools and universities to learn online. It is amazing that the prevalent practices of certain Global IT and Silicon Valley Hi-tech companies have made the transition to work from home productive and desirable. Today there are many service organizations, like Insurance Companies, who have not lost a beat without physical interaction with customers by utilizing their internal communication infrastructure. I would not be surprised that the work split between an office and the home may change for greater productivity and employee satisfaction as an outcome of this pandemic. 

TECHNOLOGY COMES TO THE RESCUE

A fundamental advancement in healthcare may be further realized by Telemedicine and other remote healthcare services where a patient does not have to visit a doctor in the hospital in certain cases. Technology is certainly coming to the rescue by reinvigorating the supply chain with the utilization of Cloud, Digital Technology, Robotics, AI, Machine Learning, Blockchain, Driverless Vehicles and Supersonic Transportation. The result will be more intelligent, responsive and agile supply chains. Similarly, Digital Streaming, Video-Conferencing and Digital Collaboration are providing the steroids for communication and nature of work.

FURTHER ACCELERATION OF DRUG DEVELOPMENT APPROVAL

The Fast Track Act (2014) and Breakthrough Therapy Designation of the Food and Drug Administration are also coming to the rescue of patients as tests, therapeutic drugs and vaccines are being developed with uncommon speed. Phenomenal results have been achieved in reducing the time to test for the coronavirus, from days to minutes. We have witnessed the positive impact of the Fast Track on clinical trials for Cell and Gene Therapy cures and can expect a quantum leap with scientific ingenuity confronting the present crisis.

AN ANTIFRAGILE SUPPLY CHAIN OF TOMORROW IN THE MAKING

Nassim Nicholas Taleb has identified and called “Antifragile” (3) as that category of things that not only gain from chaos but need it in order to survive and flourish. He states that. “Just as human bones get stronger when subjected to stress and tension, and rumors or riots intensify when someone tries to repress them, many things in life benefit from stress, disorder, uncertainty. Antifragility is beyond resilience or robustness. While the resilient resists shocks and stays the same, the antifragile gets better.” The unique opportunity is ours to seize.


REFERENCES

(1)  “The Black Swan – The Impact of the Highly Improbable”, Naseem NIcholoas Taleb, Random House, 2007

(2)  “The Resilient Enterprise -Overcoming Vulnerability for Competitive Advantage ”, Yossi Sheffi, The MIT Press, 2005

(3)  “Antifragile – Things that Gain from Disorder”, Naseem NIcholoas Taleb, Random House, 2014

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