Three Scenarios to Guide Your Global Supply Chain Recovery (SMR)

Even as the business climate remains deeply unpredictable, supply chain leaders should act now to plot their comebacks. These are five steps that supply chain executives should take to develop an effective recovery plan for their business:
Step 1: Identify suppliers in affected regions and estimate TTR by scenario.
Step 2: For each scenario, estimate demand and assess which products and assembly facilities will be affected by these suppliers and for how long.
Step 3: Use the insight from the previous step to determine when and for how long you should shut down, or significantly reduce, manufacturing activities.
Step 4: Determine how to ramp up capacity by focusing on sales and operational planning. Allocate the available capacity and inventory only to products that allow you to achieve your specific objectives during the recovery period.
Step 5: Book logistics capacity as soon as possible.

Q&A: MIT Operations Researcher Talks COVID-19 Vaccination Hurdles

David Simchi-Levi discusses some of the environmental, research, and packaging concerns in supplying populations with a COVID-19 vaccine.

Building Resilient Supply Chains Won’t Be Easy

The pandemic has exposed one of the major weaknesses of many supply chains: the inability to react to sudden, large-scale disruptions. This lack of resiliency has been especially notable in the supply chains of the life sciences, health care, and food industries. The resulting turmoil has generated calls for companies that had offshored production to Asia (and China, in particular) to bring it back home. But this approach is no panacea. For one thing, given the huge size of the Chinese market, most global companies will need to keep a presence there to serve it. For another, since China is now a dominant, if not sole, source, for thousands of items, reducing dependence on it in many cases will take considerable investment and time.

Dozens of coronavirus drugs are in development — what happens next? (Nature)

Drug manufacturers face supply-chain weaknesses and sourcing issues as they ramp up complex production processes to meet global demand.
“Over the past two decades, manufacturers in many different industries have been shifting to a ‘lean’ manufacturing model that reduces the amount of raw materials and finished product they keep in stock. “This was successful in terms of reducing costs,” Simchi-Levi says. “But it increased exposure to risk.”

The global food supply chain is passing a severe test (Economist)

The unsung star of 21st-century logistics is the global food system. From field to fork, it accounts for 10% of world gdp and employs perhaps 1.5bn people. The global supply of food has nearly tripled since 1970, as the population has doubled to 7.7bn. At the same time, the number of people who have too little to eat has fallen from 36% of the population to 11%, and a bushel of maize or cut of beef costs less today than 50 years ago in real terms. Food exports have grown sixfold over the past 30 years; four-fifths of people live in part on calories produced in another country. This happens in spite of governments, not because of them. Although their role has declined, they still sometimes fix prices and control distribution.

We Need a Stress Test for Critical Supply Chains (HBR)

Creating and implementing a stress test for companies in critical industries is possible. It would go a long way toward ensuring that the kind of shortages that have been occurring in the last few months don’t happen again.

What the Coronavirus Crisis Reveals About American Medicine (New Yorker)

Medicine is a system for delivering care and support; it’s also a system of information, quality control, and lab science. All need fixing. I spoke to David Simchi-Levi, an M.I.T. professor who studies supply-chain economics and how enterprises respond to disasters. “Cost is easy to measure,” he told me. “But resilience is much harder.” Simchi-Levi is particularly interested in two variables that could serve as metrics for resilience. The first is the “time to survive”; that is, how long can an enterprise endure when there’s a sudden shortage of some critical good? The second is the “time to recover”: how much time will it take to restore adequate supplies of some critical good? By quantifying each variable under different scenarios, a business can model its ability to recover from a disaster. He told me about floods in Thailand that shut down factories responsible for critical computer and automotive parts. Afterward, some companies expanded their supply lines to other parts of Asia. Having seen the fragility of a tight chain, those companies had now established a network with some spring in it. In the future, their “time to survive” would exceed the suppliers’ “time to recover.”

Private companies address shortages for medical supplies, masks and sanitizer

Startups across the nation and around the world are looking for ways to relieve shortages of much-needed personal protective equipment and sanitizers used to halt the spread of COVID-19.

What Retailers Can Learn From H-E-B’s Coronavirus Strategy

The coronavirus outbreak sent Mercury into retrograde three months early at most grocery stores…except for Texas’s H-E-B.
On Twitter, customers enthuse that H-E-B “has the ’rona in check.” H-E-B shelves are well-stocked. Stores don’t have a Hunger Games atmosphere. H-E-B even has enough food in its warehouses to donate 500,000 meals to Texas food banks. How did H-E-B sidestep the initial chaos other chains faced? The short answer, per Texas Monthly: constant vigilance.

New York Needed Ventilators. So They Developed One in a Month (NYT)

The pandemic inspired an innovative project to design and make a low-cost ventilator in weeks, not years. The hurry-up engineering feat relied on human networks; two in particular stand out. The original design came from a classroom project at the Massachusetts Institute of Technology a decade ago, since upgraded the design in collaboration with outside groups. The other network is the government and business community of New York. The city government took on the role of a risk-taking venture investor, first with a $100,000 research grant and then a nearly $10 million agreement to buy 3,000 of the basic ventilators.

What Everyone’s Getting Wrong About the Toilet Paper Shortage (Medium)

The toilet paper industry is split into two, largely separate markets: commercial and consumer. The pandemic has shifted the lion’s share of demand to the latter. The toilet paper made for the commercial market is a fundamentally different product from the toilet paper you buy in the store. It comes in huge rolls, too big to fit on most home dispensers. The paper itself is thinner and more utilitarian. It comes individually wrapped and is shipped on huge pallets, rather than in brightly branded packs of six or 12.

The Food Chain’s Weakest Link: Slaughterhouses (NYT)

A relatively small number of plants process much of the beef and pork in the United States, and some of them have closed because workers are getting sick. After decades of consolidation, there are about 800 federally inspected slaughterhouses in the United States, processing billions of pounds of meat for food stores each year. But a relatively small number of them account for the vast majority of production. In the cattle industry, a little more than 50 plants are responsible for as much as 98 percent of slaughtering and processing in the United States.

Shoes to Masks: Corporate Innovation Flourishes in Coronavirus Fight (WSJ)

From face shields to vaccines, ingenuity is emerging from surprising corners of the private sector. However, relative to wartime, the amounts of money involved are puny. Viruses, unlike hostile armies, can’t be defeated with sheer brute force. And fast as manufacturers are trying to ramp up production of personal protective equipment and ventilators, they are lagging behind the pandemic, which is expected to peak soon.

How Coronavirus Could Impact the Global Supply Chain by Mid-March (HBR)

Reports on how the Covid-19 outbreak is affecting supply chains and disrupting manufacturing operations around the world are increasing daily. But the worst is yet to come. We predict that the peak of the impact of Covid-19 on global supply chains will occur in mid-March, forcing thousands of companies to throttle down or temporarily shut assembly and manufacturing plants in the U.S. and Europe. The most vulnerable companies are those which rely heavily or solely on factories in China for parts and materials. The activity of Chinese manufacturing plants has fallen in the past month and is expected to remain depressed for months.

A Warehouse Robot Learns to Sort Out the Tricky Stuff (NYT)

At a facility near Berlin of Obeta, an electrical parts company that opened in 1901, a robot using three suction cups at the end of its long arm sifts through parts with surprising speed and accuracy. While it may not seem like much, this component-sorting robot is a major advance in artificial intelligence and the ability of machines to perform human labor.

Brazil’s Shrinking Rainforest Prompts Nestlé, H&M, Others to Shake Up Supply Chains

Brazil’s accelerating deforestation is pressuring food makers, retailers, investors and commodity traders to shake up supply chains in an effort to push back on land-clearing and achieve environmental goals. Nestlé SA, which aims to eliminate deforestation from its supply chain over the next three years, has stopped buying Brazilian-produced soybeans from agricultural trading firm Cargill Inc. after a review couldn’t trace the oilseeds back to specific plantations, raising concerns that they were produced on converted land.

Is the U.S. final mile market size $8 billion or $417 billion?

Estimates of the size of the final mile delivery market in the U.S. vary widely. They are a combination of hard data and expert opinion, which roughly judge the value, number, quantity and extent of the market. The term “final mile” is broadly used to describe the movement of people and products the last leg of transportation from a facility to a final destination, and some estimates include all modes transporting products, commodities, mail and people to both residential (B2C) and business (B2B) premises. Others focus on the store-to-home transportation of very specific goods. Estimates can be limited to goods sold within the U.S. or include cross-border sales with domestic delivery. To account for drop-ship and other forms of e-commerce fulfillment, some estimates include first-mile, middle-mile and fulfillment costs in a first-to-last-mile approach.