The destructive impact of Covid19 on lives and livelihoods is likely to accelerate in the near-term before stabilizing and reducing in the long-term. The return to normalcy is unpredictable, both for timing and spheres of life. It has also cruelly exposed the inability of our critical systems, such as, Healthcare, Supply Chain and supply dependency, and Organizational preparedness, to proact, handle, and mitigate a global pandemic. The selfless giving of our front-line workers and social distancing measures seem to be making a dent now. And, a silver lining, is our ability to adapt quickly by working from home and developing a virtual global support community.
In earlier posts, I had proposed the need to build organizational resilience, distributed supply chains, and private-public partnerships for national preparedness and mitigation of another sure-to-come pandemic. I defined organizational resilience comprised of external and internal resilience. Within these categories (click “categories” to view resilience diagram), I proposed key capability levers, or attributes, to aid in improving resilience. For example, internal resilience is captured by people, process, technology, and risk management attributes. External resilience is captured by supply chain and regulation attributes. Each of these attributes are further categorized into sub-attributes.
In this post, I propose how Digital Transformation, one of the technology attributes, can be a forceful ally in encountering future pandemics and global risks. In particular, I discuss the potential of digital transformation in aiding preparedness for people, process, supply chain, and policy resilience, and provide examples in the Healthcare, Manufacturing, and Supply Chain verticals. Let’s examine these in detail.
Digital Transformation in People Resilience: One particular area is in proactive health and wellness management, care management, and disease management. The would make for a physically and mentally healthier population better positioned to fight a pandemic. How do we do that? Here are two examples. One way is to rapidly implement a national interoperable healthcare network proposed by the Government (HHS and CMMS) using common standards centrally focused on advancing interoperability and patient access to health information. This is a central step in advancing interoperability, putting patients at the center of their health care, and ensuring they have timely access to their health information. One important aspect of this network is the concept of a Qualified Health Information Network (QHIN) where patients and providers can access medical information. Another way, is to mine massive amounts of claims data available today to identify disease states, diagnosis, medication, and other medical and wellness parameters to micro-target demographics for particular diseases, such as diabetes, to provide timely interventions, better care management and care quality, with the effect of not only potentially raising the average health of the citizens but also bending the cost curve. Thus, unnecessary waste would be reduced and monies available for spending where needed to support our healthcare providers. We must accelerate the successful deployment of these capabilities nationally to drastically improve our fighting readiness.
Digital Transformation in Process Resilience: Process resilience is the ability of a process to withstand and recover quickly from very adverse conditions. Digital transformation enable interconnected processes reacting rapidly. The following are some examples: (i) for critical supplies and materials inter-connectedness between manufacturers and suppliers at different tiers, aligned with AI and big data analytics, will provide near real-time visibility of safety stock and drive product development, ordering, manufacturing, and delivery. While current ERP systems are very sophisticated within an enterprise, connecting with lower tier globally dispersed suppliers for changes in product demand often occurs late in the cycle leading to stock-outs. We have witnessed this first hand with medical and personal protective equipment availability with Covid19. Digital inter-connectedness will also enable flexible movement between suppliers when needed due to supplier inability, regional or local natural issues, political instability, or local legal and policy changes for production quotas and JVs. Additionally, the turn-around-time for Covid19 test results is currently in days, and not acceptable. Digital capabilities must be used to reduce delivery time for critical-to-need information with new equipment, automated processes, or platforms. (ii) we have seen the inability of many systems to predict and withstand scale and surge. Nowhere is this more evident than in our hospitals. Other examples, include grocery store run-outs, overcrowding and jammed airport arrivals processing. One critical component of a well designed system is its ability to function during surges for short and long duration. That is why, IT systems devote so much time to performance and peak load testing. With the technology at hand, we should develop and deploy sophisticated predictive capacity and resource allocation management systems; unfortunately many organizations still rely on spreadsheet based capacity allocation. This is manual and mostly reactive.
Digital Transformation in Supply Chain Resilience: The dependency of critical supplies including medical and personal protective equipment has been laid bare during the Covid19 crisis. Most manufacturing is in China and we must develop and implement a global strategy of a distributed supply chain. If the government can develop exchange marketplaces for national security critical items, technology marketplaces can be built to monitor and exchange critical supplies and materials. Digital technology can also be the differentiator in selection, implementation, and delivery of multi-source and multi-distribution channels. And the entire operation of the supply chain must use process resilience capabilities noted above. A single manufactured end product like a ventilator or a television set will have hundreds of components sourced from many suppliers and locations. Thus, it is critical for the supply chain and ERP systems to orchestrate, coordinate, monitor, and manage to the lowest component, material, and supplier level.
Digital Transformation in Regulation and Policy Resilience: I mentioned earlier about the need for private-public partnership readiness policies for handling pandemics in the future. Currently, Tesla, GM, 3M, and other organizations are manufacturing medical and personal protective equipment. The examples must be formalized into a partnership framework. Digital capability can be very effective in realizing policies. I earlier mentioned the QHIN policy and its potential for impacting Healthcare. The US should also think about similar policies for critical materials and industries. Digital capabilities can implement the technology and process aspects of these partnerships and networks. It can also be proactively used to minimize disruptions due to changes in foreign local conditions, such as, political instability, quota revisions, market closures, or legal revisions.
The globe and the US continues to suffer from this pandemic. We must prepare to avoid another one.