Q: Did someone ask you to teach this course, or is it an adaptation of a course you typically teach?
This is nothing like anything I normally do. (Faculty chairman and professor) Sanjay Sood said that students had been asking for a separate course on supply chains and COVID-19, and he asked if I’d be willing to teach that. The way Sanjay described it, every time they had a town hall, a student asked if we could offer an elective on supply chains and COVID-19.
There are two others probably better at teaching supply chain — Chris Tang and Felipe Caro — because they both already teach a supply chain elective. I guess I’m the Number Three supply chain guy on the faculty. After some back and forth, I decided I would give it a shot.
Q: How did you pull together the materials?
It’s a mix of things. The fact that we were looking at a supply chain issues has a lot to do with supply chain disruption and supply chain resilience, and those are relatively well-studied sub-topics within the operations field. So I gathered teaching materials and books on those topics. Chris Tang has a book on supply chain risk management, and a colleague at MIT has a couple of books about supply chain resilience. So basically I just ordered a bunch of books and started reading. I also ordered a book on the Spanish Flu of 1918 to educate myself about what’s similar and what’s different.
I also sent an email to a group of 60 or 70 supply chain experts who are part of a roundtable on the subject. “Hey, I’m planning to do this course, what do you think would fit?” So they sent me all kinds of materials and tips and suggestions, and that was another source of input.
The third thing is that this is very much a current events course. I felt there was no way I could put together a credible graduate course with the usual set of materials and readings and homework, and I don’t think that’s what the students wanted. I thought the best way to articulate what the students wanted from this course was to reach out to alumni, and that’s really the biggest piece of the course. I sent emails to a bunch of alumni to ask them if they would be willing to participate in the class. And we had more responses almost than we had time for in the course. So, the substance of the course was the panels with the alumni. The readings, the books and the discussions were more or less the framework around that.
Q: What were some of the lessons from the class?
I emphasized that actual supply chain disruptions are much more common than anyone thinks. It’s well-documented that we actually overestimate the likelihood of big disruptions, but we’ll also underprepare. That’s what we saw with COVID-19. COVID-19 is bigger than anything, almost, but major disruptions like earthquakes and, actually, other influenza outbreaks — they happen all the time. So, rare events are not that rare, and that’s one of the themes I think the students really got.
We heard the alumni speak about all the different things that they either had done which worked well or the things which they had to start doing on the fly. Most of it was just complete common sense, and a lot of it was already actually well understood in the literature on supply chain risk management and supply chain disruption. Basically, we know what to do, but we just don’t really prepare. A lot of the things that the companies were doing are things that actually would serve them very well in normal times as well.
Basically, if you build a more flexible supply chain, a more agile supply chain, that’s good no matter what. It helps you and you don’t need a pandemic for that to be useful. Another thing that speakers constantly talked about is the need to build in redundancy. In some settings, you shouldn’t sole-source from China, for example. You can make a strong argument that in the health care supply chain, there’s now an increasing realization that governments have to step in and ensure that there’s more self-reliance there. But we’re also not going to start keeping massive buffer inventories all over the world either, that’s just not efficient.
So, even though that’s one of the things that people were saying, it’s just not right. Some organizations that seemed quite well prepared — it was because of their practice. Now, they didn’t practice specifically for pandemics, but they did practice for disruptions in general. For instance, one of our speakers was from a large health services organization in L.A. and, because in L.A. County such organizations prepare for wildfires, earthquakes and all kinds of things, they have playbooks in place, and disaster plans, and emergency planning centers. Once a big disruption happens, they have procedures, and they basically follow them even though the procedures aren’t written for this specific scenario. They weren’t caught completely off guard and that’s something which is very consistent with the resilience literature.
Q: Any other takeaways?
Another lesson that came up many times is that the responses to the pandemic massively accelerated things that actually were already happening pre-pandemic. The shift away from China was already happening. Quite a few companies were already diversifying, partly because of the trade wars, and a bunch of alumni mentioned that the trade wars made China less attractive.
For a decade, labor costs in China have been going up. A lot of companies are shifting to Bangladesh, Vietnam and others if they’re looking for low-cost labor. So, these trends were in place, and then of course the pandemic accelerated them. My take on that would be, yes, these things are happening, but not much of it happened specifically because of COVID-19. They happened because of the longer-term trends that were in place. The one exception is critical supply chains, and that’s one of the points that Chris Tang has been making since the pandemic began.
Special thanks to the alumni supply chain expert panelists:
Health Care Supply Chains
Crystal Williams (’10), Health Care Supply Chain, Deloitte
Ajay Kaneria (’15), Senior Value Stream Manager, 3M*
Phillip Franks (’16), SVP of Operations, Los Angeles County Department of Health Services
Steve Shin (’17), Director of Sales Operations, Philips
*Ajay Kaneria joined Beyond Meat recently. The classroom discussion involved his experiences at 3M, his prior company.
Global Supply Chains
Pedro Jaramillo (’08), Gerente de Planificación y Desarrollo, San Jose Farms, Chile
Thomas Hall (’17), Sales and Marketing Operations Manager, Sony Electronics
Pascual Eley (’18), Operations Manager, APM Terminals (Maersk)
Apparel Supply Chains
Tina Sroat (’99), Vice President of Merchandising, Planning and E-commerce, Tea Collection
Aron Whitehurst (’12), Director of Supply Planning, Vans
Laura Buonopane (’16), Senior Manager of Supply Chain, Lululemon
Grocery and Retail
Henry Chu (’03), Vice President of Allocations and Replenishment, 99 Cents Only Stores
Christine Lanois (’13), Senior Director of Internal Audit, Albertsons Companies
David Erbs (’17), Project Manager, Ventura Foods
Shelby DeGroot (’19), Operations Manager, Instacart