Experts Discuss the Role of the Research Enterprise in Supply Chain Security
Jul 31, 2020
- Susan Helper, Professor of Economics at the Weatherhead School of Management at Case Western Reserve University
- Anne Pritchett, Senior Vice President of Research and Policy at Pharmaceutical Researchers and Manufacturers of America
- Charles Avery, Value Steam Director at 3M Personal Safety Division
- William LaPlante, Senior Vice President and General Manager of MITRE National Security
Susan Helper, Professor of Economics at the Weatherhead School of Management at Case Western Reserve University, spoke about how the U.S. supply chain structure that currently exists enhances vulnerability. She referenced the shortages of toilet paper supply and groceries at the outset of the COVID-19 pandemic, stating that the problem was due to supply chain inflexible and not lack of supply. U.S. supply chains were not build to quickly adapt to disruptions, and in these particular cases they could not quickly transition distribution from restaurants and business to home supply. Helper went on to discuss specific vulnerabilities associated with U.S. supply chain structures, including how concentrated ownership of bottlenecks spurs further disruption in times of crisis, and how pressure to distribute profits to shareholders results in companies having little cash on hand to weather a crisis and invest in R&D.
Helper was quick to assert that global supply chains are inherently the answer to many of these issues. Instead, she offers an alternative structure that would leave all players less exposed to risks and social costs inherent in today’s global supply chains while also promoting collaboration between management and workers and the sharing of skills and ideas. Helper encourages that supply chain managers look at the “total value contribution,” which encourages managers to first consider how decisions affect value drivers before they consider the costs. It also encourages firms to tap into what customers value and asses the hidden costs and risks of using suppliers whose prices appear low. In measuring all potential risks and costs, often we will find that U.S. suppliers are more competitive than they may at first appear.
Finally, Helper recommends a set of principles for policymakers to consider in order to make the U.S. domestic supply chain more competitive and resilient. These principles include rebuilding U.S. supply capabilities; assuring stable, long-term U.S. demand for key products; and promoting productive investment and good jobs. These principles, in consideration with understanding sources of vulnerability, removing hidden subsidies for offshoring, and rebuilding a supportive ecosystems will help ensure U.S. supply chain stability.
The next speaker to present was Anne Pritchett, Senior Vice President of Research and Policy at Pharmaceutical Researchers and Manufacturers of America. Pritchett spoke about the biopharmaceutical supply chain specifically in relation to COVID-19. She began by asserting that the pace of research that the biopharmaceutical has seen in the wake of COVID-19 is unprecedented. She shared ways the industry is committed to beating coronavirus, which includes making investments in R&D while simultaneously ramping up manufacturing capabilities and sharing information with Federal and industry partners. Pritchett mentioned that is also unprecedented that the industry be ramping up manufacturing while R&D is still in the early stages, but that this is how the industry is reacting and doing its part to quickly bring about an end to COVID-19. Additionally, while manufacturing capabilities and R&D are being developed simultaneously, the industry is also working to ensure that distribution can occur rapidly once a successful product has been manufactured.
Pritchett’s presentation focused solely on COVID-19 but did have interesting data that can be used in building future supply chains. She mentioned that she has never before seen this level of collaboration among stakeholders, including industry competitors and the Federal government. She mentioned that the Federal government has been encouraging the support of tech transfer between companies at this crucial time, and that this may prove a beneficial practice well into the future.
Pritchett finished her presentation stating that meaningful policies are needed to foster increased manufacturing in the United States without disrupting the drug supply chain, and to do so policymakers must make the U.S. more attractive by increasing diversity in the supply chain and leveling the playing field. She stated that, “policies need to be based on facts, not rhetoric,” and specifically called attention to how China, who she says while may warrant concern, has not proven to hinder the medical supply chain.
Charles Avery, Value Steam Director at 3M Personal Safety Division, also spoke on the webinar sharing how 3M worked directly with FEMA to respond to the COVID-19 pandemic. Working together, 3M was able to deliver much needed supplies directly to hotspots. He also shared how 3M was able to rapidly respond to the increase in demand thanks to forward thinking and preparation done by the company. He shared that the company’s ability to respond quickly was based on the strong relationships the company has with its raw materials suppliers. When asked, “What was the biggest surprise in your supply chain with COVID-19?” Avery responded it was how many boarders closed during the pandemic. He suggested that 3M does try to operate on a regional model, but the U.S., for instance, supports the company’s Canadian operations, and that to be better prepared in the future the company needs to develop a more robust response to the quick closing of boarders in the future.
Avery also mentioned how to think about post crisis resilience planning, suggesting it is important to consider stockpile emergency preparedness aligned with governments, global supply chain architecture and capacity resilience, ongoing digitalization for improved E2E visibility, and ongoing disruptive technology.
The final speaker was William LaPlante, Senior Vice President and General Manager of MITRE National Security. He shared that the U.S. doesn’t want to get into an “imitation game,” and instead needs to focus on how we participate and cooperate in the global arena while hold true to our values, including intellectual property. He also shared that it often comes as a surprise that prime contractors in the defense world do not have insight three or four tiers down in its supply chain and that laws may be needed to change that. He suggested doing something similar to what was done with the space race, when the U.S. demanded that it has two independent ways of getting into space and that they must be American built. It is expensive, but may be necessary in certain national security circumstances. He gave GPS as an example, stating that the military developed and operates a world-class, reliable system, but that China is now producing a competitor. He encouraged the audience to think about what that means for the U.S. if the timing of most of our systems isn’t through a trusted source, but instead controlled by a foreign country. He finished his discussion stating that standards bodies are becoming more important than ever in maintaining fairness globally.
ASME staff routinely participates in webinars such as these to ensure full coverage of pertinent issues effecting the society.