Coronavirus and Medical Device Manufacturing
By Sean Fenske, Editor-in-Chief | 03.13.20
ODT sent out a brief survey to our readers to gain feedback about the impact of the virus on their business.
By this point, there’s virtually no one left who hasn’t been impacted in some way by COVID-19 (a.k.a., Coronavirus). Whether you know someone who’s infected, or more likely, have a child whose school has been closed, planned to attend a since cancelled event, or even faced empty shelves at the supermarket, you’ve experienced an effect. It’s certainly a topic we’ve discussed here at ODT, whether it was regarding our cancelled trip to Orlando to attend the AAOS annual meeting or we were fortunate to be planning the ODT Forum every other year (current plan is for April 2021 in Memphis).
All the news surrounding the virus had us curious about its impact on our readers—both of sister publication Medical Product Outsourcing (MPO) and ODT. We sent out a brief survey to our list to gain feedback about the impact of the virus on business. Some results came back that met with our expectations, but there were a few responses that caused me to raise an eye-brow.
Given how fast the news surrounding this virus changes, it’s important to understand the timeframe for this survey. Our push for responses began late in the day on Friday, March 6, and I’m reviewing the results on Wednesday morning, March 11. In that short period of time, we had responses (again, from both MPO and ODT readers) from 111 representatives from indus-try, the majority identifying themselves as corporate management (42). Further, those from medical device OEMs (36) and contract manufacturing firms (23) were the primary respond-ents.
When asked on a scale of 0 (no impact) to 10 (major impact) to what degree COVID-19 had impacted their company’s ability to conduct business, the average score was 3.2. While the score is fairly low overall, there were a handful of responses that indicated 8 and 9.
We also asked for their opinion on whether they expected device shortages (beyond those al-ready in short supply, such as masks and respirators). The split was almost 2:1 between those who said yes and no. Among the 69 percent who said yes, most identified products coming from China as likely in short supply. In addition, a good number of respondents mentioned elec-tronic components and devices, as well as test kits. One comment I did find interesting was from someone who said the EO sterilization issue would likely create more shortages than COVID-19.
One of the surprises in the survey came in the response to a question regarding the degree COVID-19 has impacted the respondent’s company’s supply chain. Using the same 0-10 scale, the average was 2.7. I expected a much higher number, but since most ODT/MPO readers are in the U.S., perhaps the sourcing is mostly local too, resulting in an overall low number. Among those who indicated some level of disruption, the most common items cited were raw materi-als, electronic components, and contract manufacturing. More than a few respondents indicat-ed the issue of communication as well.
Another surprise, and a frightening one at that, were the tallies to the Yes/No question “Does your company have a plan in place to replace supply chain shortages with another source?” Only 57 percent said yes, while a shocking 43 percent said no. The reason I found this so disturb-ing is, while this survey was around COVID-19, having a supply chain back-up plan in place is not unique to address the fallout caused by this virus. As we’ve seen in recent news, many dis-ruptions can create havoc on a company’s supply chain. Whether an earthquake, sterilization issue, tornado, trade war, terrorist event, or some other unexpected interruption, lacking a back-up plan is a problem. And while I understand the delicacy of many of the products in this industry, I’m wondering if some of this is self-inflicted. What I mean is, as many firms look to shrink their supply chains, has redundancy suffered as a result? If a critical part supplier goes down for whatever reason, has the company eliminated the other suppliers of that component as part of a supply chain consolidation strategy? Perhaps this is something companies want to revisit.
Fortunately, sourcing from U.S. companies, in this specific instance anyway, seems to have staved off supply chain issues. More than 95 percent of respondents said their U.S. facilities have not been temporarily closed due to the virus. Compare that to 18 percent who said their company has international locations that have closed due to COVID-19.
Surely, we’ll come out of this issue and there will be a return to normalcy at some point. I hope at that time, medical device manufacturers look at the takeaways and lessons learned from this experience and adjust accordingly.
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com
All the news surrounding the virus had us curious about its impact on our readers—both of sister publication Medical Product Outsourcing (MPO) and ODT. We sent out a brief survey to our list to gain feedback about the impact of the virus on business. Some results came back that met with our expectations, but there were a few responses that caused me to raise an eye-brow.
Given how fast the news surrounding this virus changes, it’s important to understand the timeframe for this survey. Our push for responses began late in the day on Friday, March 6, and I’m reviewing the results on Wednesday morning, March 11. In that short period of time, we had responses (again, from both MPO and ODT readers) from 111 representatives from indus-try, the majority identifying themselves as corporate management (42). Further, those from medical device OEMs (36) and contract manufacturing firms (23) were the primary respond-ents.
When asked on a scale of 0 (no impact) to 10 (major impact) to what degree COVID-19 had impacted their company’s ability to conduct business, the average score was 3.2. While the score is fairly low overall, there were a handful of responses that indicated 8 and 9.
We also asked for their opinion on whether they expected device shortages (beyond those al-ready in short supply, such as masks and respirators). The split was almost 2:1 between those who said yes and no. Among the 69 percent who said yes, most identified products coming from China as likely in short supply. In addition, a good number of respondents mentioned elec-tronic components and devices, as well as test kits. One comment I did find interesting was from someone who said the EO sterilization issue would likely create more shortages than COVID-19.
One of the surprises in the survey came in the response to a question regarding the degree COVID-19 has impacted the respondent’s company’s supply chain. Using the same 0-10 scale, the average was 2.7. I expected a much higher number, but since most ODT/MPO readers are in the U.S., perhaps the sourcing is mostly local too, resulting in an overall low number. Among those who indicated some level of disruption, the most common items cited were raw materi-als, electronic components, and contract manufacturing. More than a few respondents indicat-ed the issue of communication as well.
Another surprise, and a frightening one at that, were the tallies to the Yes/No question “Does your company have a plan in place to replace supply chain shortages with another source?” Only 57 percent said yes, while a shocking 43 percent said no. The reason I found this so disturb-ing is, while this survey was around COVID-19, having a supply chain back-up plan in place is not unique to address the fallout caused by this virus. As we’ve seen in recent news, many dis-ruptions can create havoc on a company’s supply chain. Whether an earthquake, sterilization issue, tornado, trade war, terrorist event, or some other unexpected interruption, lacking a back-up plan is a problem. And while I understand the delicacy of many of the products in this industry, I’m wondering if some of this is self-inflicted. What I mean is, as many firms look to shrink their supply chains, has redundancy suffered as a result? If a critical part supplier goes down for whatever reason, has the company eliminated the other suppliers of that component as part of a supply chain consolidation strategy? Perhaps this is something companies want to revisit.
Fortunately, sourcing from U.S. companies, in this specific instance anyway, seems to have staved off supply chain issues. More than 95 percent of respondents said their U.S. facilities have not been temporarily closed due to the virus. Compare that to 18 percent who said their company has international locations that have closed due to COVID-19.
Surely, we’ll come out of this issue and there will be a return to normalcy at some point. I hope at that time, medical device manufacturers look at the takeaways and lessons learned from this experience and adjust accordingly.
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com
