Disasters disrupt supply chains. Last year, the Federal Emergency Management Agency noted: “Quickly reestablishing flows of water, food, pharmaceuticals, medical goods, fuel, and other crucial commodities is almost always in the immediate interest of survivors and longer-term recovery.
Government emergency supply plans focus on local or regional disasters, such as forest fires, floods and hurricanes. However, the COVID-19 pandemic broke that mold. Supplies of personal protective equipment, test kits and ventilators have not fulfilled the demands of a nationwide event. Complaints of price gouging, counterfeit or low-quality items, and critical shortages dominate newscasts.
Basic economic principles are that prices go up when demand suddenly exceeds supply until production ramps up. For disasters, government creates a stockpile because people cannot wait. With the recent surge in cases, how can we fix supply chains today and ensure future resiliency?
At the heart of the issue is the artificial segmenting of information and operating relationships between federal, state, local, tribal, territorial and commercial systems. When the pandemic hit, both government and industry shifted into ad hoc mode, creating “task forces.” Task forces rely on personal relationships to address information and operational gaps. Lesson learned: Markets do not work without information, and neither do task forces. Some hotspots never had enough, while other places got excess supplies.
In 2020, this is simply unacceptable. A performance-based logistics approach drives metrics-based outcomes by incentivizing an integrated and responsive supply chain. The Defense Department has embraced a performance-based logistics digital approach that required modernizing and integrating dozens of systems to better forecast and manage surge needs. Other agencies need to work together to do the same now, recognizing that the pandemic is not going away and we cannot risk lives lost from not being prepared for a future event.
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