Federalized supply chains at times of national emergencies
By Moataz Rashad & JC Zhou
DeepVu is an AI company focused on optimizing supply chain efficiencies with smarter forecasting and decisioning models. Our engagements with tier1 manufacturing leaders in multiple verticals such as electronics, construction and consumer goods gives us a unique vantage point.
In terms of the current pandemic, the highest priority components needed for caring for COVID19 patients seem to be ventilators, hospital beds and masks. Let’s take ventilators, which are essentially a medium complexity electronic device that’s composed of a pump, hose, display, and a simple microcontroller for regulating the flow. It essentially breathes for the patient, pushing oxygen into the lungs and also takes co2 out.
What would a Federalized supply chain entail for this?
For context and clarity, a supply chain for a medical electronic product like this has the following steps:
Procurement of raw materials and manufactured components (ex plastic/PVC for casing, and microcontroller chip/board) from multiple suppliers
Storage at a distribution center
Shipment of these components to a plant/assembly
Manufacture, Assemble and Test
Storage at a distribution center
Receive orders from various hospitals and clinics
Shipment of the product to hospitals and clinics
Note that the design and specifications of the device itself are already FDA approved and since we’re following that spec, there are no additional approvals required.
How would the Federal Gov help expedite and boost this process? The government can provide the following:
Air freight capacity -- The military has a massive cargo fleet and this can help tremendously in getting the microcontroller chips which would typically come from TSMC in Taiwan, as well as other components that would come from US companies, and need to be delivered to the factories
Distributed Storage capacity -- both the Military and USPS have massive warehouses all over the nation
Shipping capacity -- similarity both the Military and USPS have the logistics network to distribute these ventilators and components from the DCs to the hospitals across the nation without relying on a 3PL carrier!
So you can see that other than step (4) above, the Federal Gov can significantly contribute to boosting the efficiency of this supplychain.
Note that this doesn’t invoke the Defense Production Act in the sense that we’re not assuming the president will force commercial companies to do any parts of this. If the Defense Production Act is invoked, then the manufacturing step itself would benefit b/c more companies that Medtronic and Philips will be asked to manufacture the ventilators
We’re just using the Federal Gov resources to help address current gaps and materially optimize the speed of getting products to the point of care where the patients need them.
In conclusion, we think that the Federal government can indeed help in saving our fellow citizens lives by boosting the efficacy of distribution of ventilators, masks and test kits. May God protect the elderly and the vulnerable!