By Bill DuBois, Director Industry, Kinaxis.
You can’t help but notice the significant run on products as people stockpiled in the face of the Covid-19 pandemic. Unfortunately, for the supply chain, it’s not as simple as a single demand spike on a few products. US Senator Josh Hawley warned, “The coronavirus outbreak in China has highlighted severe and longstanding weaknesses in our medical supply chain. This is more than unfortunate; it’s a danger to public health.”
There’s more than one problem facing supply chains. Here are three main areas to think about as we make our way through uncharted territory and prepare for the possibility of a second wave of Covid-19.
# 1 Demand is all over the map
People stockpile items in preparation for the unknown. It’s always good to prepare but it does strain the supply chain. There are the expected spikes in surgical masks, gowns and test kits. There’s also a need to hurry therapeutics, vaccines as well as temporary testing and hospital facilities. All have supply chain implications.
On the other side of the equation, there are the demand slides. With sporting and entertainment events cancelled, travel limited and people self-isolating, the items seeing demand cliffs is extensive. With demand spikes and cliffs, current plans and forecasting methods are of little value.
#2 Supply shortages are inevitable
The life sciences supply chain is the most stressed to deliver medications to patients all over the globe. To start the FDA put a hold on inspections of China’s facilities amid the outbreak.
At that time, the FDA warned of supply shortages. As well, India is blocking 26 active pharmaceutical ingredients (API) and finished products from export, making shortages almost inevitable. At best, companies would be looking at longer lead times. And it’s not that easy to identify and switch to alternate suppliers. There would be a need to review any contractual liabilities, quality issues or regulation impacts.
# 3 Recovery is an unknown
It’s anybody’s guess when things will get back to normal. The unknown is the biggest difference between the Covid-19 pandemic and other major supply chain disruptions.
For example, major weather events like hurricanes and tornados are devastating but as catastrophic as they are, there is usually a glimmer of hope as the recovery process starts. With Covid-19, it is not one problem and there is no end date. There are new levels of demand, supply, inventory and capacity volatility with Covid-19. Supply chains must continue to deal with the normal complexities as well as issues like Brexit, tariffs and ongoing weather events. This is on top of the global pandemic that has no immediate end in sight.
Managing the triple threat
Response and risk management will be a hot topic around boardroom tables all over the world for the months and years ahead as companies take lessons learned to up their supply chain response processes.
As supply chains focus on a response, surprise is the new norm and things are changing daily. Any supply chain participant, from CMOs delivering API, brand owners and even patients need a seamless way to communicate and collaborate on response options and recovery strategies.
Speed is key for pandemic ready supply chains
Collaborating at the speed needed to respond to today’s pandemic is predicated on the assumption you have a single place to collect data, simultaneously execute multiple supply chain functions and collaborate across the globe. Traditional methods are too slow and lack the agility needed for this new chapter of risk and response management.
You need to get answers that you have confidence in, often and fast, and share them for collaborative resolution. This will require life sciences companies bring together all supply chain data into a single source and turn that data into information to drive resolution that will save lives.