ASSIGNMENT:

• Read
  the provided narrative on the following page, clicking on the
  hyperlinks to understand more about Supply Chain Management and supply
  chains during this pandemic.  Note the highlighted words and phrases.
  
• First, discuss your own personal experiences with supply chains.  What were you NOT able to get during this pandemic?
• Second, discuss what appears to be happening and what might happen in the future in one of the following three supply chains:
  1. PPE (Personal Protective Equipment – masks, gowns, gloves)
  2. medical equipment (i.e., ventilators)
  3. food and fuel
  • Do
    this by breaking down the chosen supply chain into four parts.  Try to
    include answers to those questions highlighted in blue.

1. Marketing – how do organizations connect to and understand their customers?
2. Sourcing – how do organizations connect to and work with their suppliers?
3. Operations – how do organizations transform parts, materials, and labour into goods and services while adding value to them?
4. Logistics – how do organizations move and store inventory

ANSWER

Supply Chain Management During COVID-19: Personal Protective Equipment (PPE) Supply Chain

SCM During COVID-19: Personal Protective Equipment

Introduction

Supply chain management among organizations keeps evolving, changing, and adapting new aspects to match and align with the changing needs and trends of the growing supply chain, especially during this pandemic that has altered the normalcy of previously practiced SCM and supply chain activities. SCM is an integral determinant and driver of organizational performance. Hence, it must be implemented effectively as SCM practices and activities provide organizations with opportunities to maximize performance and the entire supply chain (Duong, et al., 2019). SCM involves planning, coordinating, collaborating, and managing integral organizational activities, including sourcing, procurement, conversion, and logistics with channel partners such as suppliers or third-party service providers. Supply chain involves a connected network between an organization’s processes, resources, and individuals involved in the production and distribution of products to customers (Vitasek, 2013).

This research paper focuses on the effectiveness and occurrences in the PPE supply chains during the COVID-19 pandemic. It is divided into three main sections. The first section describes a personal experience with supply chains theoretically and practically. The second section discusses at length the present and future of the PPE supply chain during and post-pandemic era, ensuring to discuss the four main parts of supply chains: marketing, sourcing, operations, and logistics. The final section concludes the main findings of this paper.

Personal Experience

When explaining my supply chain experience, I would say I have gained substantial knowledge and understanding of supply chain processes, especially the four parts, including effective marketing tools, sourcing and procurement, different operations, and logistics management systems. It has been exciting and partially challenging to study and do extensive exercises and research relating to various organizations and their adopted supply chain processes and management techniques. Acquiring the theoretical knowledge regarding the effectiveness of supply chains and the vital roles they play in determining and driving organizational performance helps and prepares me on the practical journey and application in solving real-world problems. I believe that effective supply chain processes and activities in an organization improve their performances and economies at large. Moreover, they minimize adverse environmental impacts necessary in the modern world due to the global climate crisis. Most importantly, they improve and maximize customer service, satisfaction, and experience. The most challenging aspect encountered in supply chains is finding the unique processes and differentiating factors that leverage an organization’s bottom-line, ensuring economic greening for sustainability and elements that can make an organization’s supply chain more adaptable and flexible.

I have seen many small, medium, and large businesses and organizations closing down, with high-level employee retrenchment and economic/financial crises. The global and national preventive measures adopted to prevent the virus’s quick spread, including social and public distancing, isolation, and international lockdown, have minimized labor providence in businesses with highly constrained customer service. For instance, even though malls have been opened to provide essential services, acquiring enough PPES, including hand sanitizers, has been a struggle. I once visited a mini-mall for almost five days seeking to purchase hand sanitizers. Still, I was always told they are limited, with a further explanation that sourcing and procurement have been overly expensive, or products produced by supplying companies have decreased due to inadequate production labor, increased logistics costs (shipping and distribution), and supply-demand imbalances.

Personal Protective Equipment Supply Chain during COVID-19

Currently, the pandemic seems to be a wake-up call to SCM and supply chains, as the severe disruptions caused by the COVID-19 pandemic has necessitated companies to re-map their supply chains. This re-mapping has involved identifying alternative sources of materials, changes in the assessment of procurement functions, and acquiring better visibility metrics to work diligently to protect their supply lines and entire business operations (Choi, Rogers, & Vakil, 2020). One of the enormous impacts of the COVID-19 pandemic has been on the supply chain for required and necessary PPEs, including masks, gowns, gloves, cleaning products, and disinfectants. Previously and usually, personal protective equipment was most essential and used among healthcare workers to protect them from infections, a critical infection control strategy in healthcare settings. Currently, PPEs are crucial for every person globally, which has improved and, at the same time, challenged the PPE supply chains.

Sourcing

Sourcing includes procurement processes and activities that involve identifying and evaluating potential suppliers for organizations or businesses. Sourcing is attained through contracts or arrangements with suppliers or third-party service providers defining what products are to be procured and on what terms (Vitasek, 2013). Organizations connect and work with suppliers based on evaluations that meet the organizational needs, selecting the most preferred suppliers from the supply market, which can be achieved through single, multiple, or outsourcing strategies. Further, when the most appropriate strategy is selected, negotiations and contractual agreements are developed. If a company has numerous suppliers, it can easily manage them through effective supplier communication strategies using modern communication methods or Supplier Relationship Management (SRM). Through SRM, business relationships between companies and suppliers are enhanced and facilitated, as it controls interactions, evaluates suppliers based on their effectiveness and performance, and selects the most appropriate (Wiget, 2019).

This sourcing function has been disrupted at the corporate, national, and global levels during this pandemic. Simultaneously, the PPE supply chain has thrived and improved over the past months due to the high demand for masks, gloves, respirators, face shields, and gowns, among others. According to the CDC, COVID-19 PPE for healthcare personnel required include disposable full-face shields, approved NIOSH N5 filtering mask, gowns, clean nonsterile gloves, and boot covers (CDC, 2020). For non-medical personnel, masks, cleaning materials, and disinfectants such as hand sanitizers are recommended as safety measures. The production of these PPEs has doubled, and one would expect that the supply chain would thrive due to the demand. Nevertheless, even though the PPE supply chain has improved due to the demand among businesses, healthcare facilities, and the global population, it still has numerous difficulties and challenges. Over the recent past months, we see news headlines showing the extensive shortage of PPEs in hospitals. Some healthcare personnel complain they lack adequate PPEs and ethical dilemmas on assigning PPEs such as respirators to which patients (non-COVID or COVID patients) arise (Cohena & Rodgersc, 2020).

PPE global supply chain has explicitly been disrupted sharply and profoundly, affecting national and corporate sourcing resulting in the shortage of PPEs and difficulties experienced in the PPE supply chain. The biggest contributor to the PPE shortage and presence of PPE supply chain difficulties and strains is the pandemic’s effects on China, the largest contributor, producer, and supplier of PPEs especially face masks. Like the USA, many countries and companies, both private and publicly owned, have been dependent on China to supply high numbers of PPEs such as face masks at lower prices. The USA is the largest importer of face masks, eye protection, and medical gloves. According to the PIIE report, 43% of the world’s PPE imports are from China, being a significant supplier to the EU (50%), USA (43%), and all other countries (43%) (Bown, 2020). Once the pandemic struck, this supply decreased drastically, as China cut back on the export and was categorized as a hot zone of the virus. Having the virus originating from China and being a hot zone and spot, production decreased, and most of the PPEs were used internally to minimize the virus spread. Currently, in-house manufacturing and sourcing have been adopted with internal companies profit and nonprofit, third-party partners taking the responsibility. In the USA, companies such as 3M and Honeywell have been at the forefront to maximize mask production and supply to companies and healthcare facilities. Nevertheless, despite this win and overcoming the global PPE supply chain’s challenges, they are still struggling to maintain and build PPE inventories, with PPE shortage cases.

Countries and healthcare facilities are adopting better and more strategic policies and manufacturing funds to ensure they rely on their production to supplement global, third-party partners and donations sources. Issues of healthcare personnel having PPE shortages have been responded to by innovative strategies such as protocol responses with prominent doctors and physicians appearing physically to attend to emergencies while consultations are conducted virtually. New PPE policies in exceptions and partnerships with new PPE vendors entering the market keep rising, minimizing the sourcing burden and PPE global supply chain constraints, making the future look brighter with both in-house and outsourced preparedness and adaptability. Moreover, countries and companies are adopting increased knowledge of PPE vendor networks, investing in technologies that address and supplement the shortages, re-mapping their procurement by identifying alternative sources of materials, changing assessment of procurement functions, and acquiring better visibility metrics to work diligently to protect their supply lines and meet customer demand (Choi, Rogers, & Vakil, 2020).

Operations

Operations, a critical strategic organizational function in the supply chain, involves daily manufacturing or production of raw materials and labor into finished goods and services being distributed to end consumers. It is crucial for organizations to adopt effective operations management processes, as its goal is to maximize efficiency in the production of goods that fulfill customer needs and enhance their experience (Vitasek, 2013). Organizations transform parts, materials, and labor into goods and services while adding value to them by ensuring the presence of adequate facility, locations; investing and adopting appropriate technologies; determining appropriate and suitable labor; organizing equipment necessary; and establishing the long-term capacity to provide customer needs and meet their demand (Chary, 2019).

The current scenario (earlier pandemic months) of global and national production and supply chain remains disrupted due to the widespread COVID-19 virus. Production patterns have been disturbed thrown into disarray following the safety measures and policies adopted that have resulted in the closure of businesses, constrained labor, and international lockdown. The PPE global supply chain faces similar production disruptions making it exist in one of the most distressing stages. The availability of adequate PPEs globally has been a significant problem with persistent PPE shortages, especially among healthcare personnel. Their availability and production have reduced drastically, with a huge mismatch between supply and demand, material shortages, and delivery delays being recorded. For instance, about 35% of manufacturers have recorded supply chain failure due to the pandemic (Kumara, Luthra, Mangla, & YiğitKazançoğlu, 2020), 73% of SMEs have had labor insufficiency problems, and 50% conducting redundancies and furloughing (BFS, 2020).

Therefore, since the outbreak, the PPE supply chain has not functioned to meet the surging demand with constraints seen in the operations and logistics, including export bans and employment arrangements; organizations have had to re-map their operational activities and processes to become more sustainable, resilient, and adaptable. This aspect makes the future look brighter in the production of PPEs to match the surge of demand the world is experiencing. In cases the COVID-19 vaccine is approved and disseminated, the market for PPEs may reduce as the concentration will be on acquiring virus protection. However, in the meantime, sustainable and future pandemic control and production systems are underway. For instance, some of the leading manufacturing companies outside the PPE industry have been at the forefront of repurposing their production to meet the demand surge. Companies such as Ford and Tesla (Automobile), Airbus (Aircraft), Bacardi (Alcohol), Zara and Gucci (fashion and Apparel), and Indian Ordnance Factory (Defense) manufacturing industries have begun manufacturing respirators, ventilators, surgical masks, hand sanitizers, and masks to help increase production and supply, as supportive systems aiming at overcoming the pandemic impacts (Kumara, Luthra, Mangla, & YiğitKazançoğlu, 2020).

Logistics

Logistics is a strategic function and an integral subsection of the supply chain process involving planning, controlling, and implementing efficient movement, storage, and distribution of goods, services, and essential information forward or backward from the point of origin to the point of consumption to meet customer needs and requirements (Vitasek, 2013). Logistics mostly focuses on the transportation of goods and services from the source to the consumers, including warehousing for inventory storage, which could be the procured raw materials or stored goods awaiting distribution. Upon production, the distribution of finished products can be done through road, rail, air, or shipping (water) transportation to the end consumers through wholesalers or retailers. Effective logistics among organizations has been currently faced with numerous challenges and bottlenecks, especially during the pandemic. The spillover effects of the pandemic, including national and global health policies and safety measures that have resulted in global lockdown, export bans, reduced production, and business closure, have broken transportation links and distribution channels or mechanisms between organizations, suppliers, production, facilities, and customers (Kumara, Luthra, Mangla, & YiğitKazançoğlu, 2020).

Thus, the virus’s continued spread continues to create vulnerabilities in logistics and supply chain extensively with disrupted PPE supply chains that have affected necessary active pharmaceutical ingredients, shipping, procurement, and access to finished products. The reduced production and contribution of China, a powerhouse for the production of about 50% of global PPEs, mainly the masks and supplier of raw materials necessary for the worldwide production of other PPEs, has highly affected logistics among other countries and organizations globally. Due to the closure of some businesses, inclusive of courier and transportation companies, there has been increased confusion and disagreements among companies when effecting the logistics of PPEs, which has resulted in some countries not procuring adequate PPEs for their population (Sharma, Gupta, & Jha, 2020). Like production constraints, logistics constraints have extended the mismatch of demand and supply, making supply availability very low due to the lockdown policies, bans on transportation activities, and labor insufficiencies, further crippling the PPE logistics supply chain.

These logistics constraints have left valuable lessons that PPE providers can learn and change for a better future. It has also necessitated the re-mapping of organizational logistics processes, including adopting adaptable and flexible sustainable techniques. More importantly, in-house (national level) production and equipment have been encouraged widely. Over time we have seen bans and policies being dropped down, being less stringent, and are clearer, allowing for exportation and shipment of this essential equipment, which has lifted a substantial burden for the effective realization of the PPE logistics supply chain (Sharma, Gupta, & Jha, 2020).

Marketing

Marketing involves advertising and promotional activities necessary for marketing organizational products and services. It can be achieved through direct, traditional, digital, and content marketing channels. Companies have adopted customer and market segmentation to understand their target markets and needs for effective and productive marketing, tailoring promotional messages and content that directly target their segments, influencing their purchase behavior. Just like other supply chain activities have been affected, marketing, including brands and marketers, has also been affected positively and negatively by the global upheavals present in the supply chain. The disruptions and changes have been seen in the marketing content and advertising strategies. Since the onset of the COVID-19 pandemic, corporate marketing among healthcare facilities and organizations in the healthcare sectors has grown to meet the influx demand for selling branded PPEs. As the months progress, with third-party partners and companies from non-medical industries changing their manufacturing to produce PPEs, marketing and connecting with customers have grown widely. Organizations have taken the opportunity in chaos to disseminate safety measures and utilization of PPEs among customers to make known their branded manufacturing of PPEs.

To some extent, it does not feel as if the marketing function in the PPE supply chain has been affected negatively; instead, it has been favored. The demand and the dire need for PPEs, especially masks, did and do not require much advertising as people understand the vitality of buying hand sanitizers and protective gear such as masks. The psychological influence and fear created by the virus and information disseminated on the media, including relaying numbers of people infected, deaths, recoveries, and complications, has done enough ‘marketing’ of the need for PPEs among people and organizations. The only challenge associated with marketing in the PPEs supply chain is the increased number of suppliers, price volatilities, and branded equipment present in the market. People or consumers already know the dangers of not having PPEs; however, it feels they have a higher buyer bargaining power when using Porter’s Five Forces. This is because, having known the importance of PPEs, being pushed to have them through the global and national safety measures, and having new and many PPE vendors, they set apart their suppliers by prices. The lower the price, the higher the chances of consumers buying from a particular supplying organization. Therefore, to ensure supply is met, marketing and promotional messages have been developed and tailored to meet specific customer segments, personalizing to maximize brand recognition. In the future, marketing in the PPE supply chain is unlikely to change as it remains mostly digital; with many consumers responding well, it remains data-driven and has prioritized customer experience, service, and satisfaction.

Conclusion

The PPE supply chain has been severely disrupted due to the spillover effects, such as policies and safety measures adopted to prevent the virus’s spread. Procedures such as social and public distancing, global lockdown, export bans, reduced production, and business closure have affected the sourcing, operations, and logistics of PPE supply chains. However, nations and organizations have re-mapped their processes and strategies, adopting more resilient, sustainable, and adaptable techniques in their supply chains. This includes identifying alternative sources of materials, changes in the assessment of procurement functions, and acquiring better visibility metrics to work diligently to protect their supply lines and entire business operations, making them more prepared in the future to combat COVID-19.

References

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