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Pandemic prompts supply chain to focus on reducing risk, building resilience; concerns remain about data accuracy.
Supplyframe recently announced results of a medical device supply chain study, which indicates a gradual path to recovery for the MedTech industry over the next 18 months, according to a release. The study shares where the industry stands, what concerns still remain, and how to best build capacity in response to the global COVID-19 pandemic.
This research is based on a survey of 200 supply chain professionals who work at medical device companies based in North America. Conceptial Inc. conducted the research on behalf of Supplyframe between August and September of 2020. The survey gathered supply chain professionals’ sentiment during a year in which global value chains have been profoundly impacted by the pandemic, and businesses in healthcare and manufacturing saw increased risk as a result.
The vast majority (74%) of respondents predict a recovery could take a year or longer, while a small percentage believe we are either back at full capacity, or that we will never reach that point again. The study further indicates agility, new forms of collaboration, and data intelligence as critical elements that will help them adapt to the post-pandemic business landscape.
“While the MedTech sector is among the hardest hit by the global pandemic, resulting in historic demand spikes and equipment shortages, it is also characterized by unparalleled innovation and collaboration from people around the world,” Steve Flagg, CEO of Supplyframe, says in the release. “With the pandemic still a reality in our day-to-day lives, it is clear that a new approach to supply chain planning and collaboration is required.”
The survey identified the top medtech supply chain risks to be supply shortages (15%), lack of alternatives (12%) and delays in production issues (12%). Increasing the qualifications of multiple suppliers in the product design phase to improve supply chain resiliency was the most frequently cited strategy for mitigating these risks.
To prepare for the next pandemic or natural disaster:
“Establishing a trusted network of suppliers who can quickly adapt to shifts in demand and availability is a critical theme of this study,” adds Flagg. “New risks and uncertainty require new ways of making decisions, including looking outside of the traditional medical supply chain.”
The study further suggests there is a significant disconnect between data available to make planning and manufacturing decisions, and the perception around the quality of available data. An overwhelming 92% of survey participants emphasized the importance of accurate COVID-19 case data to correctly forecast demand requirements and inform manufacturing efforts. However, 84% expressed worries about how COVID-19 case data is being collected and reported in the U.S.
“Looking at these responses, it’s clear that organizations are seeing the importance of demand planning and de-risking the sourcing process,” says Flagg. “While these are sound options, they are merely goals without any kind of data or intelligence to empower real changes. Until we embrace this digital transformation, the industry will continue to face challenges."
He adds procurement is often focused on reacting to supply challenges as they appear, but medical equipment companies and other manufacturers that rely on semiconductor and electronics component suppliers can instead use data intelligence to get a broader view of what’s happening in their supply chains so they can build resilience into these solutions upfront
“Supplyframe’s Design-to-Source Intelligence Platform provides billions of continuous demand, intent, supply, and risk signals within the supply chain," Flagg says. "This provides engineering and procurement teams with the data intelligence they need to make the most informed decisions throughout the product lifecycle. As a result, manufacturing companies can lower the potential for shortages, increase their profitability, and enhance their longevity, resiliency and success.”