A healthy supply chain is generally invisible to us as we go about daily life. Behind the scenes, it assures reliable flow of the raw materials, components, and end products that are essential for the economic security of our country, the smooth functioning of government, and the well-being of society as a whole.
When disaster strikes, supply chains can be disrupted, placing vulnerable
populations at risk. But, the coronavirus pandemic is disrupting supply chains worldwide and revealing vulnerabilities on a scale never before witnessed. From shortages of personal protective equipment (PPE) to empty grocery store shelves, we are seeing firsthand the fragility of global supply chains.
- The rapid spike in COVID-19 cases highlighted nationwide shortages of ventilators, test kits, masks, and other PPE, provoking competition between state and federal agencies and forcing us to rely on foreign sources for critical supplies.
- Outbreaks in meat packing plants threaten the food supply, as do mismatches between supply and a reconfigured demand for food. As demand moved from places of business to grocery stores and food pantries, there were reports of crops being plowed under, eggs being smashed, and milk being poured out. At the same time, lines for food support grew.
- As people were instructed to use hand sanitizer and other disinfectants, these products quickly disappeared from grocery shelves. Toilet paper, pasta, and yeast soon followed.
Providing widespread access to tests and vaccines is a looming issue as we consider reopening, as is establishing a national policy for acquiring, stockpiling, and distributing vaccines and active pharmaceutical ingredients. Making supply chains more resilient will help us recover from the current pandemic and help us prepare for future disasters.
The COE COVID-19 Supply Chain Initiative
Because problems of supply chains are of such importance to DHS, the DHS Centers of Excellence (COEs) have a significant role to play. In this context, CCICADA is leading an initiative among the COEs on the COVID-19 supply chain, with collaboration from the Center for Accelerating Operational Efficiency (CAOE) and assistance of five other COEs. The first event of this initiative was a virtual meeting held May 12, 2020 including these seven COEs to discuss major issues involved in this supply chain. For copies of presentations at that meeting, see https://ccicada.org/2020/05/20/ccicada-organizes-coe-covid-19-supply-chain-meeting/
A key factor in the health of supply chains and the resulting economic stability of the country is the ability to identify, mitigate, and effectively and expeditiously recover from disruptions to supply chains. This problem becomes urgent because the country’s supply chains are dependent on global supply chains and because both the domestic and global supply chains can be targeted by malicious actors, forced to reconfigure due to geopolitical events, or, as in this case, disrupted by natural disasters. This urgency has led to the increasing importance of the issues of designing and managing supply chains that are resilient in the sense of being able to recover quickly from disruptions, finding strategies for efficiently and effectively restoring supply chains, and finding ways to protect supply chains from disruption without affecting the healthy flow of commerce. The issues apply to the present disaster, but also to how we can best prepare for future disasters.
This COE Initiative aims to: 1) identify tools and technologies that might be of help with the current pandemic; 2) identify key lessons learned from the current situation that will better prepare our supply chains for future disasters; and 3) identify areas where new tools and technologies can help us be better prepared for future disasters. It aims to take advantage of the varied skills and tools of the network of COEs to develop collaborative efforts in the future.
There are plans to expand the effort to include other COEs in future meetings and to include representatives of government agencies and the private sector in discussions.
May 12 virtual meeting.
The nation has an extensive pharmacy infrastructure. Dave Morton of CAOE discussed ways to utilize the existing pharmacy infrastructure to maximize access to diagnostic testing. Vaccines present a special supply chain problem, according to Bill McLaury of CCICADA. Multiple vaccines have different efficacies. Some have different requirements (e.g., refrigeration). An adaptive distribution strategy is needed to respond to development and production of new vaccines. There are uncertainties in pathogen mutations and outbreaks call for specialized distribution algorithms (who gets what and in what order).
Foods being Destroyed on Farms
To some extent, foods have been destroyed on farms because restaurants and schools are closed. How hard would it be to redistribute things to get food where there is demand? According to Greg Pompelli of the Cross-Border Threat Screening and Supply Chain Defense Center, or, CBTS such things are not that simple.
Much of the milk goes to schools, and shifting the destination would require different kinds of containers. Similarly, vegetables go to institutions, and it is not trivial to convert a 50-lb bag of potatoes to 50 1-lb bags. Moreover, work stoppages due to an infected labor force can severely upset “farm to fork” supply chains that have become extremely efficient and time-sensitive.
COVID-19 reminds us that communications and human behavior are important factors that play into the perception of supply chain vulnerabilities. How does human behavior—panic hoarding of toilet paper for example—play a role? Communications can impact hoarding behavior. For example, CDC recommends keeping a 2-week supply of food at hand and DHS recommends an “additional supply.” But there have been other government complaints that people are creating shortages by buying three or four times as much as usual, and FDA says that people should only buy enough for the week ahead.
Challenges in Rural Areas
Transportation is an overlooked component of the supply chain. Nowhere is it more crucial than in isolated areas such as the U.S. Arctic region, according to Randy “Church” Kee of the Arctic Domain Awareness Center (ADAC) Air carriers provide time-sensitive travel for people and priority cargo and the bankruptcy of a critical rural air carrier shows how vulnerable the transportation system can be. Airfields in the Arctic are small, have limited footprint with challenging weather and limited navigation aids; surface roads are largely void; and most heavy, durable and non-time sensitive cargo moves via water conveyance (ship and barge)—which also faces new challenges since coastal regions and river settlements are vulnerable to weather and physical conditions.
Ransoming a Hospital Treating COVID-19 Patients
Crises offer opportunities for criminals to exploit. Can you imagine attacking a hospital treating patients with COVID-19? Just such an attack, using ransomware, was carried out on a hospital in the Czech Republic, according to Louise Shelley of the Center for Criminal Investigations and Network Analysis (CINA) There are many other criminal efforts under way: illegitimate goods (PPEs, medicines); misinformation campaigns; offers of sham treatments and vaccines; bogus investment opportunities in medical companies; and people impersonating doctors demanding payment for treatment.
Information Technology/Artificial Intelligence: Part of the Problem and Part of the Solution
Fred Roberts (CCICADA) pointed out that information technology/artificial intelligence (AI) provides opportunities to recover from supply chain disruptions but also may be responsible for some of the problems observed during the pandemic. AI is already heavily used in modern supply chains, allowing firms, hospitals, and government agencies to predict future demand more accurately and thus allow for lower inventory and just-in-time restocking. This leaves little margin for unexpected disruptions, leading to severe shortages (e.g., in disinfecting agents). AI allows manufacturers to minimize inventory and get “just-in-time” restocking because they can predict demand so accurately. This is ideal until there is a “black swan” event such as the current pandemic. Does the tradeoff between cost minimization and enterprise resilience need to be rethought? Bill McLaury (CCICADA) thought that technology could be a cross-functional driver that can increase efficiency and responsiveness simultaneously. Tools such as blockchain could help with supply chain visibility and early warnings of impending shortages. Since shorter lead times (faster replenishment) could reduce the dependency on accurate forecasting, we need to develop concepts/tools/models for lowering lead times.
Prepositioning assets/stockpiling is a well-known method to minimize the effect of disruptions in supply chains. The strategic petroleum reserve is a well-known example, but so are CDC stockpiles of medications and private industry stockpiles of manufacturing materials from politically unstable sources.
Bill McLaury (CCICADA) observed that these are issues that COEs are well-positioned to work on. What is an appropriate size for a stockpile of critical materials? What are allocation protocols for drawing on such a stockpile, i.e., what triggers a draw-down, which users receive materials, and in what order? How do costs for storage, for regular inspection of the items in a stockpile, and restocking because expiration dates have come, affect the size of a stockpile? What are tools for making government-private sector agreements to make supplies available to the government when needed? Dave Morton discussed models for distribution of ventilators from the national stockpile that CAOE is already developing.
Sheltering in place has caused widespread unemployment. What will be the impact of three months sheltering in place? Of six months sheltering in place? According to Adam Rose of the Center for Risk and Economic Analysis of Terrorism Events (CREATE), economic modeling tools developed by the CREATE are being used by the center to estimate such employment impacts. Some industries, like meat-packing, are considered essential and have operated throughout the pandemic, but they have also suffered major outbreaks. Milind Tambe, also of CREATE, has developed a detailed agent-based simulation that captures agents acting within different types of industries. Such simulations enable consideration of disease spread with industry-specific policies for prevention together with impacts on economic activity.
Fighting the Virus is Like Fighting A War
Fighting the virus is a bit like fighting a war, and there are analogous questions about resource allocation, logistics, supply chains, etc., according to Milad Siami, Mario Sznaier, and Michael Silevitch of the Center for Awareness and Localization of Explosives-Related Threats (ALERT). Thus war-gaming is a potentially useful tool that could incorporate the effects of actions taken by humans in the loop, due to perception of risk, panic, hoarding, false news; include ways to prevent supply substitution cascading failures; and integrate lifeline systems (financial, power, medical, communications, waste, pure water, gas, etc.).
Reopening the Economy
One critical element to restoring and maintaining supply chains following the COVID-19 pandemic is the availability of healthy and willing workers. But will people be afraid to return to work? Richard John of CREATE described earlier work on flu epidemics and anthrax and people’s decisions about returning to work that emphasizes the importance of risk communication. Adam Rose of CREATE suggested that there will be pent-up demand since people will be saving their money. Fred Roberts of CCICADA noted that there are massive interdependencies among infrastructures that require some to be opened up before others, a problem previously studied at CCICADA for other types of disasters. And Dave Morton described models that CAOE is currently developing to determine triggers for a return to lockdown if there is a resurgence of cases after reopening.