As the coronavirus continues its unfortunate march across the globe, the impact extends to many economic sectors. Beyond the human cost in life and illness, real economic consequences are arising.
Shortages in PPE/safety supplies represent much more than economic impact, though. According to Tedros Adhanom Ghebreyesus, Director General of the World Health Organization, demand for these supplies has risen to 100 times what is normally seen, with costs soaring to 20 times the standard rates.
In addition, the WHO Director General has pointed out that production of PPE/safety supplies should be ramped up 40% and that regulations should be reformed to allow their free movement.
Ghebreyesus attributes this effect to the “widespread, inappropriate use of PPE outside…patient care”. PPE/safety supplies are being hoarded for resale and swept up by individuals panicking, as COVID-19 proliferates.
The Pandemic Supply Chain Network is following WHO directives to reform the provision of these supplies in the face of shortages, according to Ghebreyesus. Members of the PSCN include logistics professionals, distributors and manufacturers, some of whom are now only distributing necessary protective items to health professionals.
While paper masks are being sold online in tremendous numbers, they’re not the central focus of WHO’s concern. The Organization has stated that N-95 respirators (impermeable and used by health professionals to contain the spread of infection) are also in short supply. According to Dr. Mike Ryan, head of the health emergencies program at WHO, supply chains all face the potential “for disruption or profiteering or diversion”.
The fixes available may be robust but the problem is complex, with both private and public players involved and supply chains which are multifarious and difficult to penetrate.
How to manage the shortages (and the supply chain)?
Understanding your supply chain is a key part of managing any shortfall in supply. Understanding the practices of suppliers and gauging the reliability of distributors, manufacturers and transportation entities sub-contracting to your chain is crucial.
And with supply chains implicated or otherwise linked to China, the challenge is even greater. With the origin of the virus located in Wuhan, the country is ground zero for COVID-19. This has impacted labor and labor’s workplaces, leaving facilities short-handed. Something’s got to give. There’s already evidence of collapse leading to economic contraction.
We’re seeing the butterfly effect in real time.
Supply chain management
You’re seeking a supply chain that’s not going to let you down. Reliability and stability are the qualities every company needs to get its goods to market and its services to people who need them. That’s even truer for health professionals.
Lives depend on it.
Here are some helpful strategies for managing supply chains when shortages arise:
1. Diversify the chain
Both the SARS and COVID-19 viruses have demonstrated that diversifying supply chains is an excellent means of distributing impact. With so many roads leading to Beijing it’s clear that sooner or later, gridlock is going to occur.
Diversifying the chain may not be a panacea but with economic impact deriving so abundantly from a single source, it’s clear that more diversity is needed. Health care can ill-afford a dearth of infection-preventing equipment during a viral outbreak, so building diversity into your chain is imperative.
2. Supplier relationships
Supplier relationships at every link of the chain create the transparency, collegiality and sense of common mission of which strong supply chains are made.
Fostering a culture of collegiality and community among suppliers that serves the chain makes it less opaque. Building relationships which focus on common benefit deriving from common purpose keeps goods and services moving.
3. Ownership matters
With PPE/safety supplies now becoming yet another challenge presented by COVID-19, your buyers are anxious.
Be transparent with them about what you’re doing. They are the end users of your products, so ensure they’re included in the discussion of contemporary supply chain challenges.
Great supply chains ultimately serve buyers and their vendors’ continuing relationships with them. Encourage buyers to take ownership of their roles, while reinforcing your commitment to their mission.
Supply chain management in our global age is complex. Engineer it strategically with trusted procurement advisor, CenterPoint Group.
Create a more sustainable supply chain, uncoupled from the vagaries of global health emergencies, with our proven methodology. CenterPoint gives businesses clarity and the data required to more effectively manage PPE/safety supplies shortages.
CenterPoint finds the gaps, then bridges them.
Benefit from strategic sourcing and contractual relationships which fortify your supply chain, even in times like these. Contact us.