CONTRIBUTOR | DAN PETERSON
EDITOR | HELEN WANG
GUEST | JOHN POLOWCZYK
John Polowczyk, Managing Director at Ernst & Young, discussed supply chain resilience past COVID-19 in an episode of Oceanside Chat with host Helen Wang, Professor at the UC San Diego Rady School of Management on April 27, 2022.
The COVID-19 Pandemic highlighted critical weaknesses in the global supply chain as industries, states, and countries competed for limited quantities of critical supplies. Within the United States, few people had more awareness of these problems than retired Navy admiral, John Polowczyk, as he took the lead role for solving the supply chain problems for the White House’s Coronavirus Task Force. John is a professional who understands supply chain resilience like few others in the US Government through his long career as a Navy Supply Corps officer. He credits mentors and key events throughout his career as instilling the robust sense of resilience required to take on his final and most important role as the pandemic caused havoc on supply chains around the globe. His experiences helped inform his key lines of effort to get the country’s supply chain moving following the initial disruptions as he leveraged a Korean War era law to ensure critical medical supplies were sourced, transported, and distributed to those most in need. As the pandemic began to stabilize, he and his team worked to set a path forward for the federal government to increase supply chain resilience past COVID-19 into a future full of uncertainty. John Polowczyk’s career in the Navy spans over three decades, culminating with his service as a rear admiral, hand selected to serve as supply chain lead for the White House’s Coronavirus Task Force in 2020. Upon his retirement, John became a managing director at Ernst & Young.
A Journey from Naval Academy Prep School to the White House
John credits one man with teaching him true resilience early in his career – Richard Stratton. On January 5, 1967, Lieutenant Commander Stratton, a Naval Aviator, was shot down over North Vietnam and subsequently captured. As a prisoner of war, Stratton was subjected to isolation and beatings alongside fellow aviator and future Senator John McCain at the infamous prison known as the “Hanoi Hilton”. This repeated torture continued for 2,251 days (six years and two months) until he was finally released in 1973. About a decade after his repatriation, Richard Stratton was promoted to the rank of captain and served his final role in the Navy as the commanding officer of the Naval Academy Prep School in Newport, Rhode Island where John Polowczyk was enrolled as a student. John credits Richard Stratton in teaching him valuable lessons in surviving adversity at the beginning of his career that he would leverage over his next three decades of service.
From his tactical beginnings managing the supply chain and logistics for a nuclear powered submarine and managing the US Navy’s response to Hurricane Katrina while stationed aboard a ship in the Gulf of Mexico to his more strategic positions managing all of the Navy’s business systems and acquisitions for the entire global force under the Joint Chiefs of Staff at the Pentagon, John Polowczyk’s career has been a true education in creative problem solving and resilience on his own merit. As the US began to move its focus from the global war on terror to planning and training for a more peer and near-peer threat, John found himself focused on deep logistic planning. His attention moved to understanding the Defense Production Act and large-scale mobilization of US industries in case of a larger conventional conflict.
The Defense Production Act (DPA) was established in 1950 in response to the start of the Korean War. Following World War II, the world entered the Cold War with the North Atlantic Treaty Organization and the Soviet Union posturing for the influence and the upper hand around the world. The DPA was brought into law as a way for the US President to strategically manage critical industries through three major sections:
First, requiring businesses to accept high priority contract regardless of profitability for national defense.
Second, to allow the president to allocate materials for production of critical items for national defense.
Third, to allow the president to prioritize items from the civilian economy for defense needs.
Due to John’s background and understanding of the DPA for use by the US Military in case of a large conflict, John was hand selected by the US Department of Defense leadership to augment the US Department of Health and Human Services (HHS) when the US found itself in the midst of a pandemic with a limited stockpile of proper medical supplies. As Rear Admiral Polowczyk began his work digging into the medical supply chain for the HHS, he found himself in front of Vice President Pence during his daily briefing. His knowledge and talents were quickly recognized, and he was reassigned to act as the supply chain lead for the White House’s Coronavirus Task Force for the entirety of the United States.
Problems and Solutions for the US Medical Supply Chain
One of the main issues the US was encountering during the beginning of the pandemic was due to a misalignment in new supply chain needs versus the legacy supply chain design. Hospitals, as well as many other industries, were postured for a steady state environment – steady usage and steady delivery of supplies. This enabled hospitals to escape large sums of money required to hold inventory, however, they soon found themselves on the back foot when COVID 19 not only caused a surge in medical usage, but also a surge in competition from non-medical consumers. John talks about how at the start of the pandemic, there were not any “echelons of supply” to support hospital from a local, state, or federal level. The Strategic National Stockpile (SNS) was founded in 1999 to house medication, vaccines, and medical supplies to augment states and municipalities when faced with a public health emergency. John shares that the SNS was “never designed for a 50 state, six territory, long-term pandemic,” but rather was created to combat a chemical and biological warfare threat of the likes seen in the anthrax letters following September 11, 2001. The SNS was not a part of a federal wholistic plan to manage a medical industrial base. In early 2020, there was no public private partnership with industry for pandemic supplies.
From decades of offshoring manufacturing of critical medical supplies, the United States did not have an industrial base to surge from further than going to 3M and telling them to make more N95 masks. There was, in fact, no detailed plan on who would be responsible for to acquire, store, and distribute the obviously large quantity of supplies that would be needed in a large and prolonged pandemic. This is the environment that John stepped into and was required to fix. He equates his method of finding a solution to all these problems as the same way one would eat an elephant – one bite at a time. The main problem facing the supply chain professionals brought on to solve the medical supply chain issues was time. John established four lines of effort to buy time: preserve, accelerate, enable data exchange, and expand.
The first step is preservation of supplies. This line of effort was meant to buy time by making the supplies people had last linger through decontamination and reuse. This also included attempts to make the current supplies do more, like figuring out how to place multiple people on a single ventilator.
The second line of effort was accelerated. John tasked his team to scour the globe to find and source supplies with federal dollars. John’s one restriction to his team was to avoid competition with commercial or state entities providing supplies to medical personnel. The team was to find new sources of supply and bring it to the United States in the fastest mean available. This meant establishing an airbridge using federal money to fly in supplies, even if it was not economically advantageous or cost effective. They used this airbridge to “prime the [medical supply chain] pump” and quickly reinforce those with the most need as reinforcing supplies made their way through the chain.
The third line of effort, and the one John is most proud of, is enabling data exchange. As engineer W. Edwards Demings once put it, “without data, you’re just another person with an opinion”. John leveraged Title VII of the DPA, providing “authority to obtain information from businesses, as necessary or appropriate, for the administration of the DPA, including information needed for industry studies.” This allowed John to receive business transactional data daily. In this data line of effort, his team first located all N95 masks by integrating all the medical distributers’ enterprise resource planning systems in the US. By mid-April 2020, the Coronavirus Task Force was able to see “what was in every warehouse in the commercial network…, their sources of supply, and what their orders were for every customer [the medical distributers’] had.” The data from these medical distributers covered roughly 95% of all hospital and nursing home beds and enabled the federal government to track both supply and demand across the United States. They further improved on this rudimentary system by enabling hospitals and nursing homes to share their on-hand supply, enabling the federal government to identify healthcare systems at risk of running out of supplies and push supplies as needed. “In the beginning, [the task force] was just managing scarcity, but by the end they were making sure that everyone had what they needed.”
The fourth and final line of effort was expansion. This is an ongoing line of effort that enables the United States to not be reliant on overseas sources and use the DPA to expand US medical industrial base. John mentions multiple new initiatives and legislation currently being worked on. The Department of Transportation announced the launch of a major supply chain initiative, Freight Logistics Optimization Works (FLOW), to help speed up delivery times and reduce consumer costs. This initiative is focused on how the federal government can take in commercial data, protect it, use it to understand bottlenecks, and apply resources to improve freight transportation. He also mentions the America Competes Act and the United States Innovation and Competition Act, both focused on making computer chips in the US but with additional resources for critical items such as medical supplies, public wireless supply chain infrastructure, robotics and advanced manufacturing, and investments in bringing manufacturing back to the US and strategic allies.
The Future of a Resilient Supply Chain System
John defines resilience as the capability to recover quickly and puts a naval twist on it with the saying, you are only as strong as your weakest link. He describes an entire supply chain system of weak links at the start of the pandemic. Almost every piece of the chain was broken by the global disruption – manufacturing, transportation, distribution. Helen Wang adds to John’s definition of resilience by incorporating the requirements of visibility, agility, and redundancy.
When asked if the US is ready to respond to another pandemic in the next five years, John states the vision his task force gave to the Department of Health and Human Services for the Strategic National Stockpile 2.0. John describes the need for HHS to retain a professional stable of supply chain expert’s resident in the staff to oversee US medical industrial base into the future. This base requires surge contracts for manufacturing critical items, a data system to manage the flow from individual hospital stockpiles to state stockpiles, to a national stockpile that provides echelons of redundancy in a public health emergency. John says the nation is not there yet to provide this stockpile, but the momentum is there to improve upon what has been accomplished so far.
John mentions up several themes across all the federal plans and reports moving forward to a more resilient supply chain: dollar investment in infrastructure, a trained workforce, investment in new technologies, but more than anything is the need for good data. The US government needs to better understand the data flow and exchange. They need a more agile manufacturing ability. John sees “an immense amount of activity and it is in the right direction,” but he reminds us “that it is not a light switch.” He sees the requirement of a single czar or agency taking lead to solve this supply chain resilience problem with a focused effort.
What It Takes to Build a Resilient Supply Chain Network?
Editor's Analogy for A New Perspective
Imagine a resilient supply chain system as an intelligent ride-sharing network.
In other words, just like the ride-sharing system, an innovative and resilient supply chain network is built on trust, visibility, agility, predictability, and adaptability.
When painting a picture of supply chain resilience, John brings up an unofficial motto of the US Marine Corps, Semper Gumby, meaning always flexible. This is a play on the Marines’ official motto, Semper Fidelis, Latin for always faithful, but instead referencing the flexible and malleable children’s animated character Gumby. John believes that with the right mindset of supply chain professionals; the right level of redundancy through commercial, state, and national stockpiles; and the right investment into data exchange, infrastructure and training of critical skills, the United States can position its supply chains to be resilient not just for pandemics, but for any national emergency into the future.
 LeBlanc, Paul (March 18, 2020). "Here's how the 1950 wartime law Trump just invoked to produce medical supplies works". CNN. Archived from the original on March 19, 2020. Retrieved March 19, 2020. https://www.cnn.com/2020/03/18/politics/what-is-defense-production-act/index.html
Podcast Creator & Article Editor: Helen Wang
Helen's professional career working on disruptive innovations
has brought her passion, joy, and self-fulfillment. Her career in multinational technology companies, from Apple's first iPhone to Google's self-driving car, has shaped her transformational leadership style. She advises and coaches companies worldwide while serving as the Chairwomen of the Institute for Supply Chain Excellence and Innovation at the University of California San Diego and teaches at the Rady School of Management. In addition, Helen founded the non-profit organization Oceanside Perspective to build an intellectual bridge between the current and future generations of thought Leaders, Innovators, Technologists,
Guest: John Polowczyk
John is the Managing Director at Ernst & Young, and recently served as the White House Supply Chain lead on the Coronavirus Task Force to ensure health care workers get what they need when they need it. John was brought in from the Joint Staff to stabilize the supply chain in response to the pandemic. A career supply chain and logistics professional with 34 years of experience across strategy development, information technology, financial and acquisition management. Previously he served as the Vice Director for Logistics to the Chairman of the Joint Chiefs of Staff. As the Director for Navy Logistics Programs and Business Operations he was responsible for all Navy supply chain policy and operations to include all Navy business systems. During this tour he modernized Navy ERP to meet Navy audit goals. John’s educational experience come from the Executive Development Program, Tuck School of Business, Dartmouth, Hanover, New Hampshire; M.S., National Resource Strategy, National Defense University, Washington, D.C.; M.S., Management (Acquisition & Contract Management), Naval Postgraduate School, Monterey, California; and B.S., Engineering, United States Naval Academy, Annapolis, Maryland.
Contributor: Dan Peterson
Dan Peterson grew up in New England, originally from Connecticut. He attended Boston University where he received a BS in Mechanical Engineering. After college, he was commissioned as an officer in the United States Marine Corps, where he served on active duty from 2011 until 2019. After departing the military, he enrolled in the Rady School of Management at University of California San Diego where he earned an MBA with a focus on Supply Chain and a MS in Business Analytics. Dan currently works for Esri, the global market leader in geographic information system (GIS) software, location intelligence, and mapping, as a member of their Business Analyst team.
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