The coronavirus pandemic has caused an unprecedented strain on global supply chains. The United States has experienced shortages of essential supplies like personal protective equipment (PPE), ventilators, medicines, and even food. Shortages continue to arise in unexpected places as each part of the supply chain — including producers, vendors, warehouses, transportation companies, distribution centers, and retailers — struggle to adapt. America must address vulnerabilities and invest in a more resilient supply chain. The problem statements outlined below focus on health as an example that can inform other types of supply chains.

Are you working to build a more resilient national supply chain? We’re interested in connecting with those framing the problem or offering solutions: Reach us at covidx@luminary-labs.com.

How might we strengthen domestic production infrastructure to meet the surge in demand for essential goods during a crisis?

Context

Following a century of leadership, the United States manufacturing industry has significantly declined. This is in large part due to a rise in global trade and multinational corporations moving manufacturing operations to countries such as Japan and China. Over 80,000 American factories have closed and as a result, there is a domestic shortage of skilled workers across the full supply chain — from manufacturing to fulfillment. The U.S. still has a strong manufacturing industry, but it has become increasingly advanced and specialized and supply chains have also been optimized for cost efficiency.  

The coronavirus caused dire shortages of essential supplies and the U.S. was unable to rely on global supply chains to fill the gaps. Large-scale American manufacturers — from distilleries to fashion brands to motor companies — raised their hands to retool and help produce essential goods. However, many struggled to transition factories to produce what we need the most during the pandemic. Additionally, American DIYers, makers, additive manufacturers, and local fabricators raised their hands to locally address the shortage. While the efforts were valuable, these communities are inherently distributed; at times, lack of vetted specifications and a central command led to underutilization and wasted effort. 

Supply chain resiliency requires redundancy: in particular, greater domestic manufacturing capacity to complement global supply pipelines. While the manufacturing industry has traditionally been optimized for cost efficiency, now the entire system must be designed for agility so it can “surge and flex” to meet evolving needs for essential goods and services. Without investment in adaptable manufacturing infrastructure, from factories to workforce, the U.S. will struggle to ensure adequate supply of essential goods when typical supply chains are stretched too thin.

Opportunities

Below are opportunities to boost American manufacturing of essential goods and fortify regional supply chains:

Incentivize more agile factories

• Provide strong incentives for manufacturers to pivot to essential supplies production. Those incentives may include state or federal-level grants, non-recourse loans, or advance purchase commitments.
• Create factory designs that are flexible and enable the factories to quickly and easily repurpose and retool if necessary.
• Encourage commitments from manufacturers that they will repurpose production facilities in times of crises.

Invest in a stronger manufacturing workforce

• Develop practical, affordable, and remotely accessible reskilling and upskilling initiatives for job seekers and recently unemployed workers.  
• Strengthen career and technical education (CTE) at the high school level to develop a steady pipeline of talent in the years ahead.

Mobilize and coordinate local and distributed manufacturers

• Connect makers and grassroots manufacturers with procurement teams to connect, transact, and ensure there is appropriate demand for products.
• Endorse effective open-source product designs and for each, define rigorous quality control processes and provide regulatory guidance. 
• Define regional approaches to manufacturing activity. Approaches may include opportunity zones, stimulus programs, procurement incentives, and local business grants and loans. 

How might we improve essential supply forecasting in times of uncertainty?

Context

The United States relies on projections to predict the demand for essential resources. During times of stability, data collection and advanced predictive models ensure essential supply availability. However, an unexpected increase in demand, coupled with a constriction of global trade due the coronavirus pandemic, led to dire shortages of essential supplies. Since the start of the pandemic, more than 90% of Fortune 1000 companies have had Tier 1 or Tier 2 suppliers affected by the virus. Procurement officers have struggled to predict what parts of their supply chain are most at risk, in part due to an absence of data on suppliers, locations, materials, capacity, and other key metrics. Concurrently, organizations and governments are uncertain where, when, and how many supplies they need. 

Effective forecasting is critical to avoid surprises and build supply chain resiliency. Making a reasonable projection will require well-informed assumptions, backed by the best available data. Forecasting requires comprehensive inventory tracking, burn rate calculations, and supply chain mapping. While these activities are already happening in individual institutions or smaller systems, preventing future supply chain crises will require states and regions — if not the entire country — to collaborate. We will need systems that work together to track risks and anticipate demand so we can adapt quickly and get supplies to areas of greatest need. This means new ways of working, with an emphasis on bidirectional flows of information that benefit all parties while protecting the bottom line.

Opportunities

Below are opportunities to increase the capacity of health systems to forecast shortages:

Rethink data sources and collection methods

• Identify novel data sources and uses of data as early indicators of supply chain shortages, and achieve timelier alerts. 
• Make data collection methods adaptable enough to track inventory in real time and calculate the changing “burn rate” of consumables like PPE, medicines, and reagents. 
• Incentivize inventory data tracking at different levels of specificity; in a hospital, that may mean by floor, by department, by facility, or by location. 

Incentivize data sharing 

• Provide privacy protections and incentives for hospitals and frontline organizations to openly share detailed information about their supply needs without sharing inventory data about individual hospitals.
• Develop and populate an open, centralized database to help organizations track and allocate resources in real time.

Expand supply mapping and use of forecasting tools 

• Encourage individual organizations and localities to conduct thorough mapping of essential supply chains — down to the raw material suppliers — to mitigate risk. 
• Promote trusted forecasting models such as WHO’s Essential Supply Forecasting Tool to prepare for and better anticipate what is needed, where it’s needed, and when to supply it. 

How might we ensure adequate reserves and distribution of essential medical supplies in future crises?

Context

Throughout history, the U.S. government has understood the value of a reserve of critical medical supplies during a crisis. Most recently, the Strategic National Stockpile was established in 2003 to supplement state and local supplies for potential bioterrorism protection and response. Warehouses in multiple locations store antibiotics, vaccines, chemical antidotes, antitoxins, PPE, and other critical medical supplies for a range of emergencies. This stockpile has been used during the pandemic — deploying PPE and ventilators across the country — but as of mid-April, it had distributed 90% of its resources. Additionally, the federal government struggled to align with state and local governments struggled on the proper distribution of these reserves. 

Responding to this pandemic and staying prepared for future emergencies requires significant political and financial commitment. We need to invest in evolving and strengthening our local, regional, and national strategies to build and maintain a greater stockpile that can be tapped when demand temporarily outstrips production capacity. 

To be sure, stockpiles aren’t effective unless reserved supplies are delivered to the right place at the right time. In the early weeks of the U.S. pandemic response, existing decision-making frameworks failed, resulting in price competition, private deals, and uncertainty about accessing needed supplies. To prepare for future crises, the U.S. will need to strengthen its coordinated strategy to build a stockpile that can be used for future, as-yet-unknown crises and ensure equitable distribution.

Opportunities

Below are opportunities to strategically increase and maintain reserves and prepare for how to use those reserves in the future: 

Rebuild a multipurpose emergency supply stockpile

• Allocate funding in national, regional, and local budgets to the development and maintenance of essential supply stockpiles.
• Prioritize the reserve of supplies with a range of potential applications so the stockpile can respond to many plausible emergencies.
• Incentivize public contribution to stockpile through approaches such as public acknowledgement, payment for goods, and preferential access when needed.

Maintain and replenish inventory 

• Implement centralized inventory management and tracking to predict where there may be shortages and where the supplies should be distributed. 
• Sustain and maintain the national stockpile by considering storage requirements and perishability of different types of supplies. 
• Use the Shelf-Life Extension program to test products in the stockpile for stability and return products to commercial markets before they expire.
• Develop replenishment strategies and timelines when supplies are used. 

Define protocols for equitable distribution

• Define clear protocols for how entities may contribute to and draw from a stockpile. 
• Set up an impartial advisory council to oversee distribution of supplies and to adapt protocols as necessary, depending on the nature of the crisis. 
• Develop new ethical frameworks to ensure equitable distribution when critical items are in short supply.