The Georgia Tech Supply Chain and Logistics Institute (SCL) is the largest such group in the world, and it provides researchers with many opportunities to help solve global supply chain and logistics problems. The latest addition is the SIReN (Sentient Immersive Response Networks) Lab, dedicated to research leveraging immersive technologies to enhance human capabilities for engineering and managing supply chains and logistic systems.

The SIReN Lab is an associate international laboratory, the result of a partnership between SCL’s Physical Internet Center and IMT Mines Albi, part of the Mines-Telecom Institute in France. The two organizations have historically collaborated on research surrounding artificial intelligence and its interface with these immersive technologies. The SIReN Lab is an extension and formalization of that relationship.

The U.S. arm of the lab is housed in the H. Milton Stewart School of Industrial and Systems Engineering (ISyE) and is directed by Benoit Montreuil, Coca-Cola Material Handling & Distribution Chair and professor in ISyE. Montreuil is also co-director
of SCL and director of the Physical Internet Center. The French lab is led by Frederick Benaben, head of the Interoperability of Organizations research team at IMT Mines Albi. Because of the virtual nature of the work, it is possible to have researchers from both labs working on the same experiment, in the same environment, at the same time.

SIReN Lab research is centered around four main types of response networks — demand, health, humanitarian, and crisis — and the human response to them. A demand response network focuses on how the supply network responds to demand and how to prepare for this response, rather than the other way around. The health and humanitarian response networks, which have become increasingly visible due to the Covid-19 pandemic, relate to issues like disaster recovery and various healthcare supply chains.

The French lab has a significant emphasis on crisis response networks, in which a group of people work together to respond to a crisis in a smart, fair, and efficient manner.
“We currently have a crisis management project where 10 people in France and a few in the U.S. are working together at the same time in a digital twin environment,” said Benaben. “For example, we can have everyone in a building where they can fight a fire, but we can also have some of them in a virtual control room exchanging ideas and making decisions. The options are limitless.”

Researchers are using tools such as dashboards, simulations, games, and in some cases virtual or augmented reality to allow participants to see — and in some cases experience — a vivid picture of a situation with other players in the network.

“In augmented reality, we reinforce what participants see with facts, maps, graphs, and other information that enhance what they are experiencing,” explained Montreuil. “In virtual reality, we project the user into a virtual world, which can be a very vivid representa-tion of the current world, or it can be an abstract world. It can be a very powerful tool.”
“When we put someone in an environ-ment where they can touch, learn, train, experiment, and ultimately decide, it changes the way they approach the problem,” added Benaben. 
The French lab launched on Nov. 15, 2019. While the spring 2020 launch of the U.S. lab was postponed due to the Covid-19 pandemic, the team already has several projects underway and is fully operational. Eventually, they would like to see additional SIReN labs join the network to further scale the work being conducted.

“We want to become a global leader in making response networks become more sentient and immersive,” said Montreuil. “This is an exciting new approach that we are bringing to ISyE and to the domain.”

The Georgia Tech Supply Chain and Logistics Institute (SCL) is the largest such group in the world, and it provides researchers with many opportunities to help solve global supply chain and logistics problems. The latest addition is the SIReN (Sentient Immersive Response Networks) Lab, dedicated to research leveraging immersive technologies to enhance human capabilities for engineering and managing supply chains and logistic systems.

The SIReN Lab is an associate international laboratory, the result of a partnership between SCL’s Physical Internet Center and IMT Mines Albi, part of the Mines-Telecom Institute in France. The two organizations have historically collaborated on research surrounding artificial intelligence and its interface with these immersive technologies. The SIReN Lab is an extension and formalization of that relationship.

The U.S. arm of the lab is housed in the H. Milton Stewart School of Industrial and Systems Engineering (ISyE) and is directed by Benoit Montreuil, Coca-Cola Material Handling & Distribution Chair and professor in ISyE. Montreuil is also co-director
of SCL and director of the Physical Internet Center. The French lab is led by Frederick Benaben, head of the Interoperability of Organizations research team at IMT Mines Albi. Because of the virtual nature of the work, it is possible to have researchers from both labs working on the same experiment, in the same environment, at the same time.

SIReN Lab research is centered around four main types of response networks — demand, health, humanitarian, and crisis — and the human response to them. A demand response network focuses on how the supply network responds to demand and how to prepare for this response, rather than the other way around. The health and humanitarian response networks, which have become increasingly visible due to the Covid-19 pandemic, relate to issues like disaster recovery and various healthcare supply chains.

The French lab has a significant emphasis on crisis response networks, in which a group of people work together to respond to a crisis in a smart, fair, and efficient manner.
“We currently have a crisis management project where 10 people in France and a few in the U.S. are working together at the same time in a digital twin environment,” said Benaben. “For example, we can have everyone in a building where they can fight a fire, but we can also have some of them in a virtual control room exchanging ideas and making decisions. The options are limitless.”

Researchers are using tools such as dashboards, simulations, games, and in some cases virtual or augmented reality to allow participants to see — and in some cases experience — a vivid picture of a situation with other players in the network.

“In augmented reality, we reinforce what participants see with facts, maps, graphs, and other information that enhance what they are experiencing,” explained Montreuil. “In virtual reality, we project the user into a virtual world, which can be a very vivid representa-tion of the current world, or it can be an abstract world. It can be a very powerful tool.”
“When we put someone in an environ-ment where they can touch, learn, train, experiment, and ultimately decide, it changes the way they approach the problem,” added Benaben. 
The French lab launched on Nov. 15, 2019. While the spring 2020 launch of the U.S. lab was postponed due to the Covid-19 pandemic, the team already has several projects underway and is fully operational. Eventually, they would like to see additional SIReN labs join the network to further scale the work being conducted.

“We want to become a global leader in making response networks become more sentient and immersive,” said Montreuil. “This is an exciting new approach that we are bringing to ISyE and to the domain.”

When one or more coronavirus vaccines receives FDA emergency use authorization, it will launch a public health and logistics initiative unlike any in U.S. history. 

Hundreds of millions of doses will have to distributed nationwide and kept cold until healthcare professionals can administer not one, but two doses to each person. And enough skeptical members of the population will have to be persuaded to receive the vaccine to slow virus transmission.

Beyond those challenges, the distribution effort will have to adapt to unexpected and uneven demand; accommodate recipients who may not return on time for a second dose; train hundreds of thousands of staff from clinics, pharmacies, doctor’s offices, and hospitals; prioritize serving high-risk groups first while encouraging others to wait — all while under tremendous pressure to get the much-anticipated vaccines into use as case counts and the death toll continue rising.

“Time is of the essence because the virus is already so widespread,” said Pinar Keskinocak, the William W. George Chair and professor in the H. Milton Stewart School of Industrial and Systems Engineering (ISyE) and director of the Center for Health and Humanitarian Systems at the Georgia Institute of Technology. “With the pressure on our timeline, knowledge of how quickly the disease is spreading, and the broad U.S. and global need, I can’t think of a comparable public health initiative that has ever been undertaken.”

Shipping and Keeping Hundreds of Millions of Doses Cold

Three vaccines, produced by Moderna, Pfizer and its German partner BioNTech, and Oxford-AstraZeneca, are expected to be available first. The Pfizer-BioNTech vaccine will need to be kept ultra-cold — minus 94 degrees Fahrenheit — on its journey to individual Americans. The Moderna drug won’t have such demanding conditions, but both it and the Pfizer vaccine will tax the existing “cold chain” that keeps vaccines and other temperature-sensitive products in a narrow range of conditions during transport and storage. 

The Oxford-AstraZeneca vaccine will have much less stringent requirements and faster ramp-up in capacity, though early testing suggests its efficacy may be lower than the others. That will create tradeoffs between efficacy versus access and speed in distribution.

Plans already exist to get the vaccines from manufacturers to the states, each of which has developed its own distribution plan. Keskinocak worries mostly about “last mile” plans — getting the vaccines to where they will be injected — and getting individuals to those locations.

“Access is going to be a challenge,” she said. “You may be able to get it to locations where it can be distributed, but you have to make sure the people who really need the vaccine can easily access those locations.”

Cold chain transportation, tracking, tracing, and storage already exist in most areas, but refrigeration could be challenging for rural areas that may be at the end of the chain, especially for the vaccine requiring very cold temperatures beyond the capability of freezers found in most doctor’s offices and clinics. And cold can sometimes be too cold, Keskinocak said.

“We often think about keeping it cold, but sometimes it may be too cold, which is not good. It’s not just whether the temperature exceeded the required level, but also whether it went below that. It is important to keep the vaccine exactly at the required temperature level.”

Pfizer has developed a shipping container that includes a temperature tracking device — and 50 pounds of dry ice to maintain the right temperature during transit. Because it is contained in small vials and the liquid vaccine is diluted for use, the overall volume being shipped will be relatively small, limiting the number of packages that will be moved and stored, Keskinocak noted.

Ultimately, the cold chain may play a significant role in vaccine effectiveness. Currently, the vaccines being produced by Pfizer/BioNTech and Moderna are reported to have a higher efficacy than the Oxford-AstraZeneca vaccine — but only if they can be maintained at the proper temperatures. The timing, magnitude, and duration of temperature fluctuations during transport and before administration could affect that in ways that may be difficult to assess.

“Our current modeling shows that a vaccine that is less effective but that can be distributed more quickly and more widely might work better in some settings than a more effective vaccine, thereby reducing the total number of infections in the population,” Keskinocak said.

If You Build It, Will They Come?

Expectations are that the nation is hungry for a vaccine to escape the horrors of Covid-19. But a recent Gallup survey shows that only 58% of respondents said they planned to receive the vaccine when it becomes available. Boosting that percentage will require a massive communications effort to overcome vaccine reluctance and concerns fueled by the uneven nature of the U.S. pandemic response.

“If we can get the vaccine to locations where people can access it, and we have the necessary syringes, supplies, and PPE, as well as the healthcare staff to administer the injections, it’s not clear that people will come to receive it in large enough numbers,” Keskinocak said. “That’s one major component missing from a lot of the plans that I see at the state level.”

The communications program will have to run in parallel to the vaccine distribution, and they have to be coordinated so that supply meets demand.

“Public health communication and dissemination of information at the right time and in the right language is going to be at least as important and challenging as the logistics of distributing the vaccine,” Keskinocak said. “Communication is going to shape demand to a large extent. If one is more effective than the other, we will have a mismatch between demand and supply.”

Different demographic populations have different levels of trust for medicine in general and vaccines in particular, she said, so communications campaigns will have to focus on issues of concern to those groups. Unexpected variations in vaccine demand caused by these concerns could also create logistical uncertainties.

“We can try to forecast demand, and ship supplies to those locations,” she said. “But historically, we have seen that demand can exceed supply in one location while inventory builds up in another location. We need to avoid this situation of unmet demand and unused vaccine.”

Another issue will be the two doses necessary for the vaccine. The second dose must be received within a narrow range of time for the two-dose vaccine to be effective. Should a second dose be reserved for every person receiving a first dose, or should the goal be to get as many doses out as possible?

“Some people may never show up to be vaccinated, while others will receive the first dose, but may not come back for the second dose,” she said. 

Getting the Program Started

The first available doses will likely go to healthcare workers and first responders who are on the front lines of battling Covid-19. That is expected to be the easier part of vaccination logistics, and the lessons learned there should help with the much more massive vaccination campaign for high-risk individuals and the general public.

As vaccine production and distribution capacity ramp up, other groups will be next in line. While distributing small batches as manufacturers produce it can create some supply challenges, that also allows the system to more easily adjust to unexpected demand.

Even though distributing and administering vaccines is something the U.S. healthcare system does routinely, the size and timeline of this project are unprecedented, Keskinocak noted.

Beyond the logistical and communications needs, the vaccination program will also have a strong information technology component. Administration will likely be by appointment, and each injection will have to be reported to a vaccine registry to provide a record of which vaccines people have received and when.

Vaccinating People Who May Already Be Immune

It’s estimated that the number of reported Covid-19 cases may be just 10% of the actual number of infections in the U.S. Assuming recovery from the virus confers immunity for some period of time means there may be quite a few people who don’t actually need the vaccine right away to be protected. But there are currently no plans to determine whether recipients are already immune before they receive the vaccine.

“There are a lot of people out there who have some level of immunity to the coronavirus,” Keskinocak said. “The plans I’ve seen don’t include the serological testing that would be needed to identify people with some level of immunity, which could be around 30% of the population by the time the vaccine gets out to the general public.”

Testing for immune antibodies could be done ahead of the vaccination program, but that would create an extra step in a process that is already quite complicated. Healthcare systems such as the U.S. Department of Veterans Affairs or certain private insurance plans could include that step, especially if vaccine supplies lag behind demand.

“The big complexity is timing,” she said. “Once vaccines become available, you’ll want to deliver them as quickly as possible to as many people as possible in a very short time frame.”

Annual vaccination campaigns for the seasonal flu set ambitious goals for the population levels they want to reach, but the time challenges will be much greater for the coronavirus vaccine.

“The seasonal flu vaccine becomes available months before the virus spreads broadly, so we have quite a bit of time to administer it before we get into the peak of the flu season,” she said. “We have been in the midst of the Covid-19 pandemic for several months now. We are really late in the game, so we don’t have the luxury of time.”

Keskinocak is cautiously optimistic that the challenges will ultimately be addressed.

“There are certainly still lots of unknowns,” she said. “But the state plans I have seen look reasonable from a supply chain standpoint. Some of the decisions will be made once the states receive the vaccine, and exactly how they do it will be somewhat up to the local jurisdictions. There are still many things that need to be decided to make this unprecedented initiative live up to its goals.”

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Writer: John Toon

As America’s leading research universities ramp up laboratory operations that were shut down by Covid-19 in March, they’re encountering a perfect storm of challenges in providing personal protective equipment (PPE) – surgical masks, cloth face coverings, gloves, hand sanitizer, and disinfectant materials.

Global PPE supply chains have been severely disrupted by the coronavirus pandemic, producing long lead times and unreliable deliveries. At the same time, Covid-19 precautions are mandating the use of PPE in laboratories where it wasn’t required before, such as computer and electronics labs. And as researchers, staff, and graduate students slowly come back to the lab, predicting how many people will be at work on any given day creates yet another unknown. 

At the Georgia Institute of Technology, supply chain and logistics experts have put their knowledge to work on the problem, using the kind of modeling and machine learning technologies that major retailers rely on to keep products on store shelves. In just one month, the research team has built an automated centralized system to replace traditional purchasing systems in which individual labs had to hunt for their own supplies.

By asking researchers to report details of the PPE they use each day, the labs will provide data the system needs to predict demand, allowing Georgia Tech to place large orders and stock a centralized warehouse that will help bridge the gap between supply chain hiccups. Based on usage data, the system will know when each lab’s stock of PPE needs to be resupplied from distribution centers located in 22 major laboratory buildings. The goal will be for each lab to have a robust three-day supply of PPE at all times.

“We need to make sure that every researcher, staff member, and graduate student is going to be protected properly,” said Benoit Montreuil, a professor in Georgia Tech’s School of Industrial and Systems Engineering (ISYE) and director of the Georgia Tech Supply Chain and Logistics Institute. “We are dealing with a very volatile situation for supply capacity, lead times, alternate sources, and reliability. With this system, we can ensure that the distribution of PPE throughout campus will be done in an efficient, seamless, responsive, and fair way.”

With $1 billion in sponsored activity during 2019, Georgia Tech has hundreds of research laboratories studying everything from viral antibodies and stem cells to robotics and electronic defense. In peak times, those researchers are expected to use 400,000 gloves a month and 20,000 surgical masks. With new sanitizing guidelines, they’re expected to use more than 4,000 gallons of hand sanitizer a month – but nobody really knows for sure, because this wasn’t widely required before.

Prior to the Covid-19 pandemic, most labs were responsible for purchasing their own PPE. But with so many labs worldwide now hunting for materials in the same disrupted supply chains, that’s no longer possible.

“Georgia Tech can ensure better success in obtaining PPE by buying in very large quantities instead of asking individual lab managers to try to find stock on their own,” said Robert Butera, Georgia Tech’s Vice President for Research Development and Operations. “We can track down the best suppliers and create a buffer in the system. We’ll also be able to identify who are the most reliable suppliers.”

From individual laboratories, the system needs daily reports of how many gloves, masks, and other PPE are used. The system aggregates the numbers and uses that information to predict future usage, allowing Montreuil and his team to provide information to Georgia Tech’s Environmental Health and Safety (EHS). Baseline information obtained during Phase 1 of the research ramp-up will help plan for PPE needs as the number of researchers increases during Phase 2.

Individual labs won’t need to place orders unless than they encounter an unexpected change in demand. 

“Rather than principal investigators requesting PPE for their labs and having to anticipate demand, they will log usage and the platform will do all the back-end work to make sure there’s a three-day supply in each lab and a two-week supply in the buildings,” Butera explained. “We are switching from making requests to logging usage in real time. People have to log their use of PPE on daily basis to make sure they are supplied.”

The new system will supply an estimated 95% of PPE needed on campus. Other items that are purchased less frequently, such as lab coats and shoe coverings, will continue to be ordered through traditional means. Those other supplies may be added to the system later.

“The idea is to focus right now on the key PPEs that are most critical from a supply perspective,” said Montreuil. “We will be revising consumption predictions on a daily basis and transferring this information into an overall demand forecast for PPEs.”

Georgia Tech’s research enterprise is ramping up in two phases over the summer. The first phase began June 18, and the second will start July 13. The new PPE supply system launches July 1.

To initiate the system, EHS has provided a stock of supplies to each lab, and that initial stock will be replenished based on the new system. In Phase 2 of the research ramp-up, the system will grow to include distribution centers in more than 50 campus buildings. At this point, Georgia Tech Research Institute (GTRI) labs will receive their PPE through a separate supply system.

PPE distribution will begin at a campus warehouse managed by EHS. To meet the predicted demand, the warehouse will regularly distribute supplies to buildings, where managers will in turn supply individual labs. How labs receive their supplies will depend on building-level plans developed by managers, Butera said.

The centralized and automated system will for the first time allow administrators to know how much stock of each PPE item is available on campus. Ensuring adequate stock has become increasingly important with the protection needs of the Covid-19 environment.

While researchers who work with biological and chemical materials are accustomed to using and maintaining PPE stocks, keeping up with face masks and disinfectant stocks will be a new practice for others. 

“In my lab in ISYE, nobody was using PPE before Covid-19 because we are only around workstations and computer displays,” said Montreuil. “Now, ISYE researchers won’t be able to get into the lab unless they have masks and we will provide hand sanitizer. We will have to get used to this change.” 

Georgia Tech has one of the world’s best industrial engineering schools, and supply chain and logistics research is a key part of that. But even that expertise is challenged by the global logistics issues created by the pandemic, he added.

“The basics of inventory replenishment systems are well known,” Montreuil said. “But most of the time, the assumptions made in the models are very different from the environment we have now. With highly disrupted settings around the world, we find ourselves on a new frontier. It’s not a lab problem, a building problem, or a Georgia Tech problem. It’s a global challenge, and it affects everybody.”

Below are some frequently-asked questions about PPE supplies.

Where is the form to log use of PPE?

The form is available at this link. 

Which PPE items are covered by the system?

Consumption of the following items should be reported: Pairs of nitrile gloves by size (S/M/L/XL), pairs of latex gloves by size (M/L), pairs of vinyl gloves, individual surgical masks, individual cloth masks, hand sanitizer by bottle, disinfecting spray by bottle, and disinfecting wipes by package.

How should consumption be reported?

Reporting usage by individual lab occupant would be most useful to the system because it will provide the most detailed data for predicting future use. But if labs cannot report usage by individuals working in the lab, they should provide daily data on the entire lab.

When are labs expected to begin reporting their daily consumption of PPE?

The system is operational now, and labs will be expected to start using it July 1.

Will GTRI labs obtain their PPE through this system?

No, GTRI has a separate system for providing PPE.

How will PPE supplies be restocked from buildings to individual laboratories?

Building managers will receive supplies from EHS and will be responsible for determining how labs will receive replenishment.

What should labs do with empty hand sanitizer and disinfectant spray bottles?

Empty hand sanitizer and disinfectant spray bottles should be returned to building managers for refill from bulk supplies. There is a shortage of bottles and reuse will help prevent shortages.

What is the lead time for PPE materials ordered from suppliers?

That varies according to the item. The median lead time for nitrile gloves has ranged from 11 to 53 days depending on glove size, with shortest for various sizes ranging between 7 and 11 days while the longest ranged between 11 and 130 days, depicting a high volatility. Supply chain challenges for hand sanitizer led Georgia Tech to work with non-traditional suppliers to create an alternative supply chain based on ethanol rather than isopropyl alcohol.

If labs will be provided with a robust three-day stock, how much will be at building depots?

Buildings should have a robust two-week supply of critical PPE items. The adjective robust is important as the aim is not to keep a stock covering an average three-day demand in labs, and an average two-week demand in buildings, but rather enough to cover demand considering consumption and supply stochasticity with degree of confidence. The three-day and two-weeks targets will be dynamically adjusted according to learning of the overall demand and supply chain dynamics.

Where can I get more information about accessing the consumption reporting system?

Please visit https://ehs.gatech.edu/covid-19/isye.

What if labs need certain supplies immediately?

An urgent request can be made using the urgent request form. At this point, ISYE is monitoring the requests and will notify the building manager. In the near future, requests will go directly to the building manager (or other point of contact). 

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As the world contemplates ending a massive lockdown implemented in response to COVID-19, Vinod Singhal is considering what will happen when we hit the play button and the engines that drive industry and trade squeal back to life again. 

Singhal, who studies operations strategy and supply chain management at the Georgia Institute of Technology, has a few ideas on how to ease the transition to the new reality. But this pandemic makes it hard to predict what that reality will be.

“We know pandemics can disrupt supply chains, because we’ve had the SARS experience, but this is something very different,” said Singhal, the Charles W. Brady Chair Professor of Operations Management at the Scheller College of Business, recalling the SARS viral pandemic of 2002 to 2003. But that event did not have nearly the deadly, worldwide reach of COVID-19. 

“There is really nothing to compare this pandemic to,” he said. “And predicting or estimating stock prices is simply impossible, unlike supply chain disruptions caused by a company’s own fault, or a natural disaster, like the earthquake in Japan.”

For more coverage of Georgia Tech’s response to the coronavirus pandemic, please visit our Responding to COVID-19 page.

The earthquake that shook northeastern Japan in March 2011 unleashed a devastating and deadly tsunami that caused a meltdown at a nuclear power plant, and also rocked the world economy. It was called the most significant disruption ever of global supply chains. Singhal co-authored a study on the aftereffects, “Stock Market Reaction to Supply Chain Disruptions from the 2011 Great East Japan Earthquake,” published online in August 2019 in the journal Manufacturing & Service Operations Management.

But COVID-19 represents a new kind of mystery when it comes to something as complex and critical to the world’s economy as the global supply chain, for a number of reasons that Singhal highlighted: 

• The global spread of the virus and duration of the pandemic. “We have no idea when it will be under control and whether it will resurface,” Singhal said. “With a natural disaster you can kind of predict that if we put in some effort, within a few months we can get back to normal. But here there is a lot of uncertainty.”
• Both the demand and supply side of the global supply chain are disrupted. “We’re not only seeing a lot of factories shutting down, which affects the supply side, but there are restrictions on demand, too, because you can’t just go out and shop like you used to, at least for the time being,” he said. “And all this is taking place in an environment where supply chains are fairly complex – intricate, interconnected, interdependent, and global.”
• Longer lead times. “We get close to a trillion dollars of products annually from Asian countries, about $500 billion from China,” Singhal said. “Most are shipped by sea which requires a four-to-six-week lead time. The fact that logistics and distribution has been disrupted and needs to ramp up again will increase lead time. So, it will take time to fill up the pipeline, and that is going to be an issue.”
• Supply chains have little slack, and little spare inventory. While manufacturing giants such as Apple, Boeing, and General Motors have more financial slack to carry them through a massive economic belt tightening, their suppliers, spread out across the globe, come in different sizes, different tiers, “and these smaller companies don’t have much financial slack,” said Singhal, pointing to a report of small and medium sized companies in China, “which have less than three months of cash. They’ve already been shut down for two months, and cash tends to go away quickly.

“Many of these companies may go bankrupt,” he added. “So we need to figure out how to reduce the number of bankruptcies. Government is going to play an important role in this, and the stimulus package the U.S. has approved will be helpful.”

Trying to get a handle on how stock markets are responding to all that has happened is like trying to take aim at a moving target during a stiff wind. Volatility has increased significantly since February 13, when the Dow Jones index reached an all-time high of about 29,500. 

“That’s because we did not expect the pandemic to spread and disruptions initially were low because of pipeline inventory,” Singhal said, noting that since then the Index dropped sharply, to 18,500 on March 23 (a decline of nearly 38 percent), it picked up and was back to 22,000 by March 30. “The same is true of other stock markets. The Chinese stock market was down 13 percent, but they seem to have the pandemic under control.”

While COVID-19 is making it difficult to predict what the market will look like, Singhal has some ideas of which industries will be most affected.

“Travel, tourism, entertainment, restaurants – businesses that rely on people going out—will take a long time to recover, in terms of profitability and stock price, even once the pandemic is contained,” he said. “People are going to be hesitant to travel after all this. Tourism will take a hit.”

Essentials like groceries are surging as people stock up in reaction to being shut in, but this isn’t a long-term trend. Singhal doesn’t expect this trend to continue as shopping habits and store shelves eventually normalize. 

Companies that sell basics, with a strong online presence, will do well, “but industries like automobiles and electronics, which have global supply chains and have a hard time replacing specialized, high-tech components will be affected,” said Singhal, who also has suggestions on the most important issues to address and how to help speed up the recovery and bring supply chains back to normal (or whatever normal looks like after this):

• The ability to bring capacity online, especially for small and medium-sized companies. “Facilities and equipment may need some time to restart,” he said. “Staffing is a big issue. How quickly can you get people back to work? Also, can you get the raw materials and build up the inventory to support production? That may be tough when pent up demand is being released and everybody is competing for limited supplies.”
• Distribution. Lead times already are long, he notes, and a sudden increase in demand for logistics and distribution services as everybody ramps up again could extend lead times.
• Prevent bankruptcies. Government programs need to be established (like the U.S. stimulus package) to keep small- and medium-sized firms in business. This concern extends to second- and third-tier suppliers, and large firms like Apple or Boeing or GM, should do the same for their most critical suppliers.
• Build slack. “Preserve cash, get new lines of credit or draw down lines of credit, maybe cut dividends or stock repurchases,” Singhal said. “And build inventories of critical components.”

Singhal also stresses the need for transparency, up and down the supply chain: “What that means is, companies need to have a good understanding of what is happening to their customers and suppliers, but not just their immediate, first tier customers and suppliers, but also their customers and suppliers, and so on up and down the line.” 

It will be very important going forward for the next several months to monitor the health of the supply chain from both the customer perspective and a supplier perspective, because this is a new world, says Singhal, who adds an optimistic postscript, “It’s a crisis situation now, but I think we can put it back together.”
   
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Writer: Jerry Grillo