Supply Chain Lessons
Last year we all learned the impact of downtime in our global supply chain. This year we are learning that supplier process validation, and demand planning are equally vital aspects of supply chain management. Two recent new stories have highlighted this for us: The news that J&J had disposed of 15 million vaccines made in the USA highlighted the importance of partnering with vendors to understand and qualify their process controls.
Industry Week commented that the J&J partner responsible for this mistake has a long running history of falling short of FDA quality guidelines, with failures in 2017 for not correcting "mold and yeast isolates", in 2018 for an "unwritten policy of not conducting routine compliance audits" and in 2020 for procedure failures, data integrity concerns and careless handling of rejected batches. Now, every supply chain manager has a vendor that hits an occasional bump in the road, and there are always options. J&J did 3 things well:
Control any potential issues up front with process validation - the scrapped product were all initial process validation test batches and were never distributed to the public
Address identified issues by sending staff to support the facility cleanup
Admin and openly explained their controls and recovery plans
Now it's up to the supplier to improve their process controls, and earn trust. When the Suez Canal was blocked for a week, we hit another international supply chain crisis. While the container ship the EverGiven "only" blocked one of the busiest international trade routes for a week, the disruption and repercussions will likely last for several months. For some markets, delayed availability of commodities immediately affected routine cycle times, safety stocks, and transit times. Prepared supply chain managers are investigating multiple tiers both up and downstream to identify potential material delays. But the impact will reach further than delayed material, and demand planning. Air cargo carriers across Europe are expecting increases as companies adjust to meet delivery schedules, and once the ports already overwhelmed by COVID catch up, there will be impact in delayed availability of shipping containers too.
The Pandemic prompted greater collaboration and transparency within and across supply chains. Only time will tell if we have learned those lessons to adjust to issues like the residual effects of the Suez event, and of course the ongoing microchip shortage. Final thought: Have you asked your vendors recently what challenges they are facing or anticipate, and how you can adjust accordingly? It’s better to collaborate than to be blind-sided.