With the death toll rising steadily around the globe as a result of the COVID-19 pandemic, people have welcomed the arrival of vaccines. However, just as a light is seen at the end of the tunnel, the World Health Organization (WHO) has warned the coronavirus pandemic might not be the “big one” that experts have long feared. “This pandemic has been very severe,” WHO emergencies chief Mark Ryan said. “It has affected every corner of this planet. But this is not necessarily the big one.”[1] He calls the current pandemic a “wake-up call.” He went on to warn, “These threats will continue. One thing we need to take from this pandemic, with all of the tragedy and loss, is we need to get our act together.” Such warnings are not new. Epidemiologists have been warning governments and the public for decades that another pandemic, like the 1918 Spanish Flu, could have global consequences. In 2015, Bill Gates (@BillGates), founder of Microsoft and philanthropist, “warned that the greatest risk to humanity was not nuclear war but an infectious virus that could threaten the lives of millions of people.”[2] Viral threats are all the more concerning because viruses can mutate very quickly.
It’s a scary world
A couple of years ago, health and science writer Markham Heid (@markhamh), wrote, “Roughly 7.3 billion people inhabit the Earth, and that figure is expected to balloon to nearly 10 billion by 2050, according to United Nations estimates. All those people need places to live and food to eat. And that means recent global rises in urbanization, population migration, and the conversion of natural habitats to agricultural land are all likely to continue — and probably accelerate. From the perspective of virologists and other people who study human disease, those are scary trends.”[3] Of course, viruses are not the only potential threat. Heid notes that antibiotic-resistant bacteria are also raising grave concerns among health professionals. And, with climate change causing permafrost to melt, he notes, “A long-lost virus — something locked for millennia in the arctic permafrost — [could] reemerge. Researchers have already turned up the DNA of a 30,000-year old ‘giant’ virus in the Siberian ice.” The most likely origin of the next pandemic, however, will be a virus that migrates from wild animals to humans. Jared Diamond, a professor of geography at the University of California, Los Angeles, explains, “Covid-19 is certain to have successors. Over the past 10,000 years, we humans acquired most of our infectious diseases from domestic animals. The main source of new diseases in recent decades has been large-scale contact with wild animals. China has closed its wild animal markets in response to Covid-19, but other points of contact remain: wild animal markets in other countries, the use of wild animals for traditional medicines and the African trade in bushmeat. As long as those routes remain open, we’re likely to see more diseases like Covid-19 in the near future.”[4]
Brett W. Johnson (@Brett_W_Johnson), a lawyer at the firm of Snell & Wilmer, notes that back in 2007 the Director of the Centers for Disease Control and Prevention (CDC) stated, “Pandemic influenza is not necessarily imminent, but we believe it is inevitable. And it’s not a question of if, it’s a question of when, so we do have to prepare.”[5] Johnson goes on to note, “In the current environment, U.S. companies face substantial exposure throughout their supply chains. As an example, multiple countries have responded to an outbreak by, among other things, closing schools, cancelling church services and other public gatherings, closing borders, and cancelling travel opportunities. The pandemic impact on business operations is quite noticeable and will have long-term impacts on global trade.” In fact, the pandemic has impacted more than just global trade.
The novel coronavirus pandemic has changed the world and supply chains
Journalists from Bloomberg note, “Economic shocks like the coronavirus pandemic of 2020 only arrive once every few generations, and they bring about permanent and far-reaching change.”[6] They go on to discuss a number of ways the world has changed as a result of the current pandemic. They predict, “The takeover of factory and service jobs by robots will advance, while white-collar workers get to stay home more. There’ll be more inequality between and within countries. Governments will play a larger role in the lives of citizens, spending — and owing — more money.” Like Johnson, Bloomberg reporters note the pandemic has had a big impact on globalization and global supply chains. They explain, “When Chinese factories shut down early in the pandemic, it sent shock waves through supply chains everywhere — and made businesses and governments reconsider their reliance on the world’s manufacturing powerhouse.”
Lora Cecere (@lcecere), Founder and CEO of Supply Chain Insights, predicts the pandemic will create better supply chains. She explains, “This pandemic will define a new age of supply chain management. The sweeping process changes to improve enterprise resiliency will improve the long-term management of global supply chain teams. … This awakening will fuel a redefinition of outside-in supply chain processes (those use market signals not just orders) to align organizations more quickly with market shifts.”[7] She goes on to note, “Prior to the pandemic, the supply chain in most organizations was recognized as important, but not critical. … With the pandemic, there is a new appreciation of managing global teams.”
Preparing supply chains for the next pandemic
Marianne Jahre, a logistics professor and associate dean for the MSc in Business at BI Norwegian Business School, suggests three supply chain management lessons were learned almost immediately from the outset of the coronavirus pandemic.[8] Those lessons were:
1. Build in redundancy. According to Jahre supply chains have become too lean. “We need more redundancy built into the supply chain,” she explains. “They need to make those trade-offs between cost and preparedness.” One way to decide how to make those trade-offs, according to Ron Leibman, head of McCarter & English’s Transportation, Logistics & Supply Chain Management practice, is for companies to prepare or update their continuity of business plans. He states, “Though the concept of supply chain readiness is not new, that does not mean it always has been practiced correctly. Companies must begin now, if they are not doing so already, to test their business continuity plans, with a goal of identifying and correcting weaknesses in the supply chain and updating their plans to avoid future out-of-stock situations.”[9]
2. Create flexible supply chains. One of the first and most impactful lessons learned during the pandemic was the value of having a flexible or agile supply chain. “If this pandemic has taught us anything,” writes Haylle Sok, “it is the importance of adaptability and what the true definition of agility looks like. … It boils down to visibility while clearly understanding and predicting market disruptions. … Unlike past pandemics, modern businesses have a robust technology toolbox readily deployable. Virus or no virus, technology provides more opportunity now than it has ever before for all of us impacted by COVID-19. Technology is the critical and obvious part of the equation.”[10] Jahre also stresses the need for collaboration. “Collaborating with your suppliers is important,” Jahre states. “You can build framework agreements with them than when something significant happens you can access more supplies.”
3. Think cross-functionally. Jahre notes, “We need to have good cooperation along the supply chain, so it’s easy to talk to suppliers and come up with innovative solutions. … If you can tackle these big disruptions better, you are also better able to tackle small disruptions, which are much more common and can be costly.” Cross-functional thinking goes hand-in-hand with better collaboration. Both efforts require good communication. Johnson notes, “Companies need to have communication with the entire supply chain and set reasonable contract performance expectations.”
Concluding thoughts
Early in the pandemic, Gates observed, “The coronavirus pandemic pits all of humanity against the virus. The damage to health, wealth, and well-being has already been enormous. This is like a world war, except in this case, we’re all on the same side. … During World War II, an amazing amount of innovation, including radar, reliable torpedoes, and code-breaking, helped end the war faster. This will be the same with the pandemic. I break the innovation into five categories: treatments, vaccines, testing, contact tracing, and policies for opening up. Without some advances in each of these areas, we cannot return to the business as usual or stop the virus.”[11] We’ve seen unprecedented efforts in the areas of treatments, vaccines, and testing, which has raised hopes that the end is in sight. We must acknowledge, however, that there will be other pandemic wars to fight in the future and the best time to start the fight is now.
Footnotes
[1] Miriam Berger, “Covid-19 ‘not necessarily the big one,’ WHO warns,” The Washington Post, 29 December 2020.
[2] Daisuke Wakabayashi, Davey Alba and Marc Tracy, “Bill Gates, at Odds With Trump on Virus, Becomes a Right-Wing Target,” The New York Times, 17 April 2020.
[3] Markham Heid, “8 New Diseases That Are Coming to Wipe Us Out,” OneZero, 11 July 2018.
[4] Jared Diamond, “The Germs That Transformed History,” The Wall Street Journal, 22 May 2020.
[5] Brett W. Johnson, “International Trade and Disruption of Supply Chains: Risk Management in the Pandemic Age,” JD Supra, 19 March 2020.
[6] Bloomberg, “Ten Ways COVID-19 Has Changed the World Economy Forever,” SupplyChainBrain, 30 December 2020.
[7] Lora Cecere, “The Pandemic Will Create A Better Supply Chain,” Forbes, 23 November 2020.
[8] Bethany Garner, “3 Supply Chain Lessons From The Coronavirus Crisis,” Business Because, 25 May 2020.
[9] Haylle Sok, “COVID-19 Pandemic Forces Industries to Re-think Global Supply Chains,” Global Trade, 10 August 2020.
[10] Ibid.
[11] Bill Gates, “The first modern pandemic,” GatesNotes, 23 April 2020.
