Yossi Sheffi
stated that “COVID-19 has raised the subject of supply chain management to the national level as well as to the most senior executive levels of enterprises. First of all, the subject is covered by all the major newspapers, such as the
New York Times, the Boston Globe and the LA Times
. The impact of the pandemic on the supply chain of the food industry has been reported extensively along with Medical Supply. This is an opportunity to talk about the pharmaceutical medical supply chain. It is its own worldwide corporation. Companies like
Nike, Johnson and Johnson, Flex
and others, have supply chain executives sitting right from the design stage to manufacturing, distribution and satisfying the consumer. How do we not lose this opportunity and make it permanent? I mean from procurement to manufacturing and distributing the product while getting involved in the politics of closing borders and imposing big tariffs which hurt the global economy. Geographical spread is important for de-risking. We can have a lot of influence with Congress. I still remember that the
Canadian Prime Minister Justine Trudeau
crying in disbelief on Canadian television when US Administration imposed tariff on steel because USA deemed to be a national security concern.”
Prashant Yadav
explained, “We also have to do a better job of educating a wider population and, in particular, our local politicians about, how the biopharma supply chain operates? What are its organizing principles? This is essential so that the policy makers at the end of COVID-19 do not reiterate let's make everything in the USA that will hurt supply chain resilience which the political leaders are trying to achieve. Educating them and their constituents that supply chain cannot be constrained by political boundaries, is our responsibility to take on.”
Yossi Sheffi
reaffirmed that “We have to go a step further in confronting the challenges of the existing and emerging supply chain for our colleagues must come together in groups for unprecedented sharing. The supply chain is now less academic and more, more commercial, and we may have a lot of problems cooperating unless we change the narrative. The narrative has to change regarding the political leadership. There are very few things that Democrat and Republican in Congress agree on. The one thing they all agree on is that they all hate China. I would say actions aimed at China are unhelpful. We must make a bigger statement that for APIs, raw materials, chemicals and medical supply the world needs China a lot more than China needs the world. If USA imposes tough tariffs, tough closures, China will suffer but the West will suffer a lot more. Think about that countries you know, China doesn't export medical supplies, and India is similar. On the other hand, consider Germany which thrives on exports. If we close the Chinese, somehow, they have to choose between the American and the Chinese market; they are dead in the water.”
Yossi Sheffi
continued, “We see an increase of nationalism and a lot of politicians that are asking for repatriation or local supplies. But no single country can supply the world products for itself. There is a race in this political battle without a vision on how to fight a global world pandemic which recognizes no borders. It is imperative that we do not recede on globalization.
Fortunately, some agencies like
EFPIA
, the
European Federation of Pharmaceuticals
, have advised governments not to take unilateral, protectionist measures that could exacerbate the problems. There was an announcement yesterday of a new measure, like a due diligence on the way supply chains are operating, which was brought by the issues with Amazon.com. So, it appears that companies will have to go through due diligence. There will be global impact on financial health because every country has to also re-inject its economy. This will impact the supply chain. And there is discussion about a new Marshall plan, which in WW II helped the reconstruction of Europe so that some supplies and capacities can be given help of the government to bring order and resilience in the supply chain. So, we as an organization might also give our role on explaining how our supply chains are global.”
Yossi Sheffi
suggested that “Those of us in the U.S, and Europe, try to learn from supply chain folks in developing countries who face disruptions incessantly. There are more used to work in emergency situations, whether it’ a monetary crisis in Argentina or floods in Thailand. So many of us working in multinational companies must listen to colleagues in China, India, Latin America, Indonesia and Vietnam, to name a few.”
Prashant Yadav
reinforced
Yossi Sheffi’s
view based on his experience with distribution in Africa where a large U.S. retailer, who had acquired an African retail chain, faced the challenge of transferring inventory from one store to another. He mentioned that “Crisis times remind us that there is ingenuity that people use to solve problems of inventory scarcity while relying on supply chain visibility. The logistics guy, who shipped from South Africa to Zimbabwe or South Africa to Zambia, worried about shipments not making through customs. Therefore, he always held some excess inventory in the Zambia store using WhatsApp for supply chain transactions. Inventory visibility doesn't necessarily have to come from a control tower with a large capex and a multi-year implementation cycle.”
On the subject of digital supply chain of Life Sciences,
Yossi Sheffi
observed, “When we talk about digitization, we all talk about block chain optimization or something else. We can start, especially in this period, with the simple stuff, digital documentation. Today you receive orders through EDI and then the driver comes and hands a paper in triplicate for someone to sign and give back. It's like 1950s again! There are so many low hanging fruits before we go to the massive change of the whole IT system. MIT has developed many simple solutions for digitization of the links of the supply chain for immediate results.”
Prashant Yadav
stated, “Suppliers are increasingly using digital tools of a very informal nature. We know from some very large health product distributors who are also contract manufacturers, that given what has happened in the market for face masks and N-95 respirators, they are now bringing on board new suppliers using digital tools in the absence of the ability to do a physical plant inspection and audit in the past. Regulators at the same time are also becoming much more receptive to the idea of digital audits, especially for API manufacturing sites in China and India. One is witnessing supply chain control tower feeding visibility platform.”
BSMA’s advocacy of Supply Chain Management received a boost from the voice of these two stalwarts and a strategic effort is in progress to reinvigorate the Life Sciences industry. They were panelists in the recent BSMA CALL TO ACTION forum, the virtual round table
sequel to the “BSMA-IN -ACTION: ADDRESSING THE HEALTHCARE SUPPLY CHAIN CHALLENGES OF THE COVID-19 PANDEMIC”, held on May 6. Moderating this exceptional round table was our very own
Dave Malenfant
(Advocate in Chief, SCM), heading this strategic effort.
