Who’s to blame for the COVID-19 PPE crisis?

Hi Stewart,

We seem to have all the correct textbook answers until the circumstances deviate from textbook substantially. I sometimes tend to be a bit old school. Networks of strong connections. When the US President confronted the challenge, he used the supply chain in a different way. He went to the "old boy"network. Maybe with a smile, maybe with a threat. I truly wonder if the supply chain will ever work any differently than how you just laid out..

Thanks for sharing.
Jimmy

I agree––not having enough inventory in the right place is a big problem. And, having too much in the wrong place is also a problem. Almost everyone knows that the amount of inventory you need to hold (for consumption or sale) is directly related to the replenishment time (from the supply points). Even the material planning systems most companies use are based on two parameters. Despite the sophistication of these system, they still rely on a simple “min / max” notification system to determine when to order more materials (at the minimum inventory level) and how much to order (enough to reach the maximum level). In many cases, these systems works fine, especially if the JIT system is being driven by actual demand at the consumption point. But, when there are too many shortages, stocks are sold out, and sales are lost, we need to take a closer look at what’s going on. While is difficult to respond to significant spikes in demand, there are three segments of the replenishment time that can be addressed. The first segment is the time until a customer order is placed with a supplier. With today’s technology there is no reason for this time to be longer than a day. The second segment is the production time is takes to make the goods requested. This includes the time an order is in queue waiting to be produced and the actual time to produce the order. With customer orders coming into the suppliers production planning system on a daily basis, this segment of the replenishment time can be much lower than it is today. And, finally the third segment is the time it takes to transport the goods from the manufacturers to the consumption points. With our global network of truck, air, ship and rail options, these modes offer a fairly reliable way to get inventories where they are needed. I wonder if the folks managing the PPE supply chain see it this way?