2020 IN A NUTSHELL: “Up until a few weeks ago, I knew very little about the supply chain. It always just worked. But I’ve learned a bunch, and it’s more fragile than we ever thought possible.”

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via fivethirtyeight

So far, Australia has been doing pretty well in the fight against COVID-19. Using a combination of social distancing, tight travel restrictions and contact tracing, the country has kept its death toll under 100 people and seems to be leveling off its new cases. It’s even managed to avoid closing schools. But despite the relatively minor impact the novel coronavirus has had on life in Australia, medical workers are still running low on masks, gloves and gowns.

“Suddenly it feels like a house of cards,” said Simon Quilty, senior staff specialist at Alice Springs Hospital in Australia’s Northern Territory. “We haven’t quite [run out of personal protective equipment], but we’ve come very close to it. We don’t even have the pandemic. If we do get a pandemic, we’re fucked.”

All around the world, whether hard-hit by the virus or not, countries are running low on crucial supplies. And while shortages are largely confined to disposable medical items for now — personal protective equipment (PPE), swabs, chemicals used for COVID-19 testing — experts say other shortages are likely. The spread of SARS-CoV-2 (the virus that causes COVID-19) is affecting the way we manufacture all sorts of products, and the way we get those products to where they’re needed. People who study these supply chains have seen problems coming for years. Now they’re scrambling to get ahead of the pandemic, before it ends up affecting even our ability to produce the vaccines we hope will stop the disease in its tracks.

“Up until a few weeks ago, I knew very little about the supply chain,” said Megan Ranney, a professor of emergency medicine at Brown University. “It always just worked. But I’ve learned a bunch, and it’s more fragile than we ever thought possible.” COVID-19 has forced her — and lots of other hospitalists around the country — to become supply chain experts on the fly.

A supply chain is a fancy term to describe how products get made and moved all around the globe. It’s a simple concept, but not a simple process. Supply chains aren’t a conveyor belt — they’re a ballet. And there are many, many ways this spectacular show can fall flat on its face. The production of a single item often involves multiple factories in several different countries and depends on speedy, reliable international shipping to get each piece to the right place at the right time — and then to the buyers exactly when they need it.

In fact, experts in both manufacturing and medicine have spent years warning of the risks a pandemic — or another major disaster — could cause to supply chains. In 2011, for instance, Quilty documented that the hospital where he worked at the time had less than a 30 days’ supply of penicillin and many other crucial pharmaceutical drugs. A 2017 paper by scientists with the Centers for Disease Control and Prevention pointed out that PPE supplies had run into problems during the 2009 H1N1 influenza pandemic and the 2014 Ebola virus epidemic, and warned that the system wasn’t prepared to handle a sudden increase in demand. Multiple reports have been published on how avian flu pandemics could disrupt everything from computer manufacturing to the global food supply.

“PPE is the canary in the coal mine,” Ranney said. She, and other experts, told me that right now, that’s the main place we’re seeing supply chains break down. But those same issues apply to damn near everything else we make and sell. The longer the pandemic goes on, the more products will be affected.

There are three big problems with the global supply chains, experts told me. First, the push toward lowest-cost production means a lot of cheap goods and cheap components of more valuable goods are made in places with low-cost labor. When those countries experience a pandemic outbreak — or when a pandemic interrupts transport from those countries — it creates a bottleneck.

Around half the world’s face masks came from China before the novel coronavirus pandemic began. The virus interrupted manufacturing there early on, Ranney said. Now, China can make masks again, but demand has jumped all over the world, and there are shipping delays. Several companies have told her to expect deliveries to take three or four weeks. In the meantime, she’s been left to sort through sketchy, back-alley PPE dealers, some of whom produce low-quality masks that either fall apart or don’t filter properly on testing. Other would-be suppliers have turned out to be basically the high-stakes equivalent of one of those “you’ve inherited $3,000,000!” email scams.

The biggest thing experts are taking away from all this is the weakness of that just-in-time supply chain. “In lean terminology, inventory is waste because it’s supply you aren’t using,” Robinson said. But now, when demand is sharply rising, that inventory would be helpful — and so many industries are tied together that when one runs out of supply it affects the ability of other industries to keep functioning.

Production can be ramped up, and it is. But it takes time and investment — and it’s important to remember that those investments are a risk. We might need American-made masks now, but will we keep buying them after the threat of COVID-19 has passed? Or will we revert to just-in-time supply from cheaper factories overseas? History suggests the latter. During previous epidemics of influenza, Texas-based company Prestige Ameritech saw demand soar, Swann told me. But it proved to be a boom and bust. The company invested in new machines to meet demand during the 2009 H1N1 pandemic, Swann said. “And then they almost went out of business later because [the Texas company’s product] was a little more expensive than the ones from China,” she said. “We need to be willing to pay a little more during times of peace without crisis so we have supply available during crisis.”




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