What we learn distributing the COVID-19 vaccine will change the way everything is delivered

Investments made to rapidly distribute the vaccine will transform supply chains

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After months of preparation, we all watched with relief and hope as the first trucks departed the Pfizer distribution center in Portage, Michigan transporting precious vaccine to all parts of the country in carefully packed and environmentally monitored boxes under U.S. Marshall escort. We listened to Fedex, UPS and Boyle Transportation executives talk about their unique security and the safety measures they developed and implemented without much insight into the details for competitive reasons.

In the early days of vaccine distribution, there have been well publicized missteps. But we have to understand that it’s not unusual for an effort of this magnitude to have startup problems—especially at the last mile. As we emerge from the pandemic thanks to the delivery of the vaccine, we will be left with new capabilities that were developed and proven in record time for this “moonshot project” that would otherwise have taken years. The ripple effects of this historic effort will fundamentally reshape the way the public and private sectors build and manage supply chains.

Let’s look at some of the unique characteristics of the vaccine supply chain. A failure anywhere puts lives at risk.

• The scale is unheard of—the manufacture and delivery of two shots to 300 million individuals in the U.S.
• There are many links in the chain–from trucks and logistics, all the way to local delivery vehicles and health care facilities – and no room for error.
• The “finished goods” are assembled on site and require logistical coordination for not only the vaccine, but syringes and other medical gear, health care workers, cold-storage, PPE, sterile conditions, and rooms to administer the vaccine safely.
• This supply chain is not owned or governed by one organization; it is supported by a diverse ecosystem across private and public entities – with varying levels of technology sophistication – that are unaccustomed to working together and exchanging mission critical information.
• The federal government has spent months planning for efficient distribution, but ultimately states and municipalities need to plan for and fund the “last mile.” This is bound to be done inconsistently, as we are currently witnessing.
• Environmental factors, such as winter storms, will disrupt distribution and deliveries will need to be dynamically rerouted.
• The vaccine is a valuable commodity and enhanced security will need to be present throughout the supply chain.

This is a supply chain executive’s worst nightmare.

To address these challenges, companies and government agencies need to share accurate data in order to safely and effectively deliver the highest number of doses possible. While the workflow technology exists to automate and add intelligence throughout this complex supply chain, it is unproven even at modest scale. Blockchain, for example, has shown the potential to manage data reliably across a decentralized network, and IoT linked with smart contracts can track events as they occur. Add machine learning and artificial intelligence (ML/AI) and you can predict the bottlenecks, identify shrinkage and dynamically reroute based on defined protocols. Then there are several software platforms that link disparate systems to share, manage and verify data across platforms.

But as we’ve extensively written at the Digital Supply Chain Institute (DSCI), the challenge to managing a cross-enterprise ecosystem is less about the technology and all about the governance.  

Companies understand that technology that helps them share information with other enterprises has advantages but have been unable to make a business case and have been reluctant to deal with the governance and competitive complexities. What we are witnessing today, with the distribution of vaccines, is disruptive change forcing companies to deal with these complexities in real-time.

A software platform called Tiberius, specifically developed by Palantir for the distribution of COVID-19 vaccines, enables states and federal agencies to see their orders and track their vaccines. The software collects and integrates mountains of data related to manufacturing, supply chain, allocation, state and territory planning, delivery, and administration of both vaccine products and kits containing needles, syringes and other supplies needed to administer the vaccine.

While Tiberius, a new and untested-at-scale system, can compile the data and enable workflow such as releasing and tracking vaccine shipments, the real challenge will be in the orchestration across all the private and public sector stakeholders, each with unique requirements, to provide timely and efficient distribution all the way to the point of use.

Tiberius will succeed – it must. This will result in recognition of the inherit value of cross-enterprise visibility and data exchange that will fundamentally alter supply chains in 2021 and beyond.

Changes we can expect are:

• Investments being made today, in support of vaccine distribution, will provide substantial ROI and fundamentally change the way supply chains are thought about and managed. Supply chain investments will change from solely cost reduction to business enablement.
• Rapid automation of mission critical tasks will migrate to less critical commodity tasks as costs drop
• The linkages developed to optimize the various components of the vaccine supply chain will prove that tighter links between demand sensing and supply chain management will dramatically improve overall business performance.
• Increased willingness for competitors to cooperate will drive the formation of ecosystems to enable sharing of data and workflow reliably across the network.
• Governance controls will mature quickly as large players recognize the value of data sharing and how participation can enable competitive advantage. DSCI has developed a data trading methodology.
• An explosion of new cross-enterprise workflow tools to provide visibility and near real-time response to supply chain disruptions
• Acceleration of the deployment of ML/AI capabilities at scale
• Closer coordination and automation of complex supply chains that share critical dependencies to reduce systems failure caused by delays or shortages of a single component (e.g. syringes to deliver the vaccine).

If ever there was motivation for competing organizations to work together to optimize a supply chain this is it. We predict that they will do so at warp speed and that we will see fundamental changes in the way that technology is deployed to transparently manage supply chains.

Shawn Muma is Director, Supply Chain Innovation and Emerging Technologies at the Digital Supply Chain Institute (DSCI), a leading-edge research institute focused on the evolution of enterprise supply chains in the digital economy and the creation and practical application of supply chain management best practices.

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