**6.1 Recovery framework**

McKinsey [22] has suggested the following three step framework for rapid recovery:


#### **6.2 Recovery sectors**

According to some of the major studies by McKinsey, Economist and others [22–24], the early starters of economy include health care including pharmaceuticals, medtech, diagnostics, hospital and home care services, telehealth/telemedicine, essential items, food and agriculture, FMCG, 3D printing, internet of things (IoT), AI/ML, robotics, smart systems, e-commerce industry. COVID-19 has put the medtech industry at center stage with unparalleled demand for diagnostic test PPE, ventilators, and critical medical supplies. McKinsey [22, 23] has built a detailed model of COVID-19 impact on medical procedures mainly for the United States on the Europe which is used to create a model for predicting the potential impact on medical device sales in consumables and implants. The models consider two broad scenarios for COVID-19 case growth V shape recovery and W shape recovery. In V shape recovery, it is estimated that the material procedures decline by around 70% in the second quarter and up to 45% in third quarter when compared to 2019. It is expected to see a rapid ramp up for the next three forth to catch up on delayed elective procedures. Whereas in W shaped recovery, procedures would decline by 69% and 45% in the second and third quarters respectively.

**Telehealth** potential has been realized after the COVID-19 crisis and telehealth consumer adoption has increased from 11% in 2019 to 76% in 2020 in US along. Approximately \$250 billion or about 20% of all Medicare Medicaid and commercial OP office and home health spend could potentially be virtualized with the help of telehealth. Similar trend has been observed in many countries worldwide.

#### **6.3 Recovery strategies and actions**

It will not be that easy for many organizations to have a detailed analytical understanding of demand variability at local and national level. However, *stress testing* of supply chains with different scenarios with viable product demand and procedures will be very critical for managing the current scenario. Some of the methods suggested to overcome the impact on supply chains [22, 23, 25] includes the following:

Develop a high-risk supply chain disruption-monitoring and response program for countries impacted by the virus and the potential supply chain exposure from Tier 1 and below.

Assign high-risk weighting to suppliers and sub-tiers from emerging and developing countries with less developed healthcare systems that are less prepared.

Conduct a contract review to understand any financial implications of not being able to deliver supplies to manufacturing locations and customers.

Special attention for balancing of supply and demand, building suitable safety stocks are essential for business continuity, particularly with the unpredictable volatility of supply chain functions.

Identify various opportunities at supply side and diversify suppliers to ensure manufacturing capacity and raw material availability.

Establish a robust risk management models to monitor and prepare for shortages in material, manufacturing capacity and work closely with supply chain stakeholders particularly with critical suppliers.

Implement and utilize enhanced risk management, including scenario planning to create preemptive action plans.

Review the New Product Introduction process and utilize design measures to discover or develop alternative sources and routes in order to diversify your value chains. At the same time, analyze cascading implications of changes in volumes, quality and markets.

*Supply Chain Management and Restart of Economy in Post COVID-19 DOI: http://dx.doi.org/10.5772/intechopen.94207*

The most common approach is to use the bill of materials and focus on key components.

Some of the major actions suggested by McKinsey for economy recovery [23] is given below.


Some of the actions suggested for recovery of medtech industry [22] include the following.

*Accelerate capacity* of equipment like PPE, Ventilators, other surgical items etc. that is essential to save the lives of critical COVID-19 patients.

*Maintain capacity* of equipment used in COVID-19 treatment or that requires replacement such as CT machine dialysis equipment or ECMO machines etc.

**D***eprioritisation* of equipment not useful in COVID-19 treatment such as MRI surgical and mammography equipment and etc.

*Supply chain management and reliability:* More than 90% of global annual medical device exports come from countries that are now in some form of quarantine. There for Medtech company should consider activating supply contingency plans repositioning inventory to areas of greatest need and making all reasonable attempts to protect the health and safety of workers on the manufacturing floor.

*Preserving cash*: according to the McKinsey benchmarking analysis the potential for a rapid 3–5% increase in cash flow could be shown additional changes to production like just-in-time inventory pooling and rationalization, and standardization can free up more cash. These initiatives should be rigorously tracked in conjunction with appropriate cash controls and customer considerations.

*Resource relocation and portfolio strategy:* Now is the time to establish processes that can anticipate market demand and shift staffing as needed to quickly accommodate changes this would require increased investment in cross training the employees as well as new processes to rapidly scale up support services.

The company is required to fundamentally rethink the supply chain network and key suppliers as they were already facing pressure to localize in certain markets, after the crisis it will continue to be important for the companies to consider how to balance these pressures that can impact local supplies with potential desires for greater flexibility in capacity. These adaptations could include building more agile organizations, speeding time to market and aspiring to "absolute benchmarks" for product design and development and manufacturing efficiency.

Some of the lessons learned from fast food service organizations like KFC, McDonald etc. include the following which are based on digitalization:

• **Co-creation:** use of user generated content with apps like radio KFC, RJ hunt and design your own bucket challenge.


#### **Strengthening healthcare's supply Chain.**

These are the five specific capabilities that can have a dramatic impact on performance of the healthcare supply chain [26]:

1.Better segmentation of products, markets and customers.

2.Greater agility to reduce cost and increase flexibility.

3.Measurement and benchmarking.


#### **How to address the shortage and improve the safety?**

Supply chain issues create opportunities for counterfeiters and gray market vendors threatening patient safety and cutting into revenues of legitimate companies. Supply chain security breaches are increasing by an average of 33% every year not only in the emerging markets such as China, India & Brazil but also in the developed world. Better supply chain processes are central to increasing patient safety. Therefore, it is recommended that adopting a common global data standard and upgraded grading supply chain processes could/counterfeiting in half returning up to \$15 Billion to \$30 Billion in revenue to legitimate companies to reinvest in further improvements to patient care.

#### **Building a new healthcare supply Chain**

Organizations can learn from the experience of laptop manufacturer in Indian who can accept an order and deliver a customized computers to a European customer in almost a week. Other organizations like pharmaceutical and medical equipment companies can adopt two broad approaches based on internal factors and external factors. Internal factors include – segmentation, agility, measurement while the external factors include- alignment & collaboration [27].

**Segmentation:** Companies such as pharmaceutical and medical device generally follow one size fits all type of supply chains which are proved to be disastrous particularly during pandemic times. Best companies address these problems by segmenting the supply chains according to the nature of product and customers demand and preferences by developing suitable forecasting, production and distribution strategies for each category.

**Agility:** This refers to building and operating supply chains that can better respond to demand shifts due to occurrence of unexpected disruptions in the business. The approaches include cross functional process, understanding of demand and supply scenarios and circumstances, effective communication and transparency across the supply chain.

**Measurement**: Generally, FMCG companies use data driven metrics such as manufacturing index for producing appropriate quantity of stock keeping units (SKUs) across countries and plants. Organizations also uses commercially available benchmarking tools and approaches for guidance and identification of opportunities along with supply chains.

*Supply Chain Management and Restart of Economy in Post COVID-19 DOI: http://dx.doi.org/10.5772/intechopen.94207*

**Alignment**: Refers to building of a cost effective supply chain that could align around global standards that support data interchange processes and capabilities to reduce the errors etc.

**Collaboration**: Many successful organizations collaborate in areas where they have a strength and share the benefits. Collaboration focus on (i) S*election of partners for the potential value of the collaboration; (ii) capabilities and willingness to act as a team; (iii) dedicate resources to collaboration and involve senior leadership in it; (iv) jointly manage performance and measure impact; (v) start out with a long-term perspective.*

According to [25], the supply chains needs a stress test in terms of time to recover (TTR) and time to survive (TTS). TTR is the time it takes for a particular player/stakeholder (supplier, manufacturer, distributor, retailer etc.) in the supply chain to restore full functionality after disruption. TTS is the maximum duration that supply chain can match supply with demand after facility disruption. TTS also estimate each measure under different scenarios of business and Identify its ability to recover from the disaster. Organizations need to have a backup plan when TTR of a stakeholder or facility is greater than its TTS. This helps the organization in quantifying the cost of disruptions and prepare mitigation plans for the most critical parts of the supply chain [25].

At macro level, the economic recovery requires actions such as government stimulus, digitalization, advance technologies like 3D printing, up-skilling/multiskilling of workforce, restructuring of supply chains with better resilience and response, collaboration/alliances, facilitating innovation by start-ups, strengthening research collaboration between government, industry and academia is also very critical for faster recovery.

### **7. Conclusions**

There is a strong relationship between world trade, GDP and supply chain investments around the world during last more than two centuries starting from 1800. As globalization has increased, the world's supply chains have become substantially more interconnected. Moreover, as emerging market economies have steadily come to account for a greater proportion of global GDP, goods often have more stages to pass through before reaching the end consumer.

During last seven decades (starting from 1960s) the economic growth of the world is very significant and also seen many disruptions like Tsunamis, 911 Terrorist attacks, pandemics like COVID-19. Among all the COVID-19 crisis is more significant in terms of health and economy. COVID-19 has led to nearly 5% negative growth of world economy. From national lockdowns to closed airspace and borders, Covid-19 has resulted in unprecedented disruption to the mechanics of most economies, regardless of their size or stage of development. In particular, the erection of these barriers has placed a major strain on the world's supply chains, including essential linkages relating to food and medicines. COVID-19 also created tension between major economies of the world and disrupted global supply chains significantly. Supply chain leaders face pressure to rethink traditional distribution and supplier models. For example, Amazon looks to strengthen its healthcare influence through the expansion of services in the medical supply chain, industry stakeholders are reconsidering traditional hospital-supplier relationships. Data, analytics and technology are playing an increasingly important role in supply chain strategy. A 2018 Global Healthcare Exchange survey [28] showed roughly 60 percent of respondents indicated data and analytics were the highest priority areas for improvement. These changes and trends have pushed the role of supply chain

management into new territory. Now, supply chain leaders are positioned to help lead their organizations to higher levels of customer service with more efficient models [29, 30]. To ensure success amid this changing environment, business leaders including healthcare organizations should place an emphasis on technology, business practices and customer service.
