Technology States battle each other for equipment in supply chain crunch

01:26  08 april  2020
01:26  08 april  2020 Source:   thehill.com

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"Normally, in supply chains , the replenishment cycle is very tightly choreographed," Derry said. But production and shipping delays, along with However, governors from those and other Midwestern states have been vocal about their struggle to obtain more safety gear for their communities.

The Virus Is Interrupting Supply Chains From Watches to Lobsters. Chaos reigns from the high seas to the factory floor after key manufacturers in China shut down or ships are held in Things would be a lot worse if the supply chain crunch came in the third quarter, a few months ahead of the holiday season.

States across the country are racing to stockpile ventilators, personal protective equipment and necessary medical supplies as they prepare for brutal surges of coronavirus cases in the coming weeks and months.

States battle each other for equipment in supply chain crunch © The Hill States battle each other for equipment in supply chain crunch

But a bottleneck in the global supply chain has forced those states to compete with each other, and often with the federal government, for limited supplies. In many states, governors have reached deals with suppliers only to have those suppliers tell them later they received a better price from another state.

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The Transportation Supply Chain : Transportation’s Role in Supply Chain Management to Lower Total Costs. At distribution centers, Walmart uses cross-docking, a process in which product is exchanged between trucks so that each truck going to a retail store has products from different suppliers.

Each stage in a supply chain is connected through the flow of products, information, and funds. These flows often occur in both directions and are the processes in a supply chain are divided into 2 categories depending on whether they are initiated in response to or in anticipation of customer orders.

"Where we are now, 50 states all trying to buy the same equipment, from China, and then the federal government comes in with FEMA, which is trying to purchase the same equipment," New York Gov. Andrew Cuomo (D) told MSNBC's Rachel Maddow. "The states are responsible for their own purchasing, and frankly, there's nothing left to buy anymore anyway."

States that have not yet experienced a crush of COVID-19 cases like California, Oregon and Washington have lent ventilators to harder-hit states like New York and New Jersey.

But for other states that are planning their own responses when peak demand hits, crucial supplies have been harder to come by. Colorado Gov. Jared Polis (D) has been told orders his state puts in with ventilator manufacturers will go unfilled in the coming weeks.

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The supply chain represents all the links involved in creating and distributing goods, from raw materials to the finished product that goes into the possession of the consumer. Each product will have its own identity on the blockchain to record changes of ownership, which can be easily accessed by everyone.

Decisions made during the supply chain design phase regarding significant investments in the supply chain , such as the number and size of plants to build, the number of trucks to purchase or D) the sum of all cash flows for all periods being considered discounted by the rate of return for each period.

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"Colorado has been working around the clock on efforts to respond to this crisis and placed several orders with ventilator manufacturers to get life-saving equipment for Coloradans," said Conor Cahill, Polis's press secretary. "Domestic ventilator manufacturers have informed the Governor that the orders of Colorado and other states will not be fulfilled any time soon because FEMA is jumping the line and demanding all the product."

Cahill said Polis called on the White House to step in to make sure states could get the resources they need.

Spokespeople for Vice President Mike Pence, who leads the Trump administration's coronavirus task force, and for Federal Emergency Management Agency (FEMA) did not respond to requests for comment.

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In some cases, states have resorted to extreme measures to get needed equipment. In Illinois, an assistant state comptroller met a middleman in a McDonald's parking lot, where she handed off a check for more than $3.4 million, sealing a deal to purchase 1.5 million N95 masks from a factory owner in China, the Chicago Sun-Times reported.

States that have turned to the federal government's stockpile for emergency equipment have not yet received all they say they need. In a press conference Monday, Massachusetts Gov. Charlie Baker (R) said his state has asked the federal government for 1,700 ventilators - and so far, only 100 have arrived.

Arkansas Gov. Asa Hutchinson (R) said Sunday he is making preparations for his state, even if the federal government has promised to deliver down the line.

"I've been assured that when we get to the point, if we need ventilators in Arkansas, they're going to be there. We're not waiting on that. We're going out on the marketplace. We're trying to buy ventilators. You know, whether it should or shouldn't, that is where we are right now," Hutchinson said on NBC's Meet The Press.

Some officials have complained that the federal government's insatiable need for equipment has made it impossible for them to buy their own. In a letter to the Trump administration, Sen. Kirsten Gillibrand (D-N.Y.) said states are "being outbid by FEMA."

"It's very hard to buy things when the federal government is there and any time they want to buy it, they get it first," Kentucky Gov. Andy Beshear (D) said Sunday.

"We the states are trying to actively get every piece of PPE (personal protective equipment) that we can. We're bidding against one another, and in some cases the federal government is taking priority," Michigan Gov. Gretchen Whitmer (D) said last week on CNN's State of the Union.

The unfilled orders and disrupted supply is not limited to ventilators. The new demand for all types of medical equipment and personal protective gear comes on the heels of China's decision to shut down much of its economy to control and stop the spread of the coronavirus. That has hurt supply at the very time that demand rises across the globe.

"We know that with supply down and usage way up, we're all kind of fighting for that same short supply," Dean Sidelinger, Oregon's state health officer and chief epidemiologist, told The Hill in an interview. "It's the perfect storm of a huge increase in need and a supply that was tight already."

While Oregon had enough ventilators to loan some to other states in need, the state is running low on other supplies.

As of Monday, Oregon had ordered more than 4.6 million N95 masks for hospitals around the state, and received only 10,000. It had requested an additional million N95 masks from the federal government and received just 69,000.

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The state has also not yet received millions of surgical masks, gowns, face shields and gloves it has ordered from the private sector or requested from the federal government.

States are taking their own steps to boost manufacturing capacity and supply. Governors have worked with local businesses to alter their manufacturing lines to produce new ventilators, masks and face shields, and hundreds of volunteers around the country are using 3D printers to make their own to donate to local hospitals.

In Texas, Gov. Greg Abbott (R) tapped Keith Myers, who heads global procurement for Dell, to run a new supply chain strike force. The state distributed 1.6 million masks to hospitals last week, and it expects to receive 5.5 million masks by the end of this week.

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