Life Sciences & HealthcareMarch 23, 2020

5 Ways Covid-19 Response Shatters Supply Chain Rules

When Ambassador-at-Large Deborah Birx, M.D., at a recent White House briefing by…
Avatar John Martin

When Ambassador-at-Large Deborah Birx, M.D., at a recent White House briefing by the Coronavirus Task Force, said it was time for a “push” response instead of a “pull” strategy, she made it clear that supply chain best practices were out the window in a national mobilization against the pandemic. From a push approach of making and shipping in volume without waiting for explicit demand pulls, to sending viral tests out the door before total regulatory signoff, it’s all bets off in one of the biggest supply chain challenges in history.

Just Push It.

Dr. Birx might have had a lot of people scratching their heads in the White House press room and the television audience when she said it was time for push instead of pull in the battle against the coronavirus. But supply chain professionals knew exactly what she meant. Pull is the modern way, letting digital, streamed demand data pull your production and logistics strategy—only make when you see specific signals that someone does or will want your goods, versus building in volume and pushing to the marketplace. Pull is still relevant in demand hotspots—think Kirkland, Washington and New Rochelle, New York—but in general the U.S. mobilization against the pandemic is scale, scale, scale: create huge amounts of the things we need, from masks to sanitizers to ventilators, and flood the nation with the goods.

Rethink Core Competency.

Supply chains work when every partner makes what they are best at, each exchanging their labor and expertise along the chain to final production. That’s being tossed to the wayside today. Spirits distillers are repurposing their lines to make hand sanitizer. President Trump invoked the Defense Production Act, a Korean War authorization, which lets him compel and incentivize businesses to prioritize critical goods that are required for national defense—like automakers retooling their plants to make hospital ventilators.

Bend Compliance Strictures.

Supply chains require rigorous compliance and testing at every stage of the added value process to ensure a quality outcome in the final product. Overrun by demand, the FDA flexed some certification and authorization procedures to enable laboratories to run Covid-19 tests and quickly get new test designs into production. The FDA is also fast-tracking the development, clinical testing and rollout of therapies and vaccines.

Elbow-Bump an Expediter.

Companies have been fine tuning their supply chains to make to demand, to balance inventory and orders and sidestep rush work and express shipping. This means the old-fashioned planning expediter is back in business, using on-the-ground tribal knowledge to adjust to unforeseen demand spikes.

Forget the Math.

Retailers and e-commerce companies are hiring tens and sometimes hundreds of thousands of workers to help get essential goods across the country. It’s unlikely the math whizzes at these increasingly algorithmic firms derived their big round numbers from exact calculation. In times of uncertainty, decisive action is ruling the day.

The only constant is adaptation.

Editor’s note: With unprecedented supply chain shocks, having the right technology landscape to adapt to the uncertain is more critical than ever. Once the immediate fires are put out, forward-thinking organizations must invest in their infrastructure for the next rainy day scenario, leaning on digital transformation to provide the backbone of an agile, connected enterprise.

Read more on Digital Transformation in Production Planning & Scheduling to discover how planners, supply chain managers and production managers can use real-time visibility for short term planning and improved responsiveness.

Looking for more? Download the eBook how your organization can implement supply chain visibility and optimization.

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