Supply chain resilience through COVID-19 and beyond podcast

Supply chain resilience through COVID-19 and beyond – transcript

Daniel Ridge (DR): The COVID-19 pandemic has challenged the fundamental principles of supply chain management and has thrown into question conventional norms of the way businesses operate, collaborate and, particularly, use the supply chain. Today, I am speaking with the Guest Editors of the special issue "Learning from the Covid-19 pandemic: Planning, controlling and driving change for greater resilience in supply chains" that appeared in Supply Chain Management, an international journal at the end of last year.

Professor Liz Breen is Professor in Health Service Operations at the University of Bradford School of Pharmacy and Medical Sciences where she is also the Director of the Digital Health Enterprise Zone. Professor Claire Hannibal is a Professor of Operations Management at Liverpool John Moores University where she is also Associate Dean for Research and Knowledge Exchange in the Faculty of Business and Law.

The special issue that they co-guest edited brings together eight papers that focus on resilience, sourcing, agility, responsiveness and learning and are drawn on research situated in the UK, USA, Austria, Brazil, India, China, and Thailand.

We are also fortunate to be joined today by the journal’s Editor, Professor Beverly Wagner. Beverly is the Head of the Department of Marketing at the University of Strathclyde in Glasgow, which is ranked number 1 in Scotland and number 3 in the UK, according to the Complete University Guide. In the special issue, she also co-authored the article titled "The power of purpose – lessons in agility from the Ventilator Challenge."

Lastly, we are joined by Dr. Claire Frances Lindsay who is an Associate Professor in Supply Chain at Edinburgh Business School, Heriot-Watt University and Chair of the British Academy of Management Special Interest Group for Operations, Logistics and Supply Chain Management. Claire co-authored the article titled “Supply chain resilience during pandemic disruption: evidence from healthcare.”

Thank you so much for everybody being here, I'm really happy to have everybody to come together like this. It's kind of a unique opportunity. So, I think we'll just dive right into it. So, I think it's best if we begin with Liz Breen and Claire Hannibal, who co-guest edited the special issue.

Liz, prior to the pandemic, the supply chain for many decades was adapting to globalisation as it opened up new markets and new opportunities. The pandemic revealed that perhaps it is a double-edged sword as much of the world is dependent on specific parts of the world for specific products. For example, China and India, much of the world is dependent on the pharmaceutical supplies. Perhaps you can begin by telling us how the strategy of proactively designed the supply chain around globalisation revealed many vulnerabilities to the system.

Liz Breen (LB): If you think about the average supply chain, we tend to think about it as linear, you know, so you've got a number of companies sort of lined up working together. And really, in reality, it doesn't work like that. It's a big, scattered, messy network of lots of connections, lots of dependencies. But actually, because supply chains have developed in that way, it's giving consumers so much more choice. So instead of having to rely on everybody buying from one market, say the UK or Europe, we can go to further flung markets, you know, Asia, Australia, you know, Canada, it gives us so many more opportunities and choices. And as you do with customers, we vote with our feet, we pay out for products, which are from all over the world. We're safe in the knowledge we've actually designed all of these logistics pathways now to receive them. So, the more we opened up the pathways and became more globalised, the more that people really wanted to have those products. Markets were opening up, companies were relocating to other countries, we had lots of new commercial ventures, and it was all okay, really, until it wasn't. And once you start with a massive disruption, in this instance, the COVID-19 pandemic, you realise how reliant we were on logistics’ pathways and logistics aren't really a tangible entity, their roads, their drivers, their trucks, their fuel. And once we didn't have all of those ingredients, then these pathways started disintegrating and started falling apart. So, I think it was a timely reminder that we had really spread ourselves thin with these amazing supply chains globally. But actually, once they started getting attacked and weakened by all of these elements, such as people falling sick, fuel not being available, then we realised, actually, we needed to rethink that it was making us incredibly vulnerable. And that is something that certainly this pandemic has really shone a light on.

DR: We’ll dive into the special issue, I'd like to ask Claire Hannibal to give us an overview of the project. I know that you had a very large number of submissions and you had to narrow this down to eight papers. So, could you tell us about what you were seeking to accomplish in this issue and how you determined that resilience would be a key focal point?

Claire Hannibal (CH): Liz [Breen] and I discussed the potential for a special issue with Beverly [Wagner] around about late spring of 2020, which does seem like a long time ago now, but at that time, it was becoming really clear that the COVID-19 pandemic was going to have a significant impact on the management of supply chains. And if we think back to that time, we were starting to see panic buying, we were seeing empty shelves in supermarkets. Liz [Breen] mentioned, consumer choice. Well, what we were seeing was a restriction in the numbers of products that people could buy, and these sorts of things might have been the first time that consumers had seen this in their lifetimes, and we felt it was really significant. So, we felt it was timely to look at collating high quality research that would help scholars, help managers to learn from the COVID-19 pandemic. And so, to do this, we wanted to capture empirical research and what was important to us, and one of the key criterion for the special issue was that the research had to use empirical data that was collected during the COVID-19 pandemic period. So, in reality, we were looking for data that was late 2019 - early 2020 onwards. And we decided on resilience because we felt that this was a really important focal point related to our aim of fostering learning. And what we could see in early 2020, was that supply chain resilience was really being challenged, again, related to what Liz [Breen] has just discussed. And so, we felt that ground-breaking research that offered important insight into how we could improve resilience would be a really valuable contribution to the field.

DR: We're going to be speaking in a moment about two of the articles which use case studies on health care and ventilator production. But I was hoping you might give an overview of the subjects of some of the other articles that appeared in the issue.

LB: One of the things that obviously I was very impressed about with regard to this special issue was actually the demand for the publications. We were overwhelmed with the response that we got, and the variety of papers that obviously we did receive. And as you've mentioned, we did have to whittle it down to a small select group, that wasn't an easy task to do. But we were very pleased with what we had within the special issue, we find that we had a spread of sectors, that we were able to focus on, a spread of geographical regions as well. One of the papers was on the USA, and other one was on Asia, Australia, certainly the UK were represented with lovely paper and healthcare from Scotland, you know, so we find that actually, we were targeting areas, targeting great subject matter, all of which were definitely worthy of teaching and learning from and sharing really good experience. As Claire [Hannibal] has mentioned, we did specifically request that we wanted empirical data collection, we wanted to actually get to the nitty gritty of the changes that were taking place, we wanted to know what companies had done, what sectors had done to be able to cope, during the pandemic, to be able to amend their supply chains, to be able to be ready and responsive. And our SI [special issue] really allowed us to deliver to that.

DR: What were some of the key findings that you were able to derive from all of these articles coming together?

CH: I think something that really struck me when I look at the articles, and as Liz [Breen] said, we were so pleased with the articles, was, when you look across the articles, there's this commonality around speed of response to this global pandemic; so, speed of response from supply chains to these phenomena that was happening in real time. And this struck me as really important and almost awe inspiring because we've got examples here of supply chains that rapidly refocus their operations, to, for example, offer support by manufacturing much needed equipment, or to use an existing supply chain, to distribute medical supplies where they were needed or food for example. And what is really interesting when you look across these papers, is the collaborative efforts within the supply chain and of equal interest, and I think this is the part that's pretty awe inspiring, between supply chains. So, what we saw was that supply chains that maybe a few months previously on paper would be seen as competitors, were actually coming together to collaborate for the common good. And I thought this was a real source of inspiration for scholars and practitioners in the field, and also a real source of learning.

DR: As I mentioned earlier in the podcast, we're also joined by Professor Beverly Wagner, who's the Editor of Supply Chain Management, an international journal. And she also co-authored the article “The power of purpose—lessons in agility from the Ventilator Challenge.” So, Beverly, as Editor of the journal, you not only had a bird's eye view of the special issue, but also general trends in supply chain research. From what you've seen over the last few years, how has COVID-19 complicated or opened up new avenues of research in the field of supply chain management?

Beverley Wagner (BW): Well, I have actually seen quite a lot of new trends. But just to make sure, I had a look back over the journal publications for the last four years and also in the manuscripts that are currently in review. And what's clear is that there are certain topics that are very important, that have been always there in terms of research growing, but also COVID has actually impacted. So, what we've got is clearly that there's sustainability, which has been a growing trend in supply chain research for some time. And this covers many topics, sustainable business models, product stewardship, the circular economy. Circular economy is clearly something that COVID has made more apparent in terms of organisations looking at the waste and carbon footprints, etc., and be more efficient. The role of impact of technology and digital supply chain transformation is also very high up on research agendas. A few years ago, research was mainly conceptual or case studies. Now we're getting really good empirical papers on use of blockchain, big data analytics, Internet of Things, and other disruptive technologies. However, within these two big trends, there's often an underlying sub-theme of innovation and the role of innovation as supply chains adapt and transform. But it is noteworthy that within these topics, there are many evergreen topics that actually COVID has also brought to the fore. So, scholars are still discussing supply chain relationships, the role of trust, the importance of power, integration, performance, learning, networks, and ecosystems. So, over and above this sort of more general trends, there is a stream of COVID-19 related submissions. Earlier, they were mainly descriptive, but now articles are more reflective and providing really interesting empirical evidence of the impact of the pandemic on the supply chains, both locally and globally. Subject areas include research related to disruption, managing resilience, risk, and vulnerability. The COVID pandemic has highlighted the complexity of supply chains and that they are increasingly interconnected. Recent global shocks have illustrated that firms totally lose visibility and transparency into their own supply chains. This has forced organisations to rethink supply chain practices, enhance levels of transparency, and reconsider concepts such as dual sourcing and supply chain resilience, Lean and Agile, local, and global sourcing. So, all in all, we are seeing the field develop wide ranging research and research interests.

DR: Turning to your article, you and your co-authors use the case study of the Ventilator Challenge in the UK to focus on lessons on agility. Like resilience, agility is a key concept to the overall project of the special issue. And I know this might be kind of a tall order for one question, but I was hoping you could first begin by telling our listeners about the Ventilator Challenge, then about the interviews and research you conducted and perhaps talk about some of the key takeaways from what you found.

BW: At the start of the pandemic, it was predicted that the NHS would run out of medical ventilators. And to mitigate this, the UK Government launched the Ventilator Challenge. It really was a “call to arms” to manufacturers and medical device companies to increase production of existing designs, as well as design entirely new ventilators. The response from the companies and individuals was overwhelming and brought together UK engineering businesses from across aerospace, automotive and medical sectors. Medical ventilators are very complex, multiple component units that must function perfectly in use. The aim of this Ventilator Challenge was to increase at an incredible scale and pace, the production of two ventilator devices. One was an existing design made by Smiths Medical, the Parapac 300, and the other was a design based on existing technology from Penlon. All in all, there were a total of 15 design and supply programs run in parallel during this Ventilator Challenge. Our case study in the special issue is the story of Parapac 300 ventilator manufactured by Smiths Medical. The aim was to increase Smiths production of ventilators from 60 units per week to 140 units a day. This was a huge task, as it was essential not to disrupt Smiths current production and capacity. This required a completely new supply chain. So key consortium members in this consortium were Smiths Medical, Rolls-Royce, Accenture, DHL, PA Consulting and GKN Aerospace. Rolls-Royce procurement team led the procurement of the new Parapac 300 supply chain. They established the sourcing team who used their global networks to identify potential components suppliers. They needed to source millions of component parts; the bill of materials was huge. The ventilator production lines were built from scratch within five weeks, ensuring that they did not upset Smiths current supply chain. This was a monumental task given that the design, manufacturing, and testing ventilators usually take years. The Ventilator Challenge presented a unique opportunity for us to explore the role of the consortium members. We talked to them about their major challenges and how they overcame them and the lessons that they learned. We were extremely fortunate, as one of our co-authors was a Senior Procurement Manager in Rolls-Royce. We interviewed 14 participants who were directly involved in the project. And we also conducted follow-up interviews to ensure respondent validation. Four main themes emerged from this research: the urgency of the context and the need for speed and responsiveness, the complexity of the sourcing and procurement because the final product had to comply with very strict medical standards, the significance of technology in terms of providing visibility of data, analysis and sharing the data with everyone, and the critical role of the culture and the environment were also extremely important to the success of this project. The project was completely unique. Speed was prioritised over cost, risks were mitigated through the formation of a technical design authority, a multidisciplinary team set up by the Department of Health. This was crucial as it monitored and ensured the regulatory QA specifications and testing standards that needed to be maintained. So, in terms of the lessons learned, there were many, but I'm just going to share with you three important lessons learned. One was leadership and empowerment. There was commitment at the highest level of the senior personnel in the consortium. Everyone involved were empowered, buyers worked on the basis of their expertise and judgment. There was a lot of passion, a huge amount of self-worth, satisfaction, and esprit-de-corps with everyone involved in the project. The technology - In the Ventilator Challenge an off-the-shelf ERP system was deployed. This provided immediate functionality without lengthy set up times. A Cloud-based control tower supported efficient real time collaborations. This enabled a rapid and coordinated response to problems that were visible to everyone. And the people - This project was undertaken, while the entire UK population was in lockdown. Saving lives and helping the nation underpinned the motivation of the people who have participated in this project. Overall, our article demonstrates that optimisation of speed, flexibility and responsiveness supports the adoption of an agile approach. The importance of collaboration, and an agile mindset are all clearly emphasised in our Ventilator Challenge case study.

DR: The second article that we'd like to discuss is one that Dr. Claire Francis Lindsey co-authored, titled ‘supply chain resilience during pandemic disruption: evidence from health care’. I think in terms of the general public's awareness of the supply chain, the lack of PPE and the race to get a vaccine have been treated widely in the media. However, what's interesting about the article, is it offers a case study consisting of interviews with public sector supply chain actors in the health care personal protective equipment supply chain. I know that in your interviews you cover a lot of areas, but I was hoping that you could tell us about who you interviewed and about some of the key findings you discovered in your research.

Claire Francis Lindsey (CFL): We purposefully targeted those who were working specifically in PPE supply at this time. Procurement teams are quite often small, so this wasn't about numbers, this was about the expertise of those people who were actually working to secure PPE. Obviously, you'd mentioned PPE hitting the headlines: we had reports from the World Health Organization at the end of January 2020, about the fact that there are real challenges in securing PPE at that stage. And really, when the pandemic hit, and we all went into lockdown around the 23rd of March, obviously, we're starting to see COVID exploding on a global scale. So essentially, there was a PPE category manager who had been working in PPE supply but given that we saw astronomical levels of PPE been required, people were seconded into PPE category management, so we interviewed a total of three category managers. We also interviewed a project manager who had also been seconded into the PPE supply chain in terms of securing additional facilities for PPE distribution. We spoke to a senior manager, because obviously they oversee the team as well and have much more of a strategic view of National Services Scotland, who our case study is based on. And really, we wanted to understand where resilience was evident and how they had been able to respond to the PPE crisis. Those interviews actually identified another couple of respondents within the PPE network, because we discovered that through the meetings that were actually taking place between National Services Scotland, Scottish Government, and also Scottish Government supported enterprises (which we refer to as QUANGOs) there was a regular PPE supply meeting. And of course, our project came up at one of these meetings and raised an opportunity for us to actually interview a Scottish Government Minister, who was actually part of these meetings. So, what this led us to do was understand the government perspective, it led us to understand what National Services Scotland actually undertook in terms of PPE supply, and how to manage the crisis, but also let us understand the linkages where collaborative activities were very much evident. And this actually linked into one of our key findings, because although we had seen lots of research on supply chain resilience over the years, we saw that there was a lot of fragmented terminology, we saw the fact that there was a lot of conceptual rather than empirical research papers, and we knew that there was some dimensions of supply chain resilience, such as agility, such as collaboration, such as redundancy, for example, but what we wanted to understand was how that was evident in practice within healthcare. And we'd seen debates about collaboration being a key to supporting resilience in terms of the existing supply chain, but specifically in our work, we saw that collaboration and these new collaborative activities such as government agencies that were supporting PPE supply as time, meant that National Services Scotland were actually able to demonstrate degrees of resilience. It meant there was no stockouts in terms of PPE in Scotland, but it also meant the formation of new supply chains and new supply chain partnerships. We saw the reorientation of Scottish manufacturing organisations, for example, diverting from business as usual to moving into PPE supply chain. That also gave us much more of an economic impact in terms of procurement in Scotland, and we saw this reshoring back to Scotland, rather than a dependency on China. Given the volumes that we were looking to secure and basically the global competition for PPE, we were able to use government agency to identify where we had actually been able to identify suppliers in China, and also how we were able to secure that PPE to make sure that it was appropriate for use within the NHS. The public sector in terms of flexibility and agility is often viewed as being much slower to respond. They're viewed as often been slower to adapt to change. Technology is often referred to here in terms of it's very difficult to implement in the healthcare sector. But what we essentially seen was, you know, technologies such as teams been adopted overnight, to be able to facilitate these collaborative endeavors. We also seen this flexibility and agility in terms of being able to onboard these new Scottish space suppliers, or even suppliers in China that we hadn't dealt with before, because our government agency were able to support, audit and due diligence on the ground. With resilience, we quite often refer to this idea that we have the ability to recover from disruption, and it's only from the kind of mid 2010s onwards that we've started to see that this concept of resilience actually means growth. And what we saw within National Services Scotland was we went from a supply chain who supply the NHS in Scotland, to a supply chain that had to grow to supply not just the NHS, but also the entirety of the health and social care sector. This included both public third sector and private actors. So you can see the huge, astronomical levels of demand, not just from the NHS, were also accompanied by huge levels of growth as well. So that was an interesting finding as well, because we were able to add to the understanding about not just resilience and practice in terms of collaboration, flexibility and agility, but also to identify growth as an element of resilience as well.

DR: You focus on resilience and adapting to a post- disruption environment. What are the three propositions you offer in your discussion? And what can we conclude from your research?

CFL: We presented three propositions based on our findings. The first proposition links into this idea about analysing our tiers within our supply chains to identify vulnerabilities. We know specifically from our research on National Services Scotland, that one of the things that we were able to see in terms of organisational readiness was quite early, when news was starting to break about the pandemic, National Services Scotland were very much looking at not just their suppliers in terms of manufacturing, because they knew, obviously, there was problems with the supply base and China. We had the Lunar New Year shutdown, that's normally accounted for in terms of stocks. But actually, what we seen post Lunar New Year shutdown was complete lockdown in some areas of China, which then put, you know, a real stress on what were already very lean supply chains. So, in terms of understanding the supply base, we could see then that yes, you would need to understand your vulnerabilities, but that's not just from the suppliers, that's from the wider supply chains as well. So, where you have these lean supply chains, where do you then have products and warehouses, and what's the potential for those warehouses to be shut down. So, these kinds of vulnerabilities within the tiers we felt was an important proposition, not just for healthcare, but it certainly would be applicable to other supply chains, and for them to actually be able to assess not just their kind of pre-COVID supply chain, but also in terms of any adaptations that they have since made to sourcing strategies to mitigate against COVID and potentially future risks. Our second proposition was around this idea of healthcare, government and government agency collaboration as critical in support and resilience. That was very much borne out by our study. Some of these collaborative relationships were new, they had understood the previous supplier base, but it was these new relationships, these new manufacturing opportunities and capabilities that became developed in Scotland, for PPE supply meant actually, that they're all of the QUANGO, the Scottish Government agency, was better to support the response moving forward through the COVID pandemic. Proposition three was really linked to staff, because although we started to understand the impact on the PPE supply chain and what we could learn, one of those lessons learned fed through in terms of our proposition, because essentially, although we reviewed PPE supply, what supported the success of this response was actually staff. It was a very small team. Those staff work very long hours, they were working seven days a week for months, really to ensure the continued supply of PPE. Obviously, that kind of pressure on staff was being focused on in terms of staff within healthcare institutions, you know whether that was the UK, the US, across Europe, Asia, etc. But our focus was very much on the staff within the supply chain, and essentially given that, at the time of our research, which was July 2020, National Services Scotland and Public Health Scotland were already discussing this idea of waves of COVID. So therefore, our third proposition really had to be focused on staff, and for the organisation moving forward to consider this idea of rotating teams to better support resilience supply chains, but also to make sure that that resilience is maintained, but not resulting in staff burnout.

DR: Returning to Liz Breen and Claire Hannibal, perhaps we conclude our conversation by having you speak about what you discovered about agility and resilience in the supply chain and bringing these articles together. So really, where do we go from here?

CH: I think it's important to say at this point that Liz and I felt it was a real privilege to be able to collate this special issue. And because of the timing of the special issue and the focus on empirical data, we feel we've got a really interesting snapshot of what was happening at that time, which we think is going to provide a really helpful springboard and will be able to feed forward into research and the ongoing agenda around COVID-19 and pandemics and supply chains more generally. In terms of, you know, thinking about agility, and resilience, what we've heard from Beverley and Claire is indicative of the papers, the research in the special issue, in that we have these excellent examples of agile and resilient supply chains. And both Liz and I feel that these deserve to be showcased and to be seen as exemplars of good practice. And again, going back to our focus on learning, we have these here, and we can use these in the future. As part of the research in the special issue as well, we also have interesting examples of the challenges that were faced. And for us, these are equally important in terms of our learning and thinking about, you know, going forward, which leads to the second part of the question, where do we go from here? And I think the purpose of the special issue was to collate the research, to think about learning but also to prompt reflection. And in terms of reflection going forward, I think there are two key questions: what can we do differently in terms of supply chain management, and what do we want to do differently in terms of supply chain management?

LB: So I think the thing that amazed me with regards to the articles that we had within this special issue is that we were dealing with real data, real time exploration of the issues and responsiveness of the supply chains. And that told us an awful lot about decision making at that time, about their ability to flex with regards to the products they made, some completely diversifying from their core mission of products, moving through to you know, providing, I don't know completely different products or new services. So that versatility, that adaptability came through loud and proud with regards to the articles that we produced in this SI. And I think moving forward, it also tells us a huge amount about humans, and their ability to be so versatile, so resilient. You know, a huge amount of what happened was actually affecting people in the COVID-19 pandemic, you know, the labor force is being shrunk, factories being closed down, people being sick. Yet, we've seen all of this rallying round, all of these opening up of new ventures, these workarounds being put into place, you know, in the sense of if they couldn't do what they did before, how could they be creative and smarter and make something different happen? So, I was just amazed at how people were able to do that: make good decisions, which affected either the short term of our supply chains, or actually really started reshaping the supply chains that we had. And I think that ties in with earlier discussions with regards to the globalisation agenda, because we realised that some of our supply chains were very global, and they were becoming quite fractured and quite fragile. It opened that that dialogue, again, with regards to our focus on the home markets, on staying local, on the shorter supply chains, on reducing vulnerabilities with regards to logistics, and actually, I suppose making us realise the value of our home markets and contributing to our local economies. And because obviously, the articles that we published were representative of different sectors and different countries, they sort of signpost activity in different parts of the world, but they had a common theme of that adaptability and that responsiveness and that resilience across them, so lovely, comparative analysis. And I think for me, now is the time to really sit back and reflect on what happened to our supply chains during the COVID-19 pandemic: what did we do that worked incredibly well, and actually we really need to do more of to bring in house new capabilities that were found, new levels of strength, new partnerships, which worked out incredibly well? Different ways of delivering our services or our practices, and harnessing that learning, maybe we re-engineered our processes, maybe we brought in new skill sets or new talent, so really making the most of that. And not only using that for our own company development, our own supply chains, disseminating and sharing that knowledge. I think now more so than ever, is the time for knowledge exchange, is the time for making sure that we publish our articles and our information so people learn what we did during that time, how we prospered, how we managed to stay afloat, which was incredibly important for our small to medium sized enterprises regardless of which country that we were in. So that sharing of intelligence, that learning, you know, making sure it was open access to lots of parties, I think that is where we really said ‘okay, we're coming together to a common mission. We've survived the pandemic, we've learned what we need to do moving forward, let's share it with others and let them benefit from it’. So, I think that for me is incredibly important. But also, what do we do that actually have caused problems moving forward? So, PPE has been discussed quite a few times with regards to the products that we needed to protect our healthcare staff, the manufacturing of those products, new collaborations being formed. But the amount of PPE that we have produced has led to a mountain of medical waste. So, some of our decisions that we made then were sound but have led to problems for our environment at this moment in time. So, if we had to rethink and redo that, what would we do differently if this ever happened again, to prevent the mountain of waste and the negative impact in our environment and the costs associated with it? So, for me, it's very much about reflecting and sharing the knowledge that we have gained in our response to the COVID-19 pandemic.

DR: Thank you for listening to today's episode. You can find more information about our guests on our website, as well as a transcript of the show and a link to the special issue.