Supply Chain Immunity: Overcoming our Nation’s Sourcing Sickness in a Post-COVID World

136 Pages·2023·2.762 MB·English

by  Robert Handfield, Daniel J. Finkenstadt

Synthesis Lectures on
Operations Research and Applications
Robert Handfield · Daniel J. Finkenstadt
Supply Chain
Immunity
Overcoming our Nation’s Sourcing
Sickness in a Post-COVID World
Synthesis Lectures on Operations Research
and Applications
This series focuses on the use of advanced analytics in both industry and scientific
research to advance the quality of decisions and processes. Written by international
experts, modern applications and methodologies are utilized to help researchers and
students alike to improve their use of analytics. Classical and cutting-edge topics are pre-
sented and explored with a focus on utilization and application across a range in practical
situations.
Robert Handfield · Daniel J. Finkenstadt
Supply Chain Immunity
Overcoming our Nation’s Sourcing
Sickness in a Post-COVID World
Robert Handfield Daniel J. Finkenstadt
North Carolina State University Naval Postgraduate School
Raleigh, NC, USA Monterey, CA, USA
ISSN 2770-6303 ISSN 2770-6311 (electronic)
Synthesis Lectures on Operations Research and Applications
ISBN 978-3-031-17183-3 ISBN 978-3-031-19344-6 (eBook)
https://doi.org/10.1007/978-3-031-19344-6
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2022
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To my best friend and my lifelong partner, Sandi.
I am so lucky to be able to live this life with you
by my side. And to the tireless work of our public
sector workers, first responders, and healthcare
workers, as well as defense, federal and state
agencies. Your silent work did not go unnoticed.
Robert Handfield
I dedicate this first book to my childhood
sweetheart, Amy. You make all things possible.
Also, to my late grandma Peak who instilled in me
a desire to learn. Finally, to the men and women
who worked so diligently to respond to the
unprecedented demand of 2020. Many will never
fully understand what you have done. Thank you.
Daniel J. Finkenstadt
Prologue: How We Got Involved
One of the first signs of COVID-19 is a distinct and overwhelming loss of smell. The
patient loses all ability to distinguish between familiar smells, fails to pick up on strong
or pungent odors, and in many cases also completely loses their sense of taste. In 2020
COVID-19 hit the world full force. Sadly, the world had either lost its ability to smell
(e.g., detect) that a global pandemic was coming and could not taste what was coming
and prepare for it. We didn’t pick up on the signals broadcast in public health intelligence
sources, the reports in medical social media, or rumors of disruptions in the manufacturing
and supply chains abroad. We left open critical airline corridors into major cities such as
Chicago, LA, New York, and Atlanta that allowed the disease to spread like wildfire
once infected passengers disembarked into these population centers. This was followed
by geopolitical ideological and economic opportunism; at the same time countries were
shutting borders and halting shipments of critical medical supplies. Indeed, it seemed as if
no one was in charge, and chaos reigned. Command and control government actions were
completely inadequate, and the general populace was left in the dark, wondering what
was happening at every level. Irrational demand and supply behaviors exacerbated an
already untenable situation of social distancing, lockdowns, and crushing medical system
overloads, as patients streamed into ICUs and death rates climbed.
This set of authors had a front-row seat during the national pandemic response, includ-
ing government, health care, supply chain, and manufacturing at all levels from local
municipalities to federal and global efforts. Unfortunately, it wasn’t pretty. We were priv-
ileged to work alongside a multi-functional team of experts and professionals trying to
manage an overwhelming threat on the fly. Many times it was simply a coalition of the
willing taking on roles of massive importance for the health of the world. We are eter-
nally grateful to the men and women who supported this response, and we feel the need
to write a book which seeks to pass on critical lessons learned (and we believe there are)
and hopefully to be better prepared for this type of disaster to ever happen again.
vii
viii Prologue:HowWe Got Involved
COVID-19 is expected to cost the world in excess of $12 trillion through 2024 based
on international monetary fund estimates.1 As of this writing the pandemic has already
cost the USA alone nearly $3.6 trillion.2 More importantly, it has cost over 5.7 million
lives to date.3 We are not claiming that this book could have prevented any monetary
or health impacts from COVID-19. But we remain hopeful that the lessons learned and
insights conveyed within these pages can mitigate (or perhaps even attenuate) this level
of impact in the future for the next global catastrophe. And there will be one. Many
of the issues that have occurred with COVID-19, especially within supply chains, are
not the result of “black swan” events as much as they are from previous “ostrich”-based
strategies.4 That is to say, they are not “one in a million years” events any more, but
can be determined on a much more probabilistic basis and with better preparedness by
making supply chain risk management an on-going part of business strategy and planning.
A caveat is we don’t know what disruptions will occur; but we know there will be more
disruptions because of the world we live in.
It is important that we qualify our ability to speak on these topics before we get too
far along in our observations, studies, opinions, and advice. The lead author, Dr. Rob
Handfield, is a global expert in supply chains and has worked for several decades study-
ing healthcare supply chains. He has over 30 years of experience studying many of the
areas production and logistics that are discussed in this book, which is one of the main
reasons we asked him to join the various federal task forces advising the initial supply
chain and acquisition response in 2020. Dr. Dan Finkenstadt is a life-long defense pro-
curement expert with over 18 years of experience sourcing supplies and services all over
the world from Texas to Afghanistan and a professor of enterprise sourcing and category
management within the DoD. Pete Guinto who supported the two co-authors is also a
defense procurement expert with degrees and practice in healthcare law and respiratory
therapy. Pete was assigned as the market intelligence lead for the Air Force and on DoD
and federal-level supply chain task forces from February to July of 2020. He engaged
Dr. Finkenstadt and Dr. Handfield as advisory experts to aid in the response. During this
period the authors participated in hundreds of meetings and interviews with federal agen-
cies, state agencies, local officials, non-profit organizations, manufacturing organizations,
defense suppliers, healthcare suppliers, hospitals, healthcare workers, logistics personnel
and firms, data experts, journalists, legislative staffs, and others. The authors kept rigorous
notes of these events and interviews and have published extensively on these experiences
1 https://www.reuters.com/business/imf-sees-cost-covid-pandemic-rising-beyond-125-trillion-est
imate-2022-01-20/#:~:text=WASHINGTON%2C%20Jan%2020%20(Reuters),global%20lender%
20said%20on%20Thursday.
2 https://www.usaspending.gov/.
3 https://covid19.who.int/.
4 Steenkamp, J.B.E.M. (2020) Time to Lead: Lessons for Today’s Leaders from Bold Decisions that
Changed History. Fast Company Press.
Prologue:HowWe Got Involved ix
in peer-reviewed journals and professional outlets. This book summarizes those experi-
ences and lessons (some published to date and some not) in an easy to read, consolidated
book for everyday citizens, practitioners, students, and managers. We hope it can shed
some light on these unprecedented events and ways to better manage them in the future.
This book is divided into three major parts: (1) The Disease, (2) Symptoms and
Treatments, and finally, (3) Immunity. We found it both interesting and appropriate
to align the sections of this book with the stages of the pandemic—as you will see,
the metaphors are completely aligned with the events that happened to this nation and
others around the world. In Part I—The Disease, we discuss the specific attributes of
the COVID-19 virus that made it so difficult to contain and manage and introduce
another metaphor—the “commons”—which captures the public health system designed
to control a pandemic. Unfortunately, the government did not manage the commons
well, resulting in many irrational behaviors when it came to healthcare supplies and
services (e.g., hoarding and obfuscation), which further inhibited the ability to respond
to the deadly spread of the virus. In Part II—Symptoms and Treatments , we expand
on the woeful national response that we observed, including gaps in data availability,
communications, and overall governance of the event. We discuss the original design of
the Strategic National Stockpile, based on the original intent of its creators, and discuss
the massive supply visibility problems we observed, using personal protective equipment
(PPE) as a representative case. Also in Part II we discuss specific recommendations
derived from our observations, focusing on improved preparation and response to massive
supply chain disruptions in the future using five major areas of supply chain immunity
concern we developed during our experiences with the COVID-19 response. Finally, in
Part III—Immunity, we highlight example cases of supply chain disruptions since 2020
to demonstrate that the principles in this book do not just apply to the pandemic. Finally,
we provide a new model for decision-making in uncertain, data saturated environments
for use in concert with principles discussed in Part II to bolster supply chain immunity.
But before we get into the solution, let’s describe the problem and review the timeline
of events surrounding COVID-19 in 2020.
Contents
Part I The Disease
1 COVID-19, A Rapidly Evolving Disaster in 2020 ........................ 3
2 Tragedy of the New Commons ......................................... 15
Part II Symptoms and Treatments
3 Slow Response ....................................................... 29
3.1 Vaccine Hesitancy ................................................ 29
3.2 Testing: The Missing Link to Stop the Spread of COVID .............. 32
3.3 The Need for a Testing Strategy .................................... 37
3.4 The Strategic National Stockpile (SNS) ............................. 39
3.4.1 Current Capabilities ........................................ 43
3.4.2 Missing Capabilities ....................................... 44
3.5 Requirements for a Government Response ........................... 45
4 Traceability and Transparency ........................................ 49
4.1 Transparency and Traceability ..................................... 50
4.1.1 Current State .............................................. 50
4.1.2 Future State ............................................... 51
4.1.3 A Supply Chain Spectrum for PPE ........................... 52
4.1.4 Improving Our Vision ...................................... 54
4.1.5 Conclusion ................................................ 56
5 Flexibility and Global Independence ................................... 57
5.1 Flexibility Through Improved Contracting ........................... 57
5.2 Global Independence ............................................. 61
5.2.1 Current State .............................................. 61
5.2.2 Future State ............................................... 62
6 Persistent Market Intelligence ......................................... 65
6.1 Medical Intelligence Signals ....................................... 66
xi