The story of the COVID-19 pandemic can be seen as a series of shortages. First, and perhaps most memorably: toilet paper. Then, PPE. N-95 masks. As people turned to baking to pass the time, flour and yeast disappeared from grocery store shelves. On a broader scale, many workers fled jobs in retail, hospitality, education and healthcare in what was termed the “The Great Resignation.” The New Yorker magazine depicted Santa roping in a cargo ship in December 2021, a whimsical take on the supply chain issues complicating holiday shopping. And in early 2022, as the Omicron variant of the virus took hold amid icy weather, grocery store shelves were again bare.
The speakers shared valuable lessons that had been learned as a result of the COVID-19 pandemic. Awareness of supply chain issues is at an all-time high and policymakers and industry leaders are committed to finding long-term solutions. The speakers called for stress tests to identify weaknesses, new process innovation and a shift to a culture of “planned spontaneity.”
“Before the pandemic, a lot of people didn’t know what a supply chain was,” said Shih. Consumers and policy makers alike had a sense that products just appeared on shelves and didn’t think about the complex interplay of raw materials, manufacturing plants, workers, and transportation, on both sea and land.
Simchi-Levi argued that repeated stress tests are key to balancing efficiency and resiliency along the supply chain. Consolidation, offshoring, outsourcing and just-in-time manufacturing boost profits, but also make manufacturers more vulnerable to interruptions. In 2011 the tsunami in Japan and major flooding in Thailand also caused massive delays in the global supply chain, he said. Simchi-Levi noted that suppliers are often overly optimistic about the amount of time it would take them to recover from an unexpected event.
Shih spoke about trends in manufacturing in the U.S. that makes it harder for businesses to quickly respond to major changes. Much of the garment industry and tool-making industry moved overseas in recent decades, which made it impossible for U.S.-based manufacturers to meet the demand for masks and PPE. Domestic manufacturers need support to remain nimble at all times– not just during a crisis, he said. “They need stable business that will absorb their costs, generate cash flow for them and allow them to run during regular times,” he said. Yet Shih cautioned against the call by some politicians to move most manufacturing back to this country.“It’s a mistake to think the U.S. can or should be self-sufficient in everything,” he said. Businesses should focus on process innovation and new process technologies to prepare for future uncertainties.
Tayur discussed the importance of planned spontaneity– innovations that enable manufacturers to adapt to disruptions. Cross-trained workers, machines with multiple capabilities, dual sourcing, multimodal transportation, a flexible network and adding subcontractors or extra shifts as needed help businesses to navigate unpredictable circumstances, he said. “There is a lot of complexity and interaction out there,” he said. “We are thinking about the entire network having to dance as things change.”