CHAPTER 5

Effective Practices

Introduction

The COVID-19 pandemic, declared in early 2020, significantly disrupted global supply chains. Consumer behavior shifted dramatically as lockdowns and social distancing measures became widespread, causing significant shifts from pre-pandemic demand patterns. Surging demand for certain goods, coupled with the disruption caused by lockdowns and safety measures, illuminated the vulnerabilities of a supply chain optimized for efficiency and not necessarily for sudden shifts in consumer behavior. Nearly overnight, consumers were eating out at restaurants less and buying more goods for home consumption, for home renovation, and for remote work and school.

At West Coast ports, greater demand for consumer goods put pressure on port facilities to handle significantly more cargo containers than they did before the pandemic. Similarly, more freight was being moved over roads by truck. This increase in freight movement, coupled with uncertainty about how to safely transport goods by truck during a pandemic, placed a strain on truck stops along major shipping routes. Many truck stops had no spots available for drivers to stop, and some stops limited the services they offered. Though not related to the pandemic, the Colonial Pipeline cyberattack, which occurred during this period, demonstrated how a rapid spike in demand can cause panic buying. In the food supply chain, demand shifted away from food away from home (restaurants) to food at home (delivered by grocery stores), representing two distinct supply chains that are not easily interchangeable. At the same time, workers in food production facilities fell ill with COVID-19, forcing facilities to suspend operations and limiting the supply of certain products as production capacity contracted. Related to the pandemic, hospital supply chains were some of the first to see challenges as demand for personal PPE, previously worn more often in healthcare settings, expanded to the general population. Healthcare facilities faced shortages of PPE, causing them to look at how their internal stockpiles were managed and what changes could be made to reduce their demand for PPE and improve the likelihood that adequate supplies of PPE would be available when needed.

The five case studies in Chapter 4 of this report are examples of how the COVID-19 pandemic and other events during the same period changed the demand “pull” that most modern supply chain operations respond to. The case studies cover topics that include supply chain workforce considerations, the infrastructure supporting supply chains, and measures and actions that supply chain actors and owners/operators of infrastructure can take to keep the flow of goods moving in the face of disruptions. This chapter summarizes the effective practices identified in the case studies and literature reviewed for this report.

Synthesis of Effective Practices

This section explores the effective practices that were identified in the five case studies and in the literature reviewed for the project. Building on the challenges explored in Chapter 3 and the lessons learned from the case studies in Chapter 4, this section will identify effective practices, highlighting how supply chain stakeholders can take action to address the challenges and incorporate the lessons learned.

Physical

Physical supply chain disruptions involve a disruption to the network of physical infrastructure and other assets that the supply chain relies on. A disruption can be caused by a single event (e.g., a hurricane causing direct damage to a bridge) or can represent a longer-term issue (e.g., deferred maintenance causing slower speeds in a section of roadway). In the West Coast ports case study, port facilities had physical constraints that limited the number of containers the ports could process. Developing effective practices to address physical challenges may be more difficult when those disruptions involve significant damage to infrastructure, in addition to the problem of lack of space. Following are some examples of effective practices for meeting physical challenges:

• Build more truck and rest stops at regular intervals along major freight corridors, increase the number of truck parking spaces available at them, and equip them with full amenities (showers, laundry, Wi-Fi) (Matherly, Bye, and Benini, 2021).
• Identify and lease land outside of maritime or airport facilities to temporarily increase the physical area at the port.
• Temporarily relax local zoning regulations to allow for higher stacking of containers at a port facility (City of Long Beach, 2021).

Congestion and Capacity

Congestion within a supply chain system can disrupt normal operations. This congestion might be encountered on a roadway, limiting the movement of freight in trucks, or at a port facility, delaying the arrival of maritime containers (as happened at the West Coast ports in 2021). The truck parking case study brings to light capacity constraints at truck rest and service areas, decreasing the volume of goods moved by road. Finally, the Colonial Pipeline case study identified an example of a capacity limitation in middle-mile fuel distribution. Increasing capacity may be achieved with a short-term fix to put additional resources in the system to process the flow and reduce congestion, or it may require longer-term investment to build new capacity. Some examples of effective practices to increase capacity within a supply chain system include the following:

• Identify and prioritize infrastructure investment needs to fund freight system and capacity needs (U.S. DOT, 2022a).
• Incentivize increases to capacity in supply chain systems. In 2021, West Coast ports introduced incentive programs to encourage truckers to move containers during off-peak hours and to clear containers more quickly from terminals.
• Establish overflow truck parking areas to increase the number of trucks that could stop at a given location. (Several state DOTs and rest area operators took this action.)

Information and Data

Supply chains are organized to respond to demand. The exchange of information and tracking data is an effective way for supply chain stakeholders to monitor and respond to demand signals,

by, for instance, looking at consumer purchasing or data on throughput at a given transport facility (e.g., a port). Inaccurate or nonfunctioning information systems erode the ability of decision-makers in the supply chain to meet demand. The following list describes effective practices for addressing or limiting the likelihood for information and data challenges:

• Improve supply chain data collection gaps and bottlenecks (U.S. GAO, 2023).
• Monitor reports on overseas supply chain operations to inform local operations and predict or prevent disruptions (U.S. GAO, 2020).
• Establish supply chain maps for critical industries (U.S. GAO, 2023).
• Identify and implement early alert systems based on KPIs to provide advance warning of potential disruptions (U.S. GAO, 2020).
• Promote interagency and private sector input for data collection and dissemination (U.S. GAO, 2020).
• Readily available supply chain KPIs, such as travel time reliability (TTR), should be evaluated to find cost-effective methods of reporting and communicating information.
• Create new travel demand models that consider behaviors and responses over trip formulation (Kim, 2023).
• Supply chain planning and decision-making should be driven by data (Kim, 2023).

Security

Security disruptions may occur simultaneously with data and information, physical, capacity, or other challenges. The Colonial Pipeline ransomware attack described in Case Study 2 is an example of a disruption in security that caused a subsequent disruption in capacity. Effective practices in response to security issues involve putting in place safeguards against threats and plans for quickly responding in the event of a security incident. Some examples (National Counterintelligence and Security Center, 2020) include:

• Establish a zero-trust data architecture with encryption and continuous monitoring.
• Create “data clean rooms,” secure environments where multiple parties can collaborate on and analyze data without compromising quality.
• Use unique product ID and other digital tools.
• Create tamper-evident tapes and seals with tracking devices, such as GPS.
• Limit access to maintenance operations.
• Employ a disciplined, structured, secure, and consistent process for disposing of sensitive or classified data to prevent unauthorized access or leaks.

Equipment

Supply chain operations require specialized equipment to move and process goods. For example, forklifts move pallets of items around a warehouse or staging area, cranes lift containers off ships, and specialized truck chassis move containers from port facilities to the shipment’s final destination. When sufficient equipment is not available, operations at a supply chain facility or link between facilities may be significantly constrained, or facilities may have to cease operations altogether (e.g., if a port’s only crane is not functioning). Following are effective practices that can address equipment failure or shortages.

• Invest in modern and flexible equipment. Regularly updating and investing in equipment can improve efficiency and reduce the risk of obsolescence (The White House, 2021).
• Explore alternative sourcing options. Identifying multiple sources for critical equipment can mitigate supply chain disruptions caused by a single supplier (U.S. DHS, 2024).

• Focus on collaboration and information sharing. Effective communication and coordination among stakeholders can facilitate the sharing of equipment resources and reduce the impact of disruptions (Meyer et al., 2019).
• Prioritize resilience in equipment design. Designing equipment with features that enhance durability, maintainability, and interoperability can improve resilience to disruptions (The White House, 2021).

Workforce

Supply chains rely on people at all stages to move goods through the system. In a food supply chain, the workforce includes pickers to harvest crops; drivers to haul crops to processing facilities; food processors at processing facilities to handle, package, and process the goods; drivers to take the processed goods to retailers; and shelf stockers at retail locations to stock and sell the food. During the COVID-19 pandemic, CISA classified supply chain and logistics personnel as essential critical infrastructure workers, signifying how important the workforce is to the successful operation of supply chains. Some examples of effective practices to address workforce challenges include:

• Eliminate transit fares, in order to protect fare collection workers. However, it should be noted that when some transit operators eliminated fares, the result was increased travel and violation of stay-at-home orders (Matherly, Bye, and Benini, 2021).
• Release guidance on when essential workers can safely return to work in a timely fashion. Additional protective equipment or practices may be required to ensure worker safety and health while performing their jobs.
• Cross-train essential workers on different equipment so that they may step into distinct roles in the event of a crisis.
• Monitor the welfare of populations that are disproportionately impacted by disruptions based on the availability of alternate choices, compliance with new requirements, and the speed or rate of response and recovery (Kim, 2023).
• Be mindful of the integration of public health and transportation, including the effect of workforce availability and regulatory conditions, such as government-mandated checks, quarantines, protocols, or operational restrictions (Kim, 2023).
• Identify transportation operators’ regulatory requirements, availability, access to volunteers, necessary clearances, and other workforce conditions (FEMA, 2019).

Regulatory

Regulatory requirements in place for safety, environmental, and other reasons can impact supply chain flow. In normal operations, certain regulations may limit the schedule and duration at which goods move through the supply chain. During a disruptive event, a sudden surge in demand can be met more quickly if those limiting regulations are relaxed. It is important, however, that any proposed change in regulatory requirements be considered against the potential risks or downstream consequences of the change. Regulatory factors can also be managed by having a better understanding of them and planning ahead of time. Following are examples of effective practices for managing regulatory requirements related to supply chain flows.

• Streamline regulations to increase capacity and efficiency, reduce bureaucratic inefficiencies, strengthen competition, and speed up disaster response (U.S. DOT, 2022a).
• Establish an approach to identify and document supply chains (U.S. GAO, 2020).
• Develop organizational supply chain risk management (SCRM) requirements for suppliers (U.S. GAO, 2020).

• Increase understanding of the supply chain and establish best practices for KPIs (U.S. DOT, 2022a).
• Improve cross-sector, multijurisdictional, and multimodal coordination and communication of supply chain needs (U.S. DOT, 2022a).
• Identify regulations, such as hours of service, and which actors control these regulations to understand emergency contingencies and waivers.

Supplier Source

The source of a commodity impacts how it travels to its final destination, the routes along which it moves, and the stakeholders involved. In general, having more suppliers of a given item increases the likelihood that the item will be available in the event of a supply chain disruption to one supplier (or to a handful of suppliers). In addition, lessening the distance between supplier and consumer can make a supply chain more resilient. Following are some examples of effective practices to improve supplier source challenges.

• Diversify the supplier base by engaging multiple suppliers for critical components or materials, in order to reduce the impact of disruptions caused by problems with a single supplier (Meyer et al., 2019).
• Establish a process to conduct a SCRM review of potential suppliers (U.S. GAO, 2020).
• Establish and define clear criteria for selecting suppliers, such as financial stability, quality standards, and ethical practices. Clear criteria can help mitigate supplier-related risks (U.S. GAO, 2021).
• Conduct thorough due diligence for potential suppliers, including background checks and risk assessments, to help identify any red flags or spot potential vulnerabilities (U.S. GAO, 2021).
• Establish contingency plans for responding to supplier disruptions, including strategies for alternative sourcing strategies and maintaining reserve stocks (The White House, 2022).
• Make investments to increase domestic manufacturing capacity for critical components materials, in order to reduce supply chain vulnerabilities to disruptions caused by foreign actors (The White House, 2022).