conducting these assessments and coordinating system-level
collaboration in a jurisdiction. To familiarize facilities and
their staff, pre-pandemic training and discussions about use
of specific models of stockpiled ventilators and ventilator
allocation scenarios can be conducted.”
Looking to the Future
The world is learning painful new lessons about how
pandemics impact supply chains, and experts say there will
be shifts in how supply chains operate.
“I am positive that there will be changes to the way we
design and operate global supply chains once we emerge from
this pandemic, which is showing us how vulnerable some of
the chains have become,” Bernardes says.
“Compared to H1N1 and SARS, there was little to no
disruption of the supply chain, compared to the incredible
impact that COVID-19 has had thus far in a very short amount
of time,” Giunipero says. “It was barely a blip on the screen.
In 2008 and 2009, the economy was very weak, and everyone
was down economically. But we didn’t see the effect on supply
chain like this, and we also haven’t seen an impact on travel
like this since 9/11. This is very unusual, and more akin to
the Spanish flu pandemic, where we were ill-prepared and
so many people died.”
“There have been similar supply chain disruptions in the
past, but I myself haven’t seen anything like COVID-19,” Aydin
says. “Its scope, in terms of the number of people affected,
the geographical impact, how long it has lasted, seems to
be unique in recent memory.”
Aydin continues, “After every one of these disruptions,
there was a sort of taking stock of how we are managing
risk in supply chains. Until the early 2000s, supply chains
stretched across the globe as manufacturing shifted where
labor was cheap, and they also became leaner, because
stuff sitting in the pipeline can easily become obsolete when
product lifetimes are short, for example, in fashion apparel
and consumer electronics. But many global brands learned
from disruptions like SARS, that disruption to production in
one corner of the world could starve the entire chain from
much-needed inputs. So, in the last two decades an important
buzzword in supply chain management has been resilience. A
resilient supply chain must be able to detect early warning signs
of disruption. And it must respond by shifting production to
alternative sources, so it must have either a diversified supply
base or some contingency plan to utilize backup suppliers.
Of course, for a business to detect that a disruption is on
the horizon, it must have a good handle on what its supply
chain looks like. It’s not enough to know your suppliers, you
must also know who your supplier’s suppliers are, and so on.
Without that kind of detailed map of the supply chain, it is
difficult to know the vulnerable links. Unfortunately, with
something like COVID-19, an epidemic that is affecting large
swaths of the world and threatening to turn into a pandemic,
even the best-laid contingency plans may prove inadequate.”
Professor Tinglong Dai, Aydin’s colleague from the Johns
Hopkins University Carey Business School, confirms, “The scale
of this crisis is unprecedented in modern times. For weeks,
China essentially locked down the entire country. Most of the
factories ceased production and once-bustling cities became
ghost towns. This situation is definitely not something one
could fully anticipate or plan for. Think about the top nine
www.healthcarehygienemagazine.com • april 2020
container ports in the world—seven of them are in China,
one is in Singapore, and one is in South Korea. All these three
countries are now deeply hit by the coronavirus outbreak. The
outbreak affects a wide range of regions from East Asia, which
includes China, South Korea, and Japan, to Southeast Asia, to
Middle East, and to many parts of Europe with Italy as a local
epicenter. Collectively, about one-third of the world’s economy
is being affected. The outbreak is still ongoing.”
Manufacturers, suppliers and distributors could emerge from
the COVID-19 outbreak better positioned to tackle operations
during pandemics in the future.
“This is a crisis moment, but this could well be an opportu-
nity,” Dai says. “In the short term, many businesses, especially
those in the service industries that depend on high customer
volumes, may run into cash flow troubles. Companies that
are more resilient will be able to survive or
even gain market shares. In the long term,
companies should think about turning crisis
management into risk management. Every
major business that is heavily dependent
on suppliers or consumers located in
regions affected by the coronavirus should
think about diversifying their supply bases.
In the long
Executives must get serious about making
term,
companies
their supply chains more resilient and should
should think about
be rewarded for doing so.”
Aydin concurs: “I think this crisis may turning crisis
speed up a trend that was already in place.
management into
The ongoing trade battle between China
and the United States was already causing risk management.”
global manufacturers to rethink their reliance
— Professor
on suppliers in China. If they weren’t acting
Tinglong Dai
before, this situation is probably going to
precipitate action to diversify their supply base. What is special
about China in this context is that if a manufacturer is finding
itself over-relying on suppliers in one particular country, right
now that country is likely to be China. Of course, the answer
should not be moving all your operations out of China and
putting all of them in, say, Vietnam or Bangladesh, where labor
is cheaper for now. That’s how supply chains operated up until
the last couple of decades, with manufacturing chasing low
labor cost. The better solution is to diversify the supply base,
so as to have uncorrelated sources of supply. So that when
one set of suppliers may be down due to a regional problem,
another set might still be in operation.”
Aydin continues, “It bears repeating that even the best
risk-management strategy may not be equipped to handle
something on the scale of COVID-19 in the short run. Even
if a manufacturer diversified its suppliers so that some are
in China and others are in South Europe, that may be of no
help with COVID-19 right now.”
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Ong SWX, Tan YK, et al. Absence of contamination of personal protective
equipment (PPE) by Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-
CoV-2). Infect Control Hosp Epidemiol. March 2020.
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