April 2020 Archive

April 28, 2020
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.

April 27, 2020
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.”

April 22, 2020
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.

April 21, 2020
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.

April 21, 2020
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.

April 20, 2020
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.

April 20, 2020
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.

April 20, 2020
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.

April 14, 2020
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.