COVID-19 Exposes the Fragility of Our Global Supply Chains

COVID-19 Exposes the Fragility of Our Global Supply Chains

A chain is only as strong as its weakest link. What happens when several links are weak?

If you think shortages of consumer products and personal protective equipment are worrisome, think again. Despite prior warnings that pandemics may paralyze our supply chains, we may soon run out of many other goods, including food and critical vaccines. Deep, scattered supply chains and reliance on a few global suppliers have hindered our ability to respond quickly to changes in demand. As it turns out, a lean supply chain may not be an agile one.

Video Spotlight: Making Vaccines

This post is based on the FiveThirtyEight article, How COVID-19 Is Wreaking Havoc on our Ability to Make Things – Including Vaccines, by M. Koerth, April 15, 2020, and the YouTube video, Vaccine Manufacture: It’s Complicated, by GSK, May 4, 2016. Image source: Shutterstock/Ienetstan.

Discussion Questions:

1. What are the current hurdles in the manufacture of vaccines?

Guidance: The hurdles include: ingredient sourcing (thousands of ingredients coming from factories with many tiers of suppliers; limited quantities of materials to meet surging global demand), worldwide shortage of glass since 2015, and heavy reliance on overseas suppliers and manufacturers.

2. What are the potential weak links in global supply chains during a pandemic?

Guidance:  The potential weak links include: pandemic in countries where materials are sourced and components/products are made and shipped; lack of volume and mix (e.g. types of food or toilet paper) flexibility in most production facilities; tight interdependence among supply chain partners and low inventories consistent with lean/just-in-time principles; bullwhip effects exacerbated by overreactions to stockouts; interdependence of transportation and tourism industries; and lower capacity at multiple facilities due to illness. These bottlenecks throughout the global supply chains contribute to their lack of responsiveness.

3. In the future, do you foresee changes in supply chain management and strategy?

Guidance: Supply chain management strategies have focused on quality, cost, and delivery reliability. The next step is to build capabilities to increase flexibility and resiliency. Risks should be assessed, and rigorous disaster management plans involving the expansion of domestic capacity should be developed. Reducing the number of links (each one with a likelihood of failure) and transportation in the supply chains would also increase their reliability. Investments in robust supply chains during times of prosperity will pay off during crises.


Leave a Reply

Notify of