Editor’s Note: HERE is a location data and technology platform, moves people, businesses and cities forward by harnessing the power of location. FourKites is a major predictive supply chain visibility platform, delivering real-time visibility and predictive analytics for a network of Global 1000 companies and third-party logistics firms. In this exclusive interview, industry experts shared some insights on how supply chain managers may cope with the ongoing COVID-19 crisis.
Supply Chain Management Review: What do supply chain managers need to keep in mind if tasked with COVID vaccine distribution?
FourKites: Vaccine distribution is a very complex process that touches on global sourcing, local distribution, chain of command and product security, visibility into all transportation modes used to distribute the vaccine and inventory. For every vaccine, the components that go into making the vaccine usable for the patient is astronomical. Gloves, needles, syringes and more must also be distributed, so there needs to be appropriate planning. Also, as with any temperature-controlled pharmaceutical, there needs to be close monitoring to ensure compliance and appropriate transportation.
It is also important to create security controls as the vaccine moves from air freight to road freight to couriers. And there are additional aspects to consider, including how to plan the dunnage return process (waste removal) and other political implications in the event the vaccine comes from another country. From a logistics perspective, one needs to also consider how product is supplied and re-supplied to major metro areas vs. rural parts, which are more complex in terms of distribution and personnel.
HERE: Firstly, supply chain mangers will need to cope with the massive demand and ensure there’s sufficient cold-chain capacity to transport the vaccine. Additionally, in order to keep logistics running smoothly, transport containers will need proper temperature sensing and hardware coupled with complete 24/7 shipment visibility to ensure that vaccines exposed to potential temperature breaches don’t make it into circulation.
SCMR: What are some potential challenges that transporting vaccines will present vs. any other type of good or product?
FourKites: Security, temperature control, potential political/trade challenges, transit times to satisfy product shelf life, and whether carrier capacity within a network will be able to meet the demand.
HERE: Tying back to monitoring vaccine shipment temperature throughout its journey, identifying, flagging, and re-routing damaged vaccine shipments for disposal will be particularly important. In addition to this, Supply Chain Managers will be challenged in root causing the issues that led to the spoilage, but also in quickly back filling this lost supply.
SCMR: Will the supply chain be “armed & ready” to function as needed once the vaccine is available?
FourKites: Pharmaceutical companies and carriers involved in the transportation of vaccines and relevant equipment are already planning for the biggest distribution of vaccines in history. Using advanced analytics and machine learning, companies can have better visibility into the transportation process, so that they can predict and prevent issues. Knowing when a shipment will arrive and where the shipment can face delays will help companies address issues and take corrective, and even predictive, actions. Also, monitoring the condition of the shipment at all times and creating alerts will help prevent damage or spoilage, as well as prevent products from being stolen.
HERE: Unsure. In addition to the transport of the vaccine itself, a surge in demand and transportation for raw materials / ingredients needed to manufacture the vaccine will most likely pose challenges in producing the vaccine. One thing supply chain managers can do now to better prepare is to deeply analyze the networks for all materials and ingredients and identify those with the highest risk of failing.
SCMR: What attributes of the supply chain and logistics operations need to be closely monitored to ensure a safe and timely delivery of the vaccine?
1. Order to receipt lead times from material suppliers
2. Finished goods inventory
3. Perfect order fill rate
4. Carrier performance to required delivery date
5. Customer order lead times and ensuring that the inbound supply will meet the outbound demand
HERE: Refrigerated (“reefer”) transport capacity – the surge in demand for refrigerated transport will most likely exceed current capacity so the sooner capacity can be locked in now the better. Additionally, consistently monitoring things like real-time traffic and weather events and their potential impact to shipping lanes is crucial.
SCMR: How confident are you that the supply chain will be functioning as needed when the time comes?
FourKites: Companies are preparing for it now and are making the necessary investments in technologies that can provide real-time visibility of their freight and appropriate risk management. Typically, they’ll have warehousing and distribution models, they’re securing warehouse space or dedicating capacity as part of their network. We expect to see limited roadblocks in vaccine distribution, but we might see residual effects on non-critical products, similar to what is seen during natural disasters where capacity will support critical aid such as FEMA
HERE: Moderately confident. It really depends to what extent the ENTIRE end to end supply chain is being evaluated, the timing on when a vaccine will be approved for broad distribution to allow for detailed planning, and the availability of proper transport capacity.
SCMR: What are the top 3-5 “must haves” for supply chain managers to focus on in order to safely and efficiently distribute the vaccine?
1) Complete end-to-end visibility with chain of command, from product supply, to inventory on hand, to customer orders, to multimodal distribution through the return process.
2) Security monitoring – being able to identify if there’s a delay, if there’s an off-route alert, and then how do you secure formal hand-offs in the process. If a load is compromised, what is the chain of command and control that’s going on?
3) Transparency to all parties in the supply chain – if you operate in a silo as the manufacturer, that won’t help the end consumer ensure the vaccination is coming. Multi-party transparency and collaboration will be key.
1) Ensure sufficient reefer transport capacity early on so that once vaccine manufacturing is in full swing, manufactures won’t have to worry about a stack-up in inventory and ultimately slow down manufacturing operations because they’ve run out of storage room. – is this different from #2? Can we expand?
2) Temperature reporting technology to identify and react to temp breaches. Vaccines must be kept at a certain temperature, otherwise they will ruin. If there is a temp breach, then supply chain managers must be notified immediately so appropriate action can be taken.
3) Continuously monitored real-time shipment ETA tracking capability to optimize yard and warehouse operations. By knowing precise arrival times of vaccine shipments, yards and warehouses can preemptively allocate resources (people, equipment, etc.) in preparation of shipment arrival in order to minimize dwell and cycle times of trucks hauling vaccine loads.
SCMR: Do you anticipate any key learnings coming out of the COVID vaccine distribution cycle? What do you think supply chain managers and/or manufacturing facilities will learn once the vaccine distribution process is underway or complete?
FourKites: Agility is what separates the average supply chain from the leading supply chains. Supply chain disruptions are a daily occurence, and companies that have the tools to understand their causes and effects will be able to make the most effective and rapid decisions.
Supply chain planning and distribution tools are in the DNA of a majority of complex supply chains. The ability to quickly re-route product to areas of low supply will be critical to keep up with patient demand. Although the overall supply of vaccines may be acceptable at a national level, if you have imbalances of supply at a local level, patients will be unable to receive the vaccine in a timely fashion.
HERE: I think we’ll be able to iron out inefficiencies in existing cold-chain capacity and operations. Most likely, a lot of reefer/cold-chain capacity currently used for food transport will need to be repurposed to distribute the vaccine. However, grocers will still need/want to meet demand for refrigerated / frozen food which will force more efficient use of the available cold-chain capacity in order to meet consumer demand.
I think supply chain managers will be reminded of how important it is to have real-time visibility into the location of goods throughout the supply chain. People are on high-alert for the availability of the vaccine and if there is a hold up due to traffic or weather events, then people need to be aware so they can react accordingly. Knowing the precise location of a vaccine shipment in real time as well as a view into the potential disruptions and delays that shipment will face will be important when the time comes to transport the vaccine.
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]