Chris Oleksy, Founder and CEO, SCHAIN10107.20.23
A media firestorm is currently wreaking havoc on AB InBev and Target for their respective marketing of Bud Light beer and various apparel items. This is not a “how to” column or “what not to do” marketing guide but rather a reminder that narrative-based events, whether fact or fiction, can have considerable repercussions on supply chains. I consider them narratives because whether they are fact, fiction, or a blend of each, the consequential supply chain impacts can be difficult to manage due to the uncertainty involved.
Narratives are not selective and can affect any industry at any time. One narrative currently impacting the medtech industry is the ethylene oxide (EO) sterilization controversy that threatens the medical device supply. This could have dramatic impacts on our entire healthcare ecosystem and must be navigated well and quickly.
The contention surrounding AB InBev, Target, and EO sterilization providers reminds me of the Dow Corning Silicone Breast Implant debate of the early 1980s—a notorious narrative-based event that had dramatic and complicated impacts on healthcare. Embroiled in this controversy were those who believed implant recipients were being victimized and those who claimed a healthy dose of fiction was in play (later coined “junk science”). Regardless of the camp individuals sided with, the debate had such considerable impacts on the healthcare space that U.S. Congress ultimately passed legislation called the Biomaterials Access Assurance Act of 1998 to help ensure the availability of materials for the various products using silicone technology.
Besides the legislation, one of the other positives of the silicone breast implant debate was the personal realization that tools and techniques were needed to ensure supply chain viability. Some of the lessons I learned from this particular narrative follow.
Here is why Hazleton’s advice is so important from a supply chain perspective. If I thought silicone implants would be permanently removed from the market, I’d need a new employer and I probably wouldn’t schedule production runs for the next set of implants needing to be manufactured. I just wouldn’t be able to ignore the countless numbers of breast cancer survivors who depend on this technology to help them recover. But, if I expected the brouhaha to blow over (which it didn’t), I could have created significant scrap materials. The lesson here is to think carefully and focus on facts. I didn’t lose my employer but Dow Corning lost significant business during bankruptcy protection, and avoided creating excessive scrap.
Dow Corning, for example, was at ground zero. The company’s experiences dictated the fates of many along the supply chain stream. Once I mapped out my chain of chains, I knew where the impacts would likely be and that knowledge enabled me to configure the best possible solution in each place and work with both downstream suppliers and upstream customers. It sounds easy, but is actually quite complicated. A truly advanced chain of chains map will yield a successful configuration. However, companies should not wait until a narrative firestorm hits to map its chain of chains because emotions will make it challenging to honestly and accurately chart them.
SCOR didn’t exist in 1984 but upon its development in the mid-1990s, I leveraged Dow Corning’s silicone breast implant narrative to illustrate SCOR’s importance and the ways it could help. When the SCOR model was unveiled in 1996, I explained how I used it during Dow Corning’s firestorm. Since then, SCOR has become commonplace.
I have deployed situation rooms with suppliers and their suppliers, internal departmental resources, and with external customers. More than one situation room may be needed, depending on the touch points of those involved, but the main goals are teamwork and an agreed upon resolution.
I believe the most effective situation room leaders are those from the supply chain world because they are trained to understand how the pieces fit together (or supposed to fit together). Many functional groups work in silos but supply chain professionals are versed in an organization’s entire functional span. These specialists should be the “go to” group managing the cascaded chain of chains and they should deploy the SCOR lexicon to ensure continuity in navigating a firestorm.
Chris Oleksy is founder and CEO of SCHAIN101. He can be reached at chris@schain101.com or by visiting SCHAIN101.com.
Narratives are not selective and can affect any industry at any time. One narrative currently impacting the medtech industry is the ethylene oxide (EO) sterilization controversy that threatens the medical device supply. This could have dramatic impacts on our entire healthcare ecosystem and must be navigated well and quickly.
The contention surrounding AB InBev, Target, and EO sterilization providers reminds me of the Dow Corning Silicone Breast Implant debate of the early 1980s—a notorious narrative-based event that had dramatic and complicated impacts on healthcare. Embroiled in this controversy were those who believed implant recipients were being victimized and those who claimed a healthy dose of fiction was in play (later coined “junk science”). Regardless of the camp individuals sided with, the debate had such considerable impacts on the healthcare space that U.S. Congress ultimately passed legislation called the Biomaterials Access Assurance Act of 1998 to help ensure the availability of materials for the various products using silicone technology.
Besides the legislation, one of the other positives of the silicone breast implant debate was the personal realization that tools and techniques were needed to ensure supply chain viability. Some of the lessons I learned from this particular narrative follow.
Lesson 1: Table All Emotions
I will never forget starting my career as an entry-level scheduler at Dow Corning on June 4, 1984, around the time the silicone breast implant controversy was heating up. As luck (or misfortune) would have it, I was working at the facility that manufactured both the silicone gel and the implants, thus gaining an insider’s look at one of the most difficult supply chain management case studies to date. While it was fascinating and a great learning experience, it was also, quite honestly, an emotional roller coaster. From that narrative, I learned the importance of tabling personal feelings, as emotional decisions most often turn out badly. This lesson came from former Dow Corning CEO Dick Hazleton, who relentlessly reminded his employees to “focus on facts, not emotions and not live by the latest news of the day.”Here is why Hazleton’s advice is so important from a supply chain perspective. If I thought silicone implants would be permanently removed from the market, I’d need a new employer and I probably wouldn’t schedule production runs for the next set of implants needing to be manufactured. I just wouldn’t be able to ignore the countless numbers of breast cancer survivors who depend on this technology to help them recover. But, if I expected the brouhaha to blow over (which it didn’t), I could have created significant scrap materials. The lesson here is to think carefully and focus on facts. I didn’t lose my employer but Dow Corning lost significant business during bankruptcy protection, and avoided creating excessive scrap.
Lesson 2: Map All Supply Chains
Managing a narrative’s emotional roller coaster requires an understanding of your role within the chain of chains ecosystem. Are you a customer, supplier, or both? Many medtech professionals have trouble answering this question because they fail to recognize that every supply chain exists within a cascaded chain of chains. Simply put, all medical device supply chains source goods, manufacture goods, and sell those goods to the next chain, which is sourcing. Therefore, it is critical to map multiple supply levels forward toward first- and second-tier customers and backward toward first- and second-tier suppliers. Once these levels are mapped out, it is easy to color code them (like a heat map) to determine where the firestorm is occurring and its possible supply chain impacts.Dow Corning, for example, was at ground zero. The company’s experiences dictated the fates of many along the supply chain stream. Once I mapped out my chain of chains, I knew where the impacts would likely be and that knowledge enabled me to configure the best possible solution in each place and work with both downstream suppliers and upstream customers. It sounds easy, but is actually quite complicated. A truly advanced chain of chains map will yield a successful configuration. However, companies should not wait until a narrative firestorm hits to map its chain of chains because emotions will make it challenging to honestly and accurately chart them.
Lesson 3: Leverage the Supply Chain Operations Reference Model (SCOR) Tools
My first MPO column was a play on words, borrowed from the milk industry. But instead of asking “Got Milk?” I asked, “Got SCOR?” The SCOR model can help companies navigate a narrative firestorm because every aspect of planning, sourcing, making, delivering, and returning (PSMDR) is impacted. And, since each cascaded supply chain must follow the PSMDR formula, utilizing the SCOR model can help medtech entities deploy a lexicon of terminology for their supply partners. Many current supply chain software packages incorporate SCOR to make it easier to implement.SCOR didn’t exist in 1984 but upon its development in the mid-1990s, I leveraged Dow Corning’s silicone breast implant narrative to illustrate SCOR’s importance and the ways it could help. When the SCOR model was unveiled in 1996, I explained how I used it during Dow Corning’s firestorm. Since then, SCOR has become commonplace.
Lesson 4: There Is No Silver Bullet
I am a huge fan of artificial intelligence (AI) in many areas of supply chain execution but as I noted in my April 2022 column, AI is only as good as its human creators. Although current narrative firestorms may be similar, they have likely not occurred before so there is no way to develop an AI-configured solution for them. There are many tools/techniques EO providers can use in that growing narrative—many of which were proven effective by Dow Corning’s strategy—but AI is not one of them. Firestorms are less tactical in nature (where AI is very powerful) and more strategic, so decisions should be made by actual humans.Lesson 5: Deploy Supply Chain Talent Experience and Leverage Situation Rooms
A narrative firestorm is probably the worst time to create or learn approaches to help navigate the crisis. The focus should be maneuvering through the storm. Those at ground zero (or close to it) should find supply chain talent either in-house or outside the company to shepherd the organization through the crisis. Situation rooms are an excellent way to manage a crisis because the appropriate resources can gather together and configure PSMDR solutions across the cascaded chain of chains. Leveraging my OE-Tier5 approach helps too, as it allows crisis management teams to build the correctly aligned metrics for staying abreast of their progress and ensuring success. Aligning solutions is critical, otherwise companies risk creating another crisis.I have deployed situation rooms with suppliers and their suppliers, internal departmental resources, and with external customers. More than one situation room may be needed, depending on the touch points of those involved, but the main goals are teamwork and an agreed upon resolution.
I believe the most effective situation room leaders are those from the supply chain world because they are trained to understand how the pieces fit together (or supposed to fit together). Many functional groups work in silos but supply chain professionals are versed in an organization’s entire functional span. These specialists should be the “go to” group managing the cascaded chain of chains and they should deploy the SCOR lexicon to ensure continuity in navigating a firestorm.
Conclusion
The EO firestorm has already had or will likely have a significant impact on many cascaded healthcare supply chains. EO is key to the medtech industry—so much so that Congress may need to intervene as it did in 1998 but much earlier in the process. Although it eventually helped the future use and availability of silicone, Congress waited too long to act—the damage had already occurred. Lawmakers should not make this same mistake with EO. As an industry and a country, we need to quickly understand the science, eliminate junk science, manage emotions while focusing on the facts, and intelligently work through the topic. Otherwise, the lessons learned from the Dow Corning narrative will have been for naught.Chris Oleksy is founder and CEO of SCHAIN101. He can be reached at chris@schain101.com or by visiting SCHAIN101.com.