Enabling a Resilient Supply Chain for our Nation: An IBM Business of Government Report

The last time I wrote a report on pandemic planning for the IBM Business of Government was in 2010 – shortly after the H1N1 pandemic.  In this report, I wrote about the critical need for our country to prepare – indeed the title of the report was “Planning for the Inevitable:  The Role of the Federal Supply Chain in Preparing for National Emergencies.”  In the report, I conducted a “post-mortem” of the “near misses” the country experienced during the short-lived H1N1 pandemic, and it included some critical recommendations regarding developing an appropriate stockpile plan, conducting supply chain risk assessments for critical materials and services, conducting on-going training, and developing appropriate supply chain governance mechanisms.

Unfortunately, it seems like few people in Washington paid attention to the report, as we were woefully unprepared for what was indeed an inevitable occurrence:  a pandemic that created massive shortfalls in healthcare supplies and a complete shut-down of many federal and private sector supply chains that did not have a business continuity plan in place for such an event.

So what did we do?  I collaborated with the IBM Business of Government and a group of private and public sector subject matter experts to conduct a “port-mortem” workshop last November, and developed another report on how we can be better prepared for the next pandemic.  The report is called “Enabling a More Resilience and Shared Supply Chain Strategy for the Nation:  Lessons Learned from COVID-19.  And there will inevitably be another pandemic….it’s not a matter of if, but a matter of WHEN.

The resulting report is much more detailed than the first one, and reflects the insights and thinking of a number of nationally recognized experts who lived through the pandemic.  Specifically, the report reflects on what happened, and comes up with a number of recommendations.  These included the following:

  • Establish a new set of government industrial strategies targeted at supporting a domestic “stop gap” manufacturing capability.
  • Enable visibility among government and distributors into inventory systems, and with fixed “set aside” inventory for government allocation under different conditions of duress. This would require a set of common data standards and a common architecture to create a dashboard and a “control tower” capability.
  • Establish a multiagency materials inventory portfolio stockpile based on in-depth supply market analysis. At a minimum, this should include specialists in the following categories: disposable medical supplies (PPE, gowns, gloves), pharmaceuticals, plastics and resins, medical equipment, biologics, health care personnel, and respiratory products. This could be a virtual stockpile that utilizes existing government storage facilities, such as those at the VA.
  • Develop a “make or buy” set of analyses with recommendations for investment in critical manufacturing infrastructure within the U.S. This should be deployed in conditions of elevated market risk that create extreme exposure to other countries producing the bulk of manufactured supplies.
  • Develop and sustain a medical intelligence signal to provide early warning indicators of health care pathogens and other imminent crises. This enables direct indications of reports of human disease, coupled with indirect indications and warnings, such as official acknowledgement, demand for medical services, and local perception of threat.
  • Monitor conditions across supply markets that include both strategic and tactical components. The tactical element to this function would involve developing contracts with critical private sector providers, to ensure that the government can procure the right materials in quantities aligned with the perceived level of threat identified by health experts.
  • Create a shared service capability staffed with experienced supply management professionals, knowledgeable in developing category strategies for these materials. This team would be tasked with development of category strategies, based on deep supply market intelligence around how to construct strategies to mitigate risk.
  • Create a “national health care monitoring system” with access to an inventory visibility system tied to a “control tower,” with real-time analytics to track the current status of material in critical stockpiles throughout the country.
  • Establish a pandemic planning team to develop demand sensing capabilities, wargaming situations/simulations that inform category strategies, and capacity requirements that span domestic and global sources. The capacity requirements should embed industry standards to create maximum flexibility and increase alternatives in the event of need.
  • Develop a blockchain created by a trusted network of suppliers through a private and secure technology network, that allows instantaneous ordering, payment, and notification of receipt.
  • Use industry experts to improve the integration of medical, production, and supply chain management expertise in an area of the government presently dominated by medical knowledge, which would also improve preparedness of health care supply lines.
  • Develop contracts that require manufacturers to reserve quantities of material to supplement the SNS, along with contractual requirements requiring inventory visibility systems tied to a control tower and blockchain (or other distributed ledger) transaction channels.
  • Consider using an “Other Transaction Authority as a contract vehicle to act rapidly in an emergency. OTAs are a special contractual vehicle used for specific federal agencies to expedite and simplify access to mission-critical technologies, that bypass the complicated and burdensome requirements of the FAR.
  • Develop a board or task force with a predefined governance apparatus from the outset of a crisis. This entity should first meet with affected agencies to define a common mission and enable an interconnected and agile rapid response network, which would require some predefined sourcing agreements.

These insights and more can be found by downloading the report.  I hope that more people (especially in Washington DC) will read it this time around….