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Medical equipment manufacturing is struggling right now, with operations and supply chains being tested in ways that they never have been.
One issue is the sheer disruption to Chinese manufacturing, which ground to a near halt in the aftermath of the COVID-19 coronavirus’s spread out of Wuhan. That disruption has had global impacts. CNBC reports, for example, “Overall, roughly 20% of U.S. retailers’ supply chains are exposed to China, according to data pulled by Cowen & Co.”
Part of the problem: it’s not just finished goods that come from China, it’s also raw materials that others use in their own manufacturing processes. Consequently, even companies that don’t source directly from China may still feel the pinch if their own vendors rely on Chinese supply chains.
China seems to be getting back on its feet. “We aren’t at 100% capacity yet, and have a seven-week backlog,” Sarah Qiu, a product manager at Huayi Lighting, a lighting fixture manufacturer in China, told Industry Week. “But I think we’ll all be caught up by mid-April. Things are looking better. I’m very happy to be back at work.”
Nevertheless, the disruption has already done damage to the availability of certain goods, and the future remains uncertain.
Another, related issue is lack of preparation among manufacturers worldwide.
Here, the problem is not the impact of supply chain disruption per se, it’s the lack of business continuity and disaster planning worsening the crisis. One publication that specializes in orthopedic equipment surveyed its readers to understand the impact of the coronavirus on their own supply chains. One of the most surprising findings was that nearly half – 43% – indicated that they had no plan in place to replace supply chain shortages with another source!
As the expression goes: those who fail to plan, plan to fail.
That said, no organization has been – or could be – fully prepared for the third major issue: demand outstripping supply for certain medical goods and medical equipment at an unfathomable scale.
3M, known for its N95 respirator masks, has been ramping up its production capacity by adding workers, shifts, and production lines at its plants, and it’s still not able to meet demand. Personal protective equipment (PPE) and critical medical equipment like ventilators are needed now at a scale that no manufacturer was prepared to meet.
There’s a flipside to this issue as well: as more resources are devoted to producing critical medical equipment, fewer resources are devoted to less essential medical equipment. Orthopedic equipment, for example, is expected to see falling demand and supply as elective medical procedures are delayed in favor of preserving healthcare capacity for COVID-19 patients.
One cause for hope, however, is an age-old characteristic of the human race: adaptability. It takes time to shift lanes and rework production processes, but we’re already seeing indications that manufacturers are gearing up to adapt to the new environment caused by the pandemic.
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Critical components for high-quality medical equipment is a specialty at Hoffmann + Krippner. For more information about Hoffmann + Krippner’s COVID-19 preparations and our production capabilities, read our most recent statement and follow news as it updates here. For more information or for answers to specific questions, contact us here.
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