Healthcare Hygiene magazine April 2020 | Page 35

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.”  References: Koonin LM, Pillai S, Kahn EB, Moulia D and Patel A. Strategies to Inform Allocation of Stockpiled Ventilators to Healthcare Facilities During a Pandemic. Health Security. March 19, 2020. https://doi.org/10.1089/hs.2020.0028 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. Viscusi DJ, Bergman MS, Eimer BC and Shaffer RE. Evaluation of Five Decontamination Methods for Filtering Facepiece Respirators. Ann Occup Hyg. 2009 Nov; 53(8): 815–827. Oct. 4, 2009. DOI: 10.1093/annhyg/mep070 35