Gasping for Breath - A Supply Chain Crisis

As the second wave of C-19 pandemic leaps further in India in 2021, we are swamped with Whatsapp forwards every hour requesting leads to arrange oxygen for the struggling patients. All these messages have definitely created a premonition that this shortage of oxygen is a classic case of demand and supply mismatch. However, that is not true.

" “The national demand for oxygen before the COVID-19 outbreak last year was about 700 MT/day. This jumped to 2,800 MT/day in the first spike of COVID-19 last year and currently, the demand is estimated at about 5500 MT/day in the second wave.

As per government sources and EG II, India’s daily production capacity of medical oxygen is 7,287 MT and there is an availability of a buffer stock of approximately 50,000 MT.”

While there can be no one factor responsible for a crisis of this scale, I believe this situation has been a disaster in making for a while now. The reasons for this disruption are not necessarily specific to oxygen but are inherent to supply chain design and planning in the country.

Visibility - Demand and Supply Mapping

We do produce enough oxygen to meet the current demand, but we don't have granularity in our information and connectivity to know where there is this exact demand. The demand spikes in different parts of the country are erratic and it is difficult to map it in a country with a population like ours to channelize the supply accordingly. While there is a lot of buzz around Visibility in economic and educational forums, there is a natural ignorance in professionals to make large scale investment that powers this visibility. Imagine how many lives we could have saved, had we made the conscious effort to invest in digital tools to provide visibility of our end-to-end value chains. Just to add there, we were in the exact same situation same time last year, and we somehow luckily avoided the disaster. We could have avoided this the second time around if we had learnt a lesson on the need for visibility in supply chains last year.

The Last Mile Melodrama

Those who have had even one road trip across highways in north India are very much aware of the state of last-mile operations in our country. Overloaded trucks, inclining towards either side of the road, almost ready to collapse like the one a few miles ahead of it. Add to this the trouble of transporting material like oxygen which has restrictions in the way it can be transported. There is a very limited state of the art infrastructure to transport materials like oxygen in the country, so it goes without saying that we weren't prepared to cater to such a high erratic demand spike.

Risk Management is a Powerpoint Deck for Audits

The overall attitude towards resilience, crisis management and risk preparedness is a clear indicator of how much we take our supply chains for granted. Most production facilities regardless of the industry they operate in, focus on risk management only under the pressure of audits by OEMs. This risk management activity which is limited to PowerPoint decks is also incomplete as it covers only the prevention pillar. The sensing and quick recovery aspect of crisis management are completely ignored. You can read in detail about these pillars in my article titled - Preparing to Surf Against Supply Chain Risks. Unless we take a cue from this humanitarian disaster to focus on all the three pillars of risk management, we are bound for many such disruptions of our supply network in the near future.

Besides these above-mentioned reasons for the situation we are in, there are two specific foundational issues that act as a cherry on the cake to this problem. The medical infrastructure in the country that lacks copper pipelines for seamless supply of oxygen is a clear indicator of our incapability to prioritize our funds. For more or less similar reasons, we do have robots that reduce the lead time for painting an automobile, but there is a lack of fine-tuning production methods that reduce the lead time for conversion of industrial oxygen to medical oxygen.

I know it's a tragedy, what is happening. But deep down all these above factors clearly indicate how we walked into this tragedy completely unprepared even after knowing for nearly a year the extent of the danger this pandemic imposes on us and our economy.

The silver lining in my understanding of this hard-learned supply chain lesson is the collaboration shown by the youth in this country. In my company - Thoucentric, I have seen a 24*7, war room type situation with volunteers arranging for beds, oxygen and basic needs of not just our employees but their family members. I am seeing fathers arranging for equipment for daughters of distant family members of their colleagues. Not to forget the work of university students and NGO volunteers who are leveraging social media to help even those, whose last name they are unaware of.

As someone who spent the last two weeks, worrying about her entire family struggling with the virus, I am overwhelmed by the kind of support I received to deal with this situation mentally from those around me. As our nation gasps for breath and our healthcare professionals struggle for even a few hours of sleep, let's take a pledge to rework our supply chains, especially critical ones like healthcare, pharma and FMCG.

Probably we can start by acknowledging the work of a supply chain professional when a product reaches our house or by finally having a specialized STEM degree in Supply Chain in our country.

References -

https://finshots.in/archive/why-are-we-running-out-of-medical-oxygen/

https://www.livemint.com/news/india/the-three-reasons-behind-india-facing-an-oxygen-crisis-11619244179142.html