DHL: resilience in a post-COVID-19 supply chain recovery
At the beginning of the year, COVID-19 began to work its way throughout the world and cause disruption across businesses and industries worldwide. Even at an early stage in February and March, its effect on the supply chain was visible. What has become clear is the key role logistics plays in keeping supply chains moving globally.
Omera Khan – Professor of Supply Chain Management at Royal Holloway, University of London, believes that things can never go back to the way they were pre-COVID. “The coronavirus has been a huge wake-up call. Businesses that had considered their supply chains to be resilient suddenly found out that they weren’t. Businesses and industries that had resisted change suddenly found themselves embracing it. Consumers used to abundance found themselves dealing with scarcity. Will things go back to as they were before? No - too many lessons have been learned.”
According to the whitepaper, there are four key supply chain driver categories:
- Transportation & warehousing
- Workplace operational practice
It is often thought of as an operational issue that is focused on securing the supply from first-tier suppliers. Generally, few organisations extend resiliency planning further upstream to their second or third-tier suppliers. In future, supply chain managers, planners and procurement professionals may well consider further tiers as they make decisions about sourcing, inventory buffers and transportation routes. The risk profile of a supply chain is usually ‘locked in’ within the early stages of strategic development. This ensures that the processes to achieve supply chain transparency and continuous monitoring are embedded at an early stage of supply chain design and is recognised as good practice. The COVID-19 pandemic has exposed resiliency weak spots, both for countries and businesses.
“The coronavirus pandemic has demonstrated to governments – yet again – how supply chains are vulnerable to far-away events in far-away places,” commented Stephan Freichel – Professor of Distribution Logistics at Köln University of Applied Sciences. “Going forward, businesses can expect both regulatory and social pressure to ensure that they are more resilient to such shocks, with stocks maintained of critical products.”
The diversification of supply chains to be more resilient was already being thought about by many businesses prior to the beginning of COVID-19. Supply chain disruption from different disasters is’t new. For example, the flooding in Thailand in October 2011 submerged seven of the country’s largest industrial zones for a number of weeks, as well as two zones with factories belonging to two of the world’s largest manufacturers of hard drives. According to a New York Times report, only 15% of the 227 factories in Thailand’s Khlong Luang industrial zone restarted production six months later.
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.