The Logistics of COVID-19 Response Efforts: Q&A with Dr. Nezih Altay

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Individuals, communities, and companies around the world have been affected by COVID-19. In any natural disaster or pandemic, the logistics of response efforts is essential. After a hurricane or a flood, impacted communities need food, water, and medical supplies, and in global pandemic, such as coronavirus, communities around the world need more medical supplies.

To learn more about the role of logistics in disaster response and recovery and how supply chains can remain agile during these times, project44’s VP of Value Engineering Christian Piller sat down with Dr. Nezih Altay, Director of the M.S. in Supply Chain Management at DePaul University’s Driehaus College of Business. 

Dr. Altay — who has received a Fulbright Award to visit Finland’s Hanken School of Business and Economics in 2021 to research humanitarian relief in armed conflict zones — shared his expertise about humanitarian logistics, why it’s important for the response and prevention of COVID-19, and how companies can mitigate the disruption to their supply chains.

Christian Piller: Congratulations on receiving a Fulbright award. Your research sounds fascinating. Why did you decide to study humanitarian logistics in conflict zones?

Dr. Nezih Altay: Thank you Christian! The difference between shipments in a regular disaster, like an earthquake or flood, is that you do not have to negotiate with insurgents and terrorist organizations or fighting parties and the main problem is usually accessing roads or routes. 

There is not much research in academia about this. There is research from political science about dealing with terrorism or insurgencies and negotiations, but the logistics aspect of it hasn’t really been touched. 

Piller: Why are logistics so important in response to a humanitarian efforts? 

Altay: You can find examples of logistics in every disaster response, whether it’s in the United States or international. There is a common agreement among academics or researchers of humanitarian logistics that logistics is about 80% of response efforts. You need to bring in food, water, and medical support to people who are affected survivors of an earthquake or a flood, and you need to bring them shelter. 

Those are all understood, but we take these for granted. We think, of course shelter will be available, or water will be distributed. But unfortunately, the definition of a disaster is that the local capabilities and capacities are overwhelmed. That’s when we call an event a disaster. For example, we don’t call a three-car pileup a disaster because with our current capabilities of emergency response, we can respond that accident quickly and properly. 

In a disaster, you will need outside help — whether it’s water, food, shelter, or medical support — and that movement is all logistics. 

Piller: How do you think real-time transportation visibility could impact response efforts?

Altay: I think the impact of visibility in transportation and logistics is huge. It’s not just huge in humanitarian logistics, but in regular commercial operations too. But in humanitarian operations, the impact is even bigger. 

In humanitarian response, everything is happening so fast in a sense of urgency and things get lost. If things are not tracked, your stuff may end up in a different location or will result in duplication. For example, one town receiving twice the amount of water they need while another town is not receiving water at all. This is all because of miscommunication and lack of coordination. 

If I can actually track my trucks, my shipments, and my containers, that miscommunication goes down drastically. If I’m communicating about a shipment and I misunderstood and send my trucks to a different location than I’m supposed to, we can actually see that on the map in real-time and correct our mistake. If I don’t track it in real-time, I will only find out that I sent my truck to the wrong destination after it arrives there. This happens a lot in humanitarian response. I think the impact of real-time tracking to the humanitarian sector is huge.

Piller: The entire world is impacted by COVID-19. What role does logistics play in that kind of response effort and prevention? What are some of the current logistics challenges?

Altay: One advantage we have in response with natural disasters is that natural disasters are local. A tornado in Iowa affects only Iowa, so you need to move stuff into the tornado-affected region. The problem with the pandemic is that pandemic by definition is global. It’s everywhere and it affects everyone. 

The impacted area is vast and that’s a huge logistical challenge. You can focus all your efforts, move all your trucks, move all your airplanes towards Houston to respond to floods, but if you need to help 350 million people in the United States, logistically that’s impossible. 

We’re seeing right now, for example, truckers are running nonstop, because we’re seeing crazy demand peaks due to panic buying. Some of these demands are legitimate. We need more masks and PPEs than normal, but the system itself has enough capacity to respond to that type of demand peak. What we don’t have is the capacity to respond when regular people, non-healthcare workers, also start buying personal protection equipment, masks, and ventilators. That creates an artificial inflated demand peak, which the system doesn’t have the capacity or the buffer to respond to. 

I don’t look at it as just a logistics problem. I look at it as a supply chain problem. Logistics generally refers to movement and storage, like transportation and warehousing, but the fact that we do not have enough ventilators in this country is more of a supply problem where we need to get manufacturing capacity or move ventilators from outside of the country into the United States. And then of course once they’re sourced, secured and purchased, we need to move and deliver them. 

Piller: What should supply chains consider to mitigate the disruption of COVID-19 to their operations?

Altay: Supply chains need to be agile. Most supply chains today are designed to be efficient, meaning they’re designed to minimize costs and increase operating profits. The problem with this approach is that it doesn’t actually work with every product. If I’m talking about canned goods, I want to be efficient because my profit margins on canned soup or canned goods are low, so my objective is to minimize costs. 

But if I’m talking about medical supplies, I want to be fast. For surgical masks, the margins aren’t huge, but we still need to fly them in rather than put them in a truck or in a container because the healthcare responders need them today. It’s a problem of fit, what type of supply chain design you should have depends on what your goal is in your supply chain.

Most supply chains are designed to be efficient, which usually correlates to being slow because slow is cheaper. If I move something on an ocean vessel, I’m paying much less than to fly it into a destination. Speed comes with cost. In some cases, like this pandemic response, we need speed, not cost minimization. 

Piller: When the pandemic is over, do you think COVID-19 will change how global supply chains plan for the future?

Altay: If we are smart, we should be learning from every disaster and every experience. These disasters, like the coronavirus in this case, teach us that we need to be agile. 

For example, in 2011 the Japanese earthquake occurred, then the tsunami, and then the Fukushima nuclear disaster. After these events, everyone was talking about whether Toyota and Honda were going bankrupt because their factories were affected. Because the whole automotive sector works lean, they only keep two weeks of stock. There was a lot of discussion at the time because we have been teaching in business schools, and to the whole business world, that they need to be lean to reduce inventory levels and be more profitable. Well, we learned in 2011 after this disaster that lean is not always the answer. 

Lean works in status quo when everything is moving or working as normal. But in today’s world, we see because of natural disasters, climate change, and political situations, there are so many uncertainties that we have to deal with every day. Lean doesn’t cut it anymore. 

You need organizations that are agile, like an Australian Shepherd dog. They can run, they can jump, and they can go under things. They need to be very flexible, they need to have multiple skill sets, and they should be able to switch between those skill sets easily. Lean is like a Greyhound. They run around the track and that’s all they do. They’re trained to do one thing really, really well. 

Our organizations need to be trained to do multiple things well. All these disasters should be teaching companies that they need to be agile, that their supply chains need to be agile.

Want to learn more about how supply chains can prepare for future uncertainty and change?

Christian Piller’s latest article, What can corporations and supply chain professionals learn from COVID-19?, explores how companies can use lessons from disruptive events to build more agile supply chains for the future. 

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