Here in the United States, overall efforts to stem the nation-wide outbreak of the COVID-19 coronavirus has to say the least been one on ups and mostly downs.  The United States continues to outpace the world in both coronavirus infection rates and deaths due to this disease.

The previous Administration instituted an approach that basically required U.S. States to respond individually with little federal government leadership or support. Other than the initial procurement contracts from various vaccine developers, there was little federal coordination.  After the push out of the initial shipments of both the Pfizer and Moderna vaccines, one could get the sense that the individual States remained with the challenge of coordinating the logistics, obtaining funding, and attempting to secure and maintain the staffing.

Covid-19 Coronavirus

The Defense Production Act is a measure adopted during the Korean War-era to prioritize deemed supplies of materials critical to the national defense. This includes the issuing of financial loans and supply purchase agreements to expand domestic capacity in certain deemed essential areas. Initially, use of this Act was either studied or selectively implemented, such as the production of human ventilators, but there was no, by our lens, real all-out effort.

Initially what was weekly COVID task force press updates whittled away to sporadic, even as the rate of infection spread skyrocketed in October thru January. The overall sense of control just seemed to disappear from providing a sense of optimism, and more importantly, of someone or specific agencies being held accountable for goals and milestones to support what needed to get done. While news reports lamented in the horrific suffering and daily loss of life, the sense that plans were being coordinated and that healthcare givers were being actively supported at the federal level, did not materialize. While daily news seemed to always have a supply chain perspective as to needed priority of supplies, equipment or services, there was no sense of who is on top of such needs.

As the new Biden Administration takes control, there is already a sense of change.

In January, the White House released a 110-page plan termed the: National Strategy for the COVID-19 Response and Pandemic Preparedness. Among the goals outlined, Goal 4- Immediately expand emergency relief and exercise the Defense Production Act, and Goal 5- Safely reopen schools, businesses, and travel, while protecting workers, each specifically outline supply network objectives and actions.

Among the outlined objectives are:

  • Establishing a COVID National Response Structure.
  • Building clear channels of communication among all major stakeholders.
  • Conduct regular, science-led expert briefings.
  • Lead a coordinated response.
  • Ensure high quality, most timely data is available and tracked.
  • Foster publicly shared data around key response indicators.

The above objectives are awfully familiar to our Supply Chain Matters reading audience because most of them were essential to the initial response to global-wide virus disruption. The notion of “war rooms” or “command centers” was essential to gain the grounding to what areas required the initial attention and to what actions needed to be taken from short- and longer-term perspectives. Such actions became the voice of supply chain for senior management assessments and ongoing decision-making.

On Friday, the biweekly press update from the White House COVID Response task force was televised live, and indeed, the long-awaited voice of the supply chain appeared, and it was great.

Each designated agency administrator provided a capsule briefing of actions being taken. The third speaker was introduced as Tim Manning, Supply Coordinator for the White House’s coronavirus response. Manning is described as a Federal Emergency Management Response (FEMA) staffer with an over 25-year background in supply chain management and emergency logistics.

Manning’s briefing points covered specific areas:

  • Additional efforts to increase overall vaccine supply, with the initial focus on assisting Pfizer to get the highest rating in securing needed additional raw material and equipment supplies to help boost production.
  • An overall plan to make over 60 million termed at-home coronavirus tests available across the U.S. by this summer. This includes investing in six more suppliers to “rapidly surge domestic testing capability” including the constructing new plants and production lines domestically.”
  • Efforts being directed at spurring domestic manufacturing of medical personal protective equipment, especially raw material needed for producing more nitrile gloves in the U.S. Manning termed total reliance on a sourced overseas supply network as totally unacceptable. The goal established is that by the end of 2021, the U.S. would have the capability to produce 1 billion surgical gloves per month. Further announced was an Administration effort to provide the broader availability of N95 grade surgical masks within the U.S. itself, enough to account for half of domestic demand. We speculate that the latter will include the expansion of the supply network of polypropylene based melt blown textile material, a key supply component for producing such masks. Domestic surgical mask producers have long lamented that establishing a domestic supply network requires some assurances that market demand levels will not fall precipitously when the pandemic subsides. That obviously has to be part of this domestic supply strategy.

Thus, in a matter of a few minutes of briefing, the voice representing the end-to-end supply chain was now evident and that sounded good from our lens.

 

What it Means

Within our 2021 Predictions, (Now available for complimentary downloading in our Research Center), Prediction Three puts forth our argument that augmented resiliency in global supply network strategies will be far more a part of business strategy moving forward, as will enhanced end-to-end supply network visibility.  For certain industries, either private or public sector focused, geo-political and national agenda policies will always be an important influence.

For the public sector, COVID vaccine availability and delivery, coupled with the timely availability of medical PPE supply are an obvious top priority. Unquestionably, this is a global emergency. With increasing spread of the virus and now with new mutation variants being discovered, nations have become increasingly concerned regarding the short and longer-term availability of vaccine supplies and the associated logistics for inoculating millions of citizens. Thus, is the reality of the daunting challenges presented in adequate and timely COVID 19 vaccine supply and administration.

While some may jump to the conclusion that this could result in a pure protectionist policy, we would argue otherwise.

Except for vaccine supply networks, the primary reason that PPE or virus testing supply networks ended up being sourced globally was a cost and margin consideration. The need now presented is assurance of supply including acceptable transit times. It is one of augmented safety stocks and adequate inventory replenishment for the national interest. As we have put forth on our many commentaries since this pandemic began, healthcare delivery supply networks must take preference for the success of other industry supply networks to recovery and return to growth.

Readers should not confuse the above with a national strategy that permeates towards more Made in America or a wholesale concerted movement toward more nearshoring. From our lens, new thinking in resiliency implies policy or line-of-business decisions that conclude that adequate supply of vaccine, the marshalling of logistical and medical PPE needs is going to be considered in the national interest.

There may be other industry supply networks that may or may not move in this direction.

Let’s shed the prior biases of sourcing for purely cost considerations and focus more on what supply network resiliency or agility needs to be.

 

Bob Ferrari

 

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