Continuity Contributors Supply Chain

Covid-19 Vaccine – Preparing our Supply Chains for a smooth distribution

All companies, including those with no direct or indirect involvement in the production or distribution process of vaccines should be prepared for likely disruptions throughout their supply chains.

Betty A. Kildow, FBCI, CBCP

“The industries that shepherd goods around the world on ships, planes and trucks acknowledge they aren’t ready to handle the challenges of shipping an eventual Covid-19 vaccine from drug makers to billions of people. Already stretched thin by the pandemic, freight companies face problems ranging from shrinking capacity on container ships and cargo aircraft to a lack of visibility on when a vaccine will arrive. Shippers have struggled for years to reduce cumbersome paperwork and upgrade old technology that, unless addressed soon, will slow the relay race to transport fragile vials of medicine in unprecedented quantities.” (World’s Supply Chain Isn’t Ready for a Covid-19 Vaccine, Supply Lines, a daily newsletter By Brendan Murray and Riley Griffin July 24, 2020)

After first reading the above in July, I came across it again this week, almost four months later, as news reports tell us that the release of the first COVID-19 vaccine is on the cusp of becoming a reality. While firm release dates are yet to be announced, long-range planning for what is viewed as the greatest ever supply chain challenge to date has yielded mind-boggling shipping strategies and plans, in the face of pitfalls outlined in the July article. The resulting global distribution process, the scale and complexity of which is unlike anything we have ever before experienced, will require herculean efforts. The urgency has never been greater, and the stakes have never been higher.

All companies, including those with no direct or indirect involvement in the production or distribution process of vaccines should be prepared for likely disruptions throughout their supply chains. Think back to the impacts when the demand for PPE was at its height and the resulting impact on every supply chain link. If you have not already done so, it is time to take a new look at your supply chain and the potential impacts as shipping capacity is pulled away from other supply chain needs to meet the requirements of delivering the life-saving vaccine. Carriers will likely delay other shipments to speed delivery of the vaccine. As it should be.

Be prepared for increased transport costs. With greater demand and lower capacity, it is likely your supply chain will be impacted by higher transportation rates across all modes.

Many companies have already begun planning for the impacts of vaccine distribution related supply delays. All companies need to act on the lessons learned over the past eight months and take steps to mitigate potential negative impacts resulting from the upcoming demands on the global supply chain.

If you have not done so yet, here are some basic steps to take:

  1. Conduct a complete an inventory review – what is on hand (hopefully including some safety stock), and what can be verified as being in transit with a firm delivery date.
  2. Consider reallocating use of stock on hand.
  3. Stay in contact with all suppliers and work with them to identify and implement mitigation measures.
  4. Consider reasonable adjustments to inventory levels.
  5. Review the situation daily. Things continue to change rapidly, and this is not the time to take things for granted or make assumptions that what is true today will not change overnight.

As we move into the holiday season, the accompanying peak shipping season, and the continuation of a year like no other, we are heartened by news of tremendous progress in the development and release of a COVID-19 vaccine. As we welcome and celebrate this great accomplishment, let us all continue to do our part to reduce COVID-19 spread as we prepare to quickly respond to another round of supply chain disruptions.

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