From time to time, Supply Chain Matters has shared our recommendations as to insightful books, videos or published articles that could provide vale and insights for our readers. On this Sunday, we wanted to share three articles that we garnered a lot of insight.
COVID-19 Vaccine Production Ramp-Up
There are two recent published articles that provide readers a true scope of the challenges and sometimes luck required to successfully ramp-up vaccine development and huge volumes of production in a truly short period of time.
On Scientific American, author Charles Schmidt penned an article, New COVID Vaccines Need Absurd Amounts of Material and Labor. The report explores why industry participants remain scrambling to obtain supplies for hundreds of millions of doses of a type of vaccine that has never been made at such a scale. The report’s opening paragraph states:
“Barely a year ago few people outside of a small network of scientists and companies had heard of mRNA vaccines. Today millions are pinning their hopes on these genetics-based immunizations, which have taken center stage in the fight against COVID. But deficiencies in needed supplies and materials for making the vaccines could lead to widespread shortages, some scientists say.”
A cited expert indicates a challenge that will likely resonate with our reading audience: that each step in the manufacturing process requires raw materials that were only produced at levels needed for clinical research. Producing million of doses under tight time constraints is a far more challenging supply network feat. As one expert is quoted: “There aren’t any facilities in the world that have manufactured mRNA at such large scale before.” Once more, much of the raw materials such as polymerases, is in short supply to begin with. There was no basis for design for supply chain because this is all groundbreaking. The author points out that this is why mRNA type vaccines are not the only option and why is so important to have other vaccine alternatives designed using different production and raw material approaches. From our lens, the important takeaway was that COVID vaccine supply networks, production and distribution indeed need to have one of the highest priorities among a collection of global nations.
Another insightful report was from Bloomberg– BioNTech Supercharges a Factory to Produce More COVID Vaccine. The report focuses on Mainz Germany based BioNTech, partner to Pfizer for the development and volume production of one of the available mRNA-based vaccines. Highlighted is the challenge that in addition to the BioNTech Mainz facility, Pfizer’s three European and U.S. production and one vial filling facilities, along with several other contracted manufacturing partners are not enough to meet the current timetable needs of product demand. This has also led to some political dynamics as EU citizens have been increasingly concerned that vaccine development and production originating in Europe and with the current vaccine shortages across the continent, why more supplies are not being adequately allocated to EU regions. The report goes on to describe a stroke of insightfulness and good fortune.
The co-founder of the German based biotech was already thinking about the challenges of volume ramp-up in April of 2020, when the initial infection rates were rapidly spreading across Europe, and globally. The good fortune aspect was awareness that Novartis was looking to sell its biotech facility in Marburg Germany, once used to produce rabies and other vaccines. The facility reportedly had two bioreactors and 300 highly trained workers. In September of 2020, and with the aid of $453 million grant from the German government, BioNTech consummated a deal to take over the facility, including its workforce. Company management knew that to meet production ramp-up requirements, the Marburg facility needed to be converted and approved for mRNA vaccine production as fast as possible. That turned out to be a rather key decision given today’s ramping global demand levels. Plans now indicate that the Marburg facility will be able to contribute to volume production needs by April of this year. Reading this report, one gets the impression that insight and good fortune will be a key theme as this challenge continues.
The Genius of Tim Cook’s Apple
We highly recommend reading the Bloomberg Businessweek commentary: Tim Cook’s $2.3 Trillion Fortress. (Paid subscription or metered view)
Writers Austin Carr and Mark Gurman provide a highly insightful perspective on how Apple CEO Tim Cook has been able to brilliantly navigate Apple’s belief that consistent annual production of millions of the company’s iPhones was successfully accomplished because of the inherent supply network capabilities among China’s high tech and consumer electronics manufacturers.
Supply Chain Matters has featured many of our own commentaries reflecting on the company’s massive volumes having lots of influence and bargaining power with Asian based suppliers, and we have admired Cook’s political skills in walking a tightrope of geo-political tensions among China and the United States. This report helped this Editor to fill-in what was really happening behind the scenes, especially during the term of the Trump Administration. A passage note:
“Current and former employees, executives and rival companies, and Washington insiders’ credit this to Cook’s shrewd management, equally shrewd politicking, and zero reluctance to wield Apple’s market power.”
The report credits Apple’s ongoing business success with Cook’s initial efforts to source the majority of product production across China that became an era of outsourced manufacturing in massive quantities. That included Cook’s personal relationship with Foxconn Technology founder Terry Gou, which has led to a mutually beneficial and long-standing business and manufacturing relationship. The report credits Cook in helping Foxconn to mature to a manufacturing services provider that could meet the complex and demanding product design and quality requirements of Apple’s smartphone components and finished products.
Even Apple’s own design and manufacturing engineers internally questioned whether production milestones could be achieved given existing time constraints. A former Apple supply executive is noted as indicating that Cook’s strategy was one of “out-Dell-ing Dell” in supply chain efficiencies and minimal inventories. Later, Cook insisted that supply chain operations teams work more closely with product design engineers from the earliest design phases, to ensure design for volume supply chain strategies were adopted.
The report provides a rich variety of events that will help readers to fill-in the supply chain dynamics that were occurring behind the scenes, even as Apple experimented with incorporating more U.S. based production. The authors conclude from their research and various interviews that: “There is no way you can just move away from China, especially at Apple’s volumes.” An interviewed source indicated that even when the COVID pandemic shutdown all international air travel to and from China, Apple was garnered approval to charter private aircraft “to fly hundreds of employees to the country to oversee production and testing and ensure the new models hit before the critical holiday season.”
Even some of the company’s employees reportedly are questioning why their company is so committed to large scale outsourcing of manufacturing given ethical concerns including censorship, alleged labor and human rights violations. The report indicates that Apple’s recent moves to move some production to Vietnam and India are running into scale and quality conformance challenges. The authors conclude that broad based supply network diversification is likely to take years, and that Cook will continue to exercise his adroit political tightrope relationship skills to navigate he company thru the ongoing heightened political mine field that is leading to a decoupling of China and the rest of the world’s high-tech supply networks.
This was a great read and will help you to understand what is likely really happening in Apple’s supply chain management universe.
© Copyright 2021, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.