UP FRONT

A BRIGHT NEW YEAR It’s been a crazy year. Understandably, the COVID-19 pandemic has dominated headlines, policy and our consciousness for nine months. It has also been the primary challenge supply chain professionals have faced.

There have been other challenges this year, including railway strikes in February and blockades related to the construction of the Coastal GasLink Pipeline through Wet’suwet’en First Nation territory in British Columbia.

Other international events have driven uncertainty. A Ukraine International Airlines plane was tragically shot down on January 8 in Iran – killing 176 people on board including 55 Canadians and 30 permanent residents – stoking uncertainty about wider conflict.

It’s easy to look forward to 2020 ending. Hopefully, 2021 will be brighter.

With that in mind, I’ve given some thought to potential trends we may see in 2021. Below are a few optimistic predictions for the New Year.

Several safe and effective vaccines appear on the way. That will help put the COVID-19 era behind us and hopefully the vast majority of Canadians are vaccinated by September 2021. The rollout will also provide an interesting case study in logistics and supply chain management.

Continental free trade has been finalized with the Canada-United States-Mexico Agreement (CUSMA) put into force on July 1. This, along with US president-elect Joe Biden’s inauguration next January 20, will offer more predictable trade relationships into the New Year. A new trade deal inked between Canada and Britain is also welcome news and will hopefully provide even more stability.

While risk can never be eliminated, preparation remains important. Risk management will take a more prominent role in managin supply chains. Hopefully, we’ve learned enough from the past several months that organizations will spend time and resources ensuring that risks are adequately dealt with.

Technology will continue to lend a hand in ensuring that supply chains run smoothly. While supply chain professionals will remain vital to running the show, advances in technology can offer opportunities to limit risk, provide valuable data and insights as well as take care of mundane tasks. This will continue to free up supply chain professionals to take on more strategic tasks.

Finally, supply chain will continue to claim its rightful place at the executive table. If 2020 has taught us anything, it’s that supply chains play a vital role in how the world operates and keeping it running smoothly. Getting PPE and other vital goods to their destinations has been front and centre this year. Supply chain professionals will remain crucial to rolling out COVID-19 vaccines in 2021. Never in peacetime has the field taken such a central, visible role in our health and ensuring a return to normal lives.

These are just some of the more optimistic trends that I see for 2021. Let’s make the most of it. Wishing everyone Happy Holidays and a Happy New Year!

EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca

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THE POST-COVID-19 ECONOMY

LONG TERM, THE VIRUS MAY CHANGE HOW WE WORK

My guess is that when you’re reading this, there will be greater visibility around how the COVID19 vaccine will be allocated in Canada. We’re incapable of producing it. The majority of the manufacture will take place in the US, Great Britain and Germany. It makes sense, to me at least, that citizens of those countries would be first in line.

A legitimate question is whether everyone in those countries who wants the vaccine should be taken care of before anyone in other countries get any. I’m not sure how this should or will play out.

That being said, I think it’s reasonably safe to conjecture that six months from now, at least the majority of those in high-risk cohorts in the developed countries will have been vaccinated. Everything else being equal, this is a good thing. However, we don’t know how effective the vaccine will be. I was shocked to learn that the flu vaccine works approximately 50 per cent of the time. That means it’s basically useless for half the population. What if this is true of the COVID-19 vaccines as well?

POLICY RESPONSE

Let’s do a little bit of arithmetic together. As of late November, there have been about 12,000 COVID deaths in Canada. What if there had been 6,000 deaths instead? Would this have changed the public policy response? I’m not sure it would have. We would still have had the same shutdowns and limitations on our ability to lawfully and peacefully assemble. Now let’s imagine that the vaccine will be 75 per cent effective. This would result in 3,000 deaths. And my guess is that the public policy response would still have been the same. Simplistic cries like “one death is too many!” have seized what is perceived to be the moral high ground.

What this suggests to me is that even after the vaccine becomes wide-spread mid-2021, life will not return to “normal.” There will be a new normal, and here’s what it might look like.

First, the way we’ll be looking at international travel will be fundamentally different for a very long time. There are countries and regions of the world that have done a very good job of stopping the spread of the virus. I think of a country like South Korea. Doesn’t it stand to reason that the country would continue to restrict travel both to and from the country? Doesn’t it similarly make sense that there will be new rules about entry into Canada, assuming that we get COVID-19 under control? It seems logical to me. Bottom line: those regions and countries which rely on international travel will continue to suffer.

EDUCATION

I think frequently of the education business. And it is definitely a business! The reasons why it’s so important for children to be in-class educated is to help in their social development and it allows their parent(s) to make a living at the same time. I have a five-year old son in senior kindergarten who loves going to school every morning.

Meanwhile, I teach college and university courses online, and the model works very well in delivering similar learning outcomes compared to the in-class experience. Student satisfaction seems quite similar, as far as I can tell. There is discussion in the US about eliminating student debt. However, the better solution is to reduce the cost of education, and online achieves that. The in-class option should be available, but those who exercise that choice should be made to pay for it. Post-secondary education will never be the same.

A huge number of “white-collar” occupations have had to work from home during the pandemic. Some people think that once the vaccine is developed, most will be returning to the workplace. I’m not so sure. I believe that at least in the short run workers will be given the choice. But over time, employers will increasingly mandate that most of the hours and work will be done out of the home. This will transfer much of the cost of doing business to the employee, while at the same time, the employee will enjoy both explicit and implicit benefits. An example of an explicit benefit is now you’re spending less money travelling to and from work. An implicit benefit is the time that is being saved. Ultimately, this will lead to greater efficiencies in the system which in the long run benefits all of us.

There are two core strengths of any market economy. The first is its ability to allocate resources in an economically efficient manner. The second is that it allows us, individually, to determine what is most valuable to each of us. And as long as we don’t lose sight of these facts, the post COVID-19 economy will in the largest sense be remarkably similar to the pre-COVID-19 economy. SP

Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.

“Some people think that once the vaccine is developed, most will be returning to the workplace. I’m not so sure.”