Field of Corn
Tuesday, August 11, 2020
Agencies can follow a Three-Step approach to drive resilient supply chains forward in the context of response and recovery efforts around COVID-19.

This blog was written by Mark Fisk, Partner – Blockchain Government Lead and COVID-19 Supply Chain Response Lead, IBM

The impact to supply chains during the COVID-19 pandemic and recovery remains a significant concern for both industry and government. Over the past several months, Federal agency leaders have discussed difficulties as they address multiple impacts:

  • Major disruptions to existing supply chains and current suppliers
  • Implementation of new programs and policies, creating new and different demands
  • New competition, procurement partners, and a lack of visibility into inventory
  • Personal effects on agency personnel (remote work and availability)
  • Push for transparency amongst politicized results
  • New budget pressures

At a recent panel discussion, “Supply Chain Resiliency with COVID-19: What’s Next?,” current and former government leaders discussed the importance of going outside of an agencies’ “own four walls” when rethinking supply chain challenges. The session also covered questions about replenishing stockpiles based on determination and the government’s role in owning risk; and addressed tying agency and program demand at a high level into supply chain just-in-time manufacturing capabilities, inventory, and interoperability to service outstanding needs.  Lastly, one speaker noted the need to solve contingency planning risks in areas of supply chain capacity, not just during COVID recovery but for future emergency scenarios as well.

As agencies move forward in their response and recovery efforts around the pandemic, operating only within the “four walls of the agency” does not present a sustainable approach for making their supply chains resilient.  This post presents a three-step process where an agency can review current, short-term, and long-term approaches to resiliency, based on experience with commercial food industry’s supply chain’s intersections with government to illustrate potential improvements.

 

A Three-Step Approach for COVID-19 Recovery in Supply Chain

  Steps   Description
          1. Improve “source of truth” within four walls of agency     INTEGRATION – Ability to take disparate data sources within an agency and aggregate information for use internally by agency users in day-to-day operations (help desk, claims processing, reporting, etc.)
  2. Leverage new data sources for data visualization     INSIGHTS – Use data visualization, analytics and other tools/approaches in order to combine agency data with new data feeds in order to drive the insight needed – e.g. COVID data, weather data, economic data, etc.
      3. Create a new source of truth for next-generation technologies   ACTION – Have transactional updates directly from other business network members vs. public data feeds – so information is actionable – while maintaining privacy and security through permissioning of the data. This is the new “source of truth” that an overall network can use to drive their emerging technology layer of predictive analytics, artificial intelligence/machine learning, and intelligent automation.

 

STEP 1: INTEGRATION - Improve “source of truth” within four walls of agency 

Initially, An agency  focuses on gaining new insights within the processes, systems, and data in their current enterprise. This results in rapid “out of the box” technology improvements, with minimal impact to existing processes and systems, and with low costs and high returns by focusing critical resources. Examples of these solutions include intelligent agents for call centers, integration of disparate data sources, and cloud enablement of infrastructure to support enhanced scalability, availability, and security.

Over the last few months, the impact to the resilience of supply chains across the federal government has become clear, as has the need for more robust, resilient capabilities. Implementation of this first step is vital for on-going operations and to provide agencies the ability to pivot to their next issue or threat. However, these changes should also be taken in context of the broader transformation over time.

          Agency integration success story:  United States Department of Agriculture (USDA) – Farmers to Families Food Box

USDA partners with farmers, ranchers, specialty crop producers, food processors and distributors, and non-profit organizations to ensure that all Americans have access to the fresh and wholesome food they need during the COVID-19 national emergency.

In 10 weeks, the requirements were defined for five food box products, 100 vendors were quickly onboarded, and 42.3 million food boxes were distributed in a timely manner through the USDA supply chain, which was actively managed by vendors working with farms, food banks and non-profits directly.

 

But what about the next level of visibility into such a food distribution program?

 

STEP 2: INSIGHTS - Leverage new data sources for data visualization

The next step involves extending this current insight to broader datasets or new supply chains beyond the current agency context.

During a recent panel discussion, Supply Chain - Supply Chain Resiliency, government leaders discussed the impact of COVID-19 on supply, demand, and inventory involving ssupply chains. Several discussed solutions could be provided in a matter of weeks, on top of existing agency capabilities. These include:

  • Better Supply Decisioning: COVID-19 data and other commercial data sources combined to inform the dynamic needs of new and resilient supply chains.
  • Better Demand Sensing: Combining historical trends with dynamic situational data around economic and pandemic information.
  • Better or New Supplier Selection: Ability to better select suppliers based on trusted inventory, and deeper connections than traditional “marketplaces” when existing supplier bases have been depleted.
  • Dynamically Standup New Supply Chains: Immediate lifecycle visibility into items across multiple parties and processes, often involving a “control tower” capability to capture, process, and provide insight into supply chain events across a new business network.

 

          For Government programs interacting with the commercial food supply chain, additional insight could be attained through:
  • Aggregating weather and climate data with COVID outbreak data to predict specific farm surplus and proximity to critical areas where the food bank need is greatest.
  • Implementing a demand sensing model that applies predictive analytics and automation to economic and other COVID-related non-traditional datasets, to determine what geographic segments may have the greatest needs.
  • Additional information on suppliers in subsequent phases of funding and vendor selection with capabilities such as the Trust Your Supplier business network.
  • Additional supply chain visibility including RFID tracking or other events to be captured by the business network, giving real-time insights into what products are moving through the supply chain and when.

 

STEP 3: ACTION - Create a new source of truth for next-generation technologies

During this last step, a new “source of truth” is needed from the business network itself, to ensure agreement on information needed to adapt additional emerging technology such as intelligent automation, AI, RPA, and  permissioned blockchain applications. A “shadow chain” (a blockchain fed by multiple sources of truth from the business network) implementation of “permissioned“ (meaning only members of the network have permission to join the chain) blockchain technology provides an easy pathway for government to establish a blockchain network without drastic changes to business processes or major modifications to legacy systems.

Blockchain will be a key enabler for these types of business network scenarios in a supply chain; however, this longer term strategy must be balanced with the foundation of getting insight and value out of what has started within “agency walls” first (step 1), and then gaining additional value incrementally with external data sources through a permissioned network (steps 2-3).

          For Government programs interacting with the commercial supply chain, a permissioned blockchain could mean:
  • Having vendors, farms, establishments, transporters, and recipients (grocery chains, food banks, domestic/international non-profits, and foreign countries amongst others) each directly update a blockchain network with supply, demand, and in-process transactions, to achieve maximum real-time visibility into the network without having to stand up a new centralized system.
  • Providing an auditable history of transactions for government agencies to leverage for future orders, fraud detection, payment verification, and also to assist in predicting supply/demand issues and assisting in tracing food safety outbreaks.

 

In conclusion, agencies should balance the tactical efforts within their four walls with quickly leveraging external or commercial information for insight, while developing a long term plan of how to leverage the overall business network more broadly in a secure, permissioned manner through blockchain technology.  A focus on insights for supply, demand, and inventory across the overall supply chain -- and a path to the future towards enabling technology such as blockchain --  provides a phased approach to a more resilient supply chain.

As a final note, the long-awaited FDA Smarter Food Safety Blueprint was recently released. This plan has much synergy with the ideas above, and adds key performance indicators  and business results that were announced around the FDA program. Moving forward, focusing on business value and results for the larger business network will allow agencies to participate in a broader effort, reducing risk of taking on all the effort within their “four walls.”.

 

** Photo by Stokpic on Wunderstock (license)

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