The ability of a business to recover from an event that negatively impacts the supply chain
Post responses to two original responses posted by other students. Your responses to the posts of other students either agree with, constructively challenge or offer an alternative point of view. There are no minimum length requirements for the replies to other students’ post. However, make sure to substantiate your response with principles, strategies or techniques that were covered in class. Posts must be clear, concise and complete. Response posts have a minimum word count of 200 words. Posts must be clear, concise and in sentence form.
First student post:
The definition of resiliency is “The ability of a business to recover from an event that negatively impacts the supply chain.” (William J. Stevenson). With my very limited experience, I think that for any business to be resilient it needs to concentrate on 3 main areas. The first area will be trying to avoid impacts, the second will be to address the situation quickly and lastly to return to normal.
The first area of avoiding impact should start with risk management and planning. Risk management should be able to identify the risks, their potential of happening, hazards, and the severity of their impact. Next, they should be able to plan for controls to address the issue/event and how to implement those controls. I would say a business should go as far as setting up mock testing to identify if their controls are effective and to work on lessons learned and improvements.
Secondly, businesses should have a supply chain established. They should know their suppliers inside and out and have a developed relationship based on trust and loyalty. A good relationship should include Supply Chain Visibility. This allows for companies to be able to connect in many areas of the supply chain. This also allows companies to monitor and prepare for any unforeseen events that could affect them and/or their suppliers. This also addresses the third and final area because they can use those capabilities to respond to issues, alleviate distress, and return to normal business quickly.
Two issues that decreased the resilience of supply chains in the Health Care industry were the delivery systems and the “Emergency Inventory” provided by the Strategic National Stockpile (SNS). The delivery system was dependent on China to provide most of the supply of N95 masks and gloves, and when that supply avenue failed it crumbled the industry and the ability to keep up with the demand. The SNS failed to prepare and to properly forecast their emergency inventory. No one expected this pandemic and the level of damage that it caused. But as the element responsible for the national response, it should have prepared for the worst-case scenario to reach an accurate prediction of states’ requirements and establish a smooth process for allocating those resources.
First, I would incentivize the production of emergency medical supplies locally. I would push to change the common practice of buying cheaper material overseas because as we can see this strategy is not very reliable in an emergency. Secondly, I would request information from each state and reach out to the medical experts and make them part of the solution and planning process. I would say my suggestions could be very well implemented at every phase of capacity planning; it mainly supports for long-term planning. This is because although this event has already happened the industry needs to prepare for future issues.
Second Student:
A resilient supply chain would be a supply chain that is prepared for unforeseen risks, as well as being able to respond and recover from those unforeseen risks. The goal of a resilient supply chain is to be able to return to its original state, at a minimum, or to even exceed the state prior to any unforeseen risks. A resilient supply chain is able to recover and perform at a satisfactory level to a company’s customers. In the healthcare industry, a resilient supply chain would be incredibly important, especially in the event of a pandemic like we are currently experiencing with COVID-19.
One very important issue that decreased the resilience of supply chains in the healthcare industry was the shortage of N95 respirator masks. In the middle of the COVID-19 crisis, doctors and nurses ran out of their supply of the N95 respirator masks. In the medical field, prior to the pandemic, these masks were meant for single-use protection, and are typically discarded into the biohazard trash can after each use. However, once the demand for the N95 respirator mask reached its peak, some medical professionals were asked to re-use a single mask for an entire day, no matter how many patients they saw. Others were not able to wear one at all. The reason this shortage of N95 respirator masks was so immense was because many of the manufacturers of these masks had outsourced production to China, which hindered medical facilities’ accessibility to them as China was battling the same issues on their end. Because the larger manufacturers had outsourced production overseas, they were able to undercut the price of these masks from American manufacturers. This led to a difficulty landing orders for American companies like Prestige Ameritech, because hospitals always choose the cheapest bid. Had hospitals been ordering from manufacturers who outsource production as well as manufacturers who have American production plants, this shortage could have been minimized. They should have implemented this during the initial phases of capacity planning.
Another important issue that decreased the resilience of supply chains in the healthcare industry was the lack of urgency in regards to detection kits. The Center for Disease Control and Prevention (CDC) was aware of the outbreak in Wuhan in December, but on February 8th it was discovered that one of the three main “probes” in the CDC-designed test, which determine if material is from the coronavirus, was registering false positives. This was the only test that was approved by the U.S. Food and Drug Administration (FDA), even though the World Heath Organization had distributed a quarter of a million tests, which were designed by a German lab and used widely outside of the United States. With these false positives calling into question the reliability of the FDA-approved test, it definitely decreased the resilience of supply chains in the healthcare industry. When it was discovered that the FDA-approved tests were potentially unreliable, medical facilities should have had access and been approved to use the German-designed tests which were widely used elsewhere.
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