The Interconnected Modern Supply Chain

The Interconnected Modern Supply Chain

The supply chain for medical needs during the pandemic has highlighted the weaknesses of modern global supply chain management.

In lean operations, demand management, procurement management, and fulfillment management are integrally interrelated. The removal of redundancies in the supply chain, the reliance on offshoring, and the lack of a larger safety cushion are part of the just-in-time global supply chain design.

During this pandemic, the just-in-time system has backfired, causing critical healthcare supplies to be insufficient in both quantity and location.


Video Spotlight:


This post is based on The Hill article, Supply chain management is a vital weapon in the war against coronavirus, by Ricardo Ernst and Jerry Haar, April 15, 2020, and the YouTube videos in the Spotlight. Image source: McGraw-Hill Education/Sandra Mesrine

Discussion Questions:

1. The article notes that 95% of surgical masks and 70% of tighter-fitting respirators such as the N95 mask are made overseas, mainly in China.  How does this negatively impact the supply chain in getting masks to hospitals in the United States?

Guidance: Continue reading

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iPhone Production Doesn’t Have To Stay In China

iPhone Production Doesn’t Have To Stay In China

June 30, 2019

The China-U.S. trade war has disrupted traditional supply chains with threatened (and partially implemented) tariffs on hundreds of Chinese exports.  The 25% tariff would impose a severe tax on Apple’s iPhone, its “most profitable product”.

Hon Hai Precision Industry, also known as the Taiwan contract manufacturer Foxconn, is the primary partner for Apple products.  According to their semiconductor division chief Young Liu, Hon Hai has sufficient production capacity outside China (estimated at 25%) if Apple asks its partner to relocate production outside of China.

Such a relocation for final assembly is described as “easy”, but not so the full production of components that go into the final product.  It would likely mean moving other assembly from non-U.S. companies back into China.  Currently, Foxconn is testing quality for mass production of the iPhone XR near Chennai.  Further, there is the future prospect of the Wisconsin plant to further diversify some aspects of the iPhone production.

To date, Apple has not announced any plans for such a change in its production strategy, but further uncertainty regarding the tariffs could change that.


Video Spotlight: Apple Doesn’t Need to Make All iPhones for U.S. in China


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Is the Medical Supply Chain a Risk to National Security?

Is the Medical Supply Chain a Risk to National Security?

March 24, 2018

Previous OM in the News posts have looked at the IV bag shortage in the medical supply chain, and many other shortages of medications and supplies. The causes of the shortages are many, including quality issues at production facilities, and Hurricane Maria’s damage to production facilities on Puerto Rico.

Shortages in this particular supply chain can have deadly consequences, and the risks need to be addressed.

Over the years, the supply chain for medical products and medicines has become very lean, and many items are manufactured off-shore.  The last penicillin production in the US was in 2004.  Only 10% of the generic drugs used in the U.S. are made onshore, and eighty percent of the active ingredients in medications are produced overseas, mainly India and China.

Considering the length of the supply chain, combined with ongoing shortages, does a lean medical supply chain present a threat to national security?

This post is based on the Wired article, Medicine’s Long, Thin Supply Chain, by Maryn McKenna, March 5, 2018. Image source: Douglas Sacha/Getty Images.

Discussion Questions

1. Should the United States Government develop policies to insure that critical medial products and medicine are produced Continue reading

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