Supply Chain’s Catch-22

April 22, 2020

The Egyptian Pharaoh, clearly angst-ridden about his bizarre dreams, summoned someone from prison that he had heard possessed a gift of interpreting dreams.

Brought before the monarch as told in Genesis 41, Joseph listened to him recite his two troubling dreams. The first involved seven hale and hearty cows that emerged from the Nile River to feed on the nearby grass. They were followed by seven sickly and thin cows that ate the first seven. The second involved a stalk on which grew seven full ears of grain. They were followed by seven thin and withered ears of grain “blighted by the east wind.” The seven thin ears devoured the seven full ears.

The Pharaoh, consumed by worry, asked Joseph what they meant.

Joseph responded by saying God was forewarning the Pharaoh that seven years of bounty and plenty will come to Egypt, followed by seven years of famine and severe need. In perhaps one of the earliest lessons in effective supply chain management, Joseph advised the Pharaoh to appoint a “discerning and wise man” to oversee the process of gathering one-fifth of all the produce grown and harvested during the seven bountiful years, and under the authority of the Pharaoh, store it as a reserve for distribution during the seven lean years to follow so the people will be saved.

You likely know the outcome of this famous Bible story. The Pharaoh appoints Joseph as Prime Minister or Vizier of Egypt to carry out this massive supply chain operation, which ultimately succeeds.

Imagine a Supply Chain Executive today being hailed as the No. 2 behind a CEO.

Besides divine guidance, what did Joseph, the great Old Testament Supply Chain Leader, possess that helped him succeed? Information by precognition.

Supply Chain Leaders today fall immensely short of possessing precognition. They come as close as humanly possible via computer-generated models and expert forecasting based on mental deduction. They rely on data about purchasing patterns, sifted through algorithms designed to predict behaviors. They also participate in crisis/disaster planning meetings that largely outline how to react and respond to as many “What if?” scenarios as possible.

As healthcare organizations, cities, states and nations around the world grapple with the spread of the novel coronavirus COVID-19, they bemoan the shortages of surgical masks, respirators, and other protective products designed to prevent the spread of the virus.

They point to a deficient, mismanaged supply chain as a reason.

Supply chain, by its very nature, is a reactive process. Supply chain reacts to satisfy demand. So in order for someone to know what to produce and distribute he or she has to know what customers demand.

Besides divine precognition, what other benefit did Joseph enjoy more than 3,500 years ago? CEO support and real estate budgeted to stockpile 14 years of grain.

So far this century, we’ve experienced at least half-dozen life-threatening viruses that reached epidemic and pandemic classification. We’ve also experienced significant shortages of product needed to combat these viruses and protect people.

Short of equipping everyone with a Star Trek replicator (essentially what we might call a 3-D printer with near instantaneous output), all of the players in the supply chain need ample time to plan for production and distribution, storage and consumption.

Since 1983, managed care, however, has tried to bridle supply chain through myriad cost containment strategies that eliminate the ability to have quick access to ample product – even when you don’t need it. For example, just-in-time and stockless distribution alleviates the need to maintain costly real estate that could otherwise be used for more patient-care or revenue-generating exercises.

Nothing can be delivered that hasn’t been made. Nothing can be made that hasn’t been ordered. Nothing can be ordered that hasn’t been forecast accurately and demanded realistically. Nothing can be forecast accurately and demanded realistically if you’re navigating through darkness.

You can’t complain about the high costs of manufacturing, logistics and storage of products that we’ll supposedly never use and then complain when stringent cost-cutting measures under the guise of efficiency slash the availability of all these products we’re now supposed to have because we need them yesterday!

The supply chain may be playing catch-up and scape goat in the race against COVID-19 simply because  of short-sighted reimbursement policies.

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].