As John Lennon said: IMAGINE!!
Imagine political unrest erupts in some region, threatening more than half of the world’s production of medical instruments.
Imagine a typhoon hits Southeast Asia and hospitals are unable to receive latex gloves required for surgery.
Imagine a pandemic causes a demand spike for medical and health care products, thus a global shortage occurs.
The world’s supply chain is the basis of our global economy, security and health, and the risks thereof are numerous. The five “P”’s - powerful weather, pandemic, political instability, port closures and primary sourcing – can easily cause massive disruption for millions. Take Hurricane Sandy, which destroyed shoreline of New York and New Jersey two years ago. Sandy’s effects were greater than society was prepared for – hospitals were shuttered due to power outages and gas lines (I’m sure some of us were reminded of 1979) prevailed as tankers couldn’t deliver fuel to the ports.
Narrow regional sourcing also sets us at risk. More than half of the world’s production of medical and dental hand instruments is processed in South Asia and 90% of exam and surgical gloves are manufactured in Southeast Asia.
Health shocks present another clear case of risk. Since influenza vaccine production is in the hands of a few multinational companies it is safe to say that there would be an insufficient amount of vaccine during a pandemic. In addition, the increasing resistance to antibiotics will make pandemics more of a likely occurrence than ever before.
What can and should we do? Well, no one can predict the how or when, but a plan should be in place for the disruption that will come. We speak to supply chain resilience, well that must become a reality. Secondly, sound business methods, including investments, a robust global network to ensure flexibility, analysis of past disruptions to reinforce contingency planning and detailed disaster preparedness.
Many believe the e only effective solution is private-private partnerships – during the SARS epidemic Henry Schein received a pressing call from the government of Hong Kong for masks. The ability to deliver on this demand reflects well on the close relationships with transportation partners, government officials and suppliers.
The same type of partnerships must be present when natural disasters strike. Referring back to Henry Schein, who has developed the model of collaborative public-private partnerships; all companies should have or be developing such as plan. When the next disaster takes place do we want to be starting from scratch? Henry Schein has set aside part of their warehouses with pallets earmarked for emergency medical supplies.
No one sector of the supply chain can face these challenges by themselves. Collaborative partnerships, proactive planning, open communications and effective coordination are the solutions. It is not a matter of if, or when, but if we remain passive, it will be how bad...