• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Opinions
    • Top 30
    • Research
    • Supply Chain
    • Device Sectors
    • Directory
    • Events
    • Resources
    • Microsites
    • More
  • Magazine
  • News
  • Opinions
  • Top 30
  • Research
  • Supply Chain
  • Device Sectors
  • Directory
  • Events
  • Resources
  • Microsites
  • Current / Back Issues
    Features
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Reprints
    Subscribe Now
    Advertise Now
    Top Features
    Parylene Coatings for Medical Device Technologies

    The Big Shift: Nearshoring Trends in Medtech Manufacturing

    OEMs Seek Molders Offering Timely Techniques

    Robotic Surgery: Cutting Through to the Latest

    Packaging, Sterilization Considerations Go Part and Parcel with Product Development
    OEM News
    Supplier News
    Service / Press Releases
    Online Exclusives
    Press Releases
    People in the News
    Product & Service Releases
    Supplier News
    Medtech Makers
    Technical Features
    International News
    Videos
    Product & Service Releases
    Live From Shows
    Regulatory
    Financial/Business
    Top News
    TransMed7 Achieves First-in-Human for Heron Soft Tissue Biopsy Devices

    West Pharmaceutical Services Invests in Latch Medical

    Integra LifeSciences Founder Dr. Richard Caruso Passes Away

    NeuroVasc Technologies Begins Treating Patients in Stent Retriever Trial

    Probo Medical Buys Mi Healthcare
    From the Editor
    Blogs
    Guest Opinions
    Top Opinions
    Parylene Coatings for Medical Device Technologies

    The Big Shift: Nearshoring Trends in Medtech Manufacturing

    OEMs Seek Molders Offering Timely Techniques

    Robotic Surgery: Cutting Through to the Latest

    Packaging, Sterilization Considerations Go Part and Parcel with Product Development
    Top 30 Medical Device Companies
    Market Data
    White Papers
    Top Research
    Cooling and Melting the Pain Away

    What Are the Fundamentals of Go-To-Market Strategy in Medical Devices?

    Minding the Gap: How Harmonizing Quality Systems Pays Off

    Building Strong Partnerships Between Medtech and Surgeon-Learning Platforms

    Four Key Considerations for OEMs Transferring a Product Program
    3D/Additive Manufacturing
    Contract Manufacturing
    Electronics
    Machining & Laser Processing
    Materials
    Molding
    Packaging & Sterilization
    R&D & Design
    Software & IT
    Testing
    Tubing & Extrusion
    Cardiovascular
    Diagnostics
    Digital Health
    Neurological
    Patient Monitoring
    Surgical
    Orthopedics
    All Companies
    Categories
    Company Capabilities
    Add New Company
    Outsourcing Directory
    BMP Medical

    Fusion Biotec Inc.

    Arthur G. Russell Co. Inc., The

    Cirtec Medical

    Trademark Plastics Inc.
    MPO Summit
    Industry Events
    Webinars
    Live From Show Event
    Industry Associations
    Videos
    Career Central
    eBook
    Slideshows
    Top Resources
    Medical Computing: COM Express Processes Real-Time Data at the Edge

    The Importance of Building Successful Supplier Relationships

    The Benefits of Outsourcing Innovation in Medtech Manufacturing

    Patching Healthcare Cybersecurity Risks in the Internet of Medical Things

    Leveraging Open Healthcare Data Standards to Improve Medical Device Manufacturing
    Companies
    News Releases
    Product Releases
    Press Releases
    Product Spec Sheets
    Service Releases
    Case Studies
    White Papers
    Brochures
    Videos
    Outsourcing Directory
    BMP Medical

    Fusion Biotec Inc.

    Arthur G. Russell Co. Inc., The

    Cirtec Medical

    Trademark Plastics Inc.
    • Magazine
      • Current/Back Issues
      • Features
      • Editorial
      • Columns
      • Digital Editions
      • Subscribe Now
      • Advertise Now
    • News
    • Directory
      • All Companies
      • ALL CATEGORIES
      • Industry Associations
      • Company Capabilities
      • Add Your Company
    • Supply Chain
      • 3D/Additive Manufacturing
      • Contract Manufacturing
      • Electronics
      • Machining & Laser Processing
      • Materials
      • Molding
      • Packaging & Sterilization
      • R&D & Design
      • Software & IT
      • Testing
      • Tubing & Extrusion
    • Device Sectors
      • Cardiovascular
      • Diagnostics
      • Digital Health
      • Neurological
      • Patient Monitoring
      • Surgical
      • Orthopedics
    • Top 30 Company Report
    • Expert Insights
    • Slideshows
    • Videos
    • eBook
    • Resources
    • Podcasts
    • Infographics
    • Whitepapers
    • Research
      • White Papers
      • Case Studies
      • Product Spec Sheets
      • Market Data
    • MPO Summit
    • Events
      • Industry Events
      • Live From Show Events
      • Webinars
    • Microsite
      • Companies
      • Product Releases
      • Product Spec Sheets
      • Services
      • White Papers / Tech Papers
      • Press Releases
      • Videos
      • Literature / Brochures
      • Case Studies
    • About Us
      • About Us
      • Contact Us
      • Advertise with Us
      • eNewsletter Archive
      • Privacy Policy
      • Terms of Use
    Online Exclusives

    Impact of COVID-19 on the Medtech Supply Chain

    Agility, reliability, and resiliency all describe objectives of a company’s supply chain management system.

    Impact of COVID-19 on the Medtech Supply Chain
    Related CONTENT
    • BMP Medical - Delivering Custom Plastics Manufactured Solutions
    • Nordson MEDICAL
    • Cadence Inc.
    • NTK Cutting Tools USA
    • Oberg Medical
    Joe McBeth, Vice President, Global Supply Chain, Jabil12.16.20
    What COVID-19 has shown us is that too many companies are not fully prepared for the supply chain disruptions they are experiencing. In fact, only ~10 percent of the companies Jabil recently surveyed across seven industries thought their predictive supply chain management approach had performed well during the current pandemic. 
     
    Over the last nine months, Jabil has been actively engaged with customers across multiple industries, working hand-in-hand, responding to supply chain disruptions. It has been incredible to watch innovative supply chain solutions emerge as industries adopt short-term solutions to challenges caused by COVID.
     
    Industries, however, need to adopt long-term, permanent solutions to challenges that arose due to COVID. Groundbreaking innovations addressing supply chain resiliency and product supply chain lifecycle management are needed to ensure future success via pivoting in the face of a future unexpected event.
     
    In the short term, the current crisis created an immediate need to address active supply chain disruptions. Across seven industries and the 715 supply chain decision-makers Jabil surveyed, almost all are suffering supply chain disruptions and negative financial impacts. The hardest hit are the retail and healthcare sectors. Healthcare, in particular, had the highest percentage of respondents that said their companies have experienced negative financial impact greater than $500 million from March to August of this year. 
     
    Component Obsolescence and Shortages
    At center stage for many companies in healthcare is what they didn’t have: a robust predictive supply chain management program implemented and actively addressing disruption. It’s worth noting, though, that not all products have been equally affected. In fact, we are finding that it’s not necessarily the products with thousands of parts from hundreds of suppliers that are affected. Instead, it’s primarily the products with outdated component technologies and component obsolescence driving many of these disruptions.
     
    A case in point: Jabil is working with an existing customer produce a line of emergency use products that saw its demand increase from 1,000 to 50,000 units projected for 2020, a 50-fold increase. Many of these models have market maturity ranging anywhere from six to 30 years. The challenges we faced were numerous. First, we had more than 120 component engineering related issues, which included more than 50 parts that were end-of-life (EOL) or last time buy inventory (LTB). To complicate matters, we had over 300 critical component shortages that we had to manage as well. Second, with component constraints and urgent needs, we created new production planning models designed for scenario planning, in addition to restructuring our internal processes to respond rapidly to the demand. 
     
    Component obsolescence and shortages are challenging problems under normal conditions but in the current COVID environment, they’re amplified that much more. In order to find substitutes for the 50-plus obsolete components, we leveraged internal supply chains for the regulated industries we serve (automotive, aerospace & defense). We were able to find part substitutions by setting up a virtual clearinghouse so the suppliers could work collaboratively with us, together with the customer, to find solutions. 
     
    We found it to be a highly effective engagement strategy. And we’re going to continue to leverage the strategy going forward. Of the 300-plus critical component shortages, we were able to increase output within a matter of weeks, but as these parts are not in high demand, even if they are not technically obsolete there still is no inventory in the pipeline. The result is short-term upsides are followed with gaps for the supply chains to “get caught up.” It is far easier to accelerate a leading supply chain than to restart a lagging or obsolete one. The latter is becoming a significant problem in the healthcare industry due to the rapid increase in technology.
     
    Given the impact of component constraints, one of the other challenges faced by all supply chain management now is how to utilize these constrained resources most effectively. As with many product families, there are common parts shared across the models. The capability to maximize output requires the ability to manage a very complex planning scenario and have both a toolset and skillset that allows answers and options to be reviewed with speed. The goal is to be able to get more product in the field quickly, yet still recognizing the impacts that goal brings across the product family. With the example I shared, the scenarios were so complex that we ended up expanding our role with the customer. We quickly added more predictive planning capability. We realized that there were thousands of components, multiple options and multiple ship-to locations. This adjustment is tough enough in normal times, but add in the complications of having supply chains shut down unpredictably due to government lockdowns while simultaneously navigating COVID impacts at the factory level, and you have a tremendously difficult situation. 
     
    Internal Control Measures
    In order to respond rapidly to address these issues, we also had to restructure our internal control measures to accelerate our ability to secure components in high demand before other products used them up. This created a need for both an emergency approvals process and a capability to use 24 hours of the clock, regardless of buying location. As of September, we were still working to fulfill the requested volumes, but by addressing the component constraints and production planning optimization, we have enhanced our already solid footing to de-risk fulfilling the demand curve moving and increased our ability to shorten the supply chains.
     
    Long-life products with embedded older technologies and obsolete components are one of the biggest threats to the future of healthcare supply chain resiliency. But it is more than just obsolete components. Within healthcare, Internet of Medical Things (IoMT) technology will move faster than the pace of change with therapy. Your ability to remain a leader in your domain requires the vision and ability to accommodate these two very different rates of change: technology and therapy. 
     
    Just because you can buy a part doesn’t mean you can sell a product. If your device is a connected device but has fallen a generation behind in connectivity technology, your product will suffer, lose competitiveness and demand will drop. You have to prepare and plan for the lifecycle of your products’ technology and this is likely changing much more dynamically than any other iteration within your product.
     
    Notwithstanding, healthcare and other regulated industries are still challenged with single-sourced components and understandably conservative approaches to product and component changes. In combination, the infrastructure for standard electronics is not likely to morph dramatically. For these reasons, we don’t believe there will be a massive reshuffling of the healthcare supply base because of COVID. Supplier relationships are critically important and can take years to build and train. The complexity in electronics and the cost to re-shore would be astronomical, increasing healthcare manufacturing costs dramatically. The cost to rebuild a semiconductor fab is in the billions of dollars. One industry surely will not be able to bare that cost burden alone.
     
    Regionalizing Supply Chains
    There is significant discussion about regionalizing the supply chains and for certain this will happen, but it will not be what people think. 
     
    Component suppliers of standard components will not likely change much of their footprint.  But there are answers creating more security than what exists today. The balance sheet has been, and will likely continue to be, the solution for creating some level of “regional available inventory.” Multiple approved sources will continue to be an obvious simple answer as this is usually not very time consuming or expensive to do. With that said, approval of multiple suppliers is only part of the answer. If the supply chains become constrained, if you are not already buying from the supply base, you may end up still waiting as the whole world will be pursuing the supply base that is not constrained. Having orders on the books is a very powerful way to help guarantee priority setting.
     
    Regionalizing “custom” mechanical components might be a solution with more logic to it, but it’s no less expensive. Metal fabrication, metal machining and injection molding are services available in every geography at multiple price points and consistent with commodity economics. The issues are both the cost of dual sourcing across geographies with very different price points and the cost of tooling. This suggests that you could use either the balance sheet solution (as referenced earlier) or actually attack the problem by using the P&L, or a combination of both.
     
    The most obvious solution is one that has been in play prior to COVID: regionalizing the assembly and manufacturing of the product within the consuming region while also having some form of supply flexibility statistically sized (based on the amount of time it will take to repair the node). The right way to look at risk is to be agnostic. The precise type of risk doesn’t matter—what matters is the vigilance for understanding the architecture of a supply chain and the intimate technical details of how components are made and the details of who uses and how those supply chains perform.
     
    Global supply chains are here to stay. It can take years to develop a supply base, at great expense, but it can’t be easily undone. Therefore, investing in the supply base and in risk management tools like predictive supply chain lifecycle management is the best path forward in the post-COVID world.
     
    Focus of Customers
    What actions are customers taking right now to address COVID-related supply constraints? From a short-term perspective, process and logistics optimization are key. In dealing with a pandemic response, our survey found that nearly all companies (98 percent) have made changes. Nearly half optimized their processes to streamline response times to process recovery or increased incident management coordination. Another 47 percent, nearly half, deployed new technology in areas including supply chain visibility, risk management and additive manufacturing.
     
    Logistics
    One of the unique challenges of the pandemic is related to global logistics. Between lockdowns, border closures and travel restrictions, many supply chains were in a complete standstill. As a result, 44 percent of our survey participants had to quickly identify new options for international shipping. Others pursued a combination of different changes to alleviate their logistics issues. 

    The pandemic continues to drive higher rates due to capacity constraints across all regions. Greater visibility, transportation management optimization and planning can help reduce costs while providing predictability in delivering materials and products to their desired destination.
     
    Looking Forward: Agility, Resiliency, Predictability and Speed
    Over the next two years, OEMs will be laser-focused on their ability to respond rapidly to disruptions and reduce their risk. In addition, they will be working on their ability to predict shifts in the supply chain to appropriately (and proactively) respond to it. Where we see the most need for predictive supply chain management tools are to help plan for component obsolescence and switching out older technologies.  
     
    The real solution requires a change in the definition of partner. Redefining who is best positioned to lead efforts related to technology, supply chain networks and therapy. Therapy is pretty clear but there is a lot more debate on how EMS can add more value in product development, technology roadmaps, lifecycle management and managing complex supply chain. The biggest risk going forward is simply not changing anything. Good partners shouldn’t  allow that as a recommended path forward.
    Suggested For You
    BMP Medical - Delivering Custom Plastics Manufactured Solutions BMP Medical - Delivering Custom Plastics Manufactured Solutions
    Nordson MEDICAL Nordson MEDICAL
    Cadence Inc. Cadence Inc.
    NTK Cutting Tools USA NTK Cutting Tools USA
    Oberg Medical Oberg Medical
    Rootstock Software Rootstock Software
    American Swiss Products Co. Inc. American Swiss Products Co. Inc.
    Simbex Simbex
    RAUMEDIC Inc. RAUMEDIC Inc.
    High Tech Turning Co. Inc. High Tech Turning Co. Inc.
    Nissha Medical Technologies Nissha Medical Technologies
    Beaumont Beaumont
    sfm medical devices GmbH sfm medical devices GmbH
    Coastline International Inc. Coastline International Inc.
    Anjon Medical Technologies Anjon Medical Technologies

    Related Videos

    • BMP Medical - Delivering Custom Plastics Manufactured Solutions

      BMP Medical - Delivering Custom Plastics Manufactured Solutions

      Medical Contract Manufacturing, Design, Assembly & Packaging

    • Nordson MEDICAL

      Nordson MEDICAL

      ...
      Kara Holmstrom, Sr. Marketing & Design Specialist 12.02.21

    • Cadence Inc.

      Cadence Inc.

      ...
      Beth Alltop, Marketing & Communications Specialist 11.23.21


    • NTK Cutting Tools USA

      ...
      Melissa Singher, Senior Product Coordinator 11.22.21

    • Oberg Medical

      Oberg Medical

      ...
      Ken Eck, Marketing Communications Manager 11.17.21

    Loading, Please Wait..

    Breaking News
    • TransMed7 Achieves First-in-Human for Heron Soft Tissue Biopsy Devices
    • West Pharmaceutical Services Invests in Latch Medical
    • Integra LifeSciences Founder Dr. Richard Caruso Passes Away
    • NeuroVasc Technologies Begins Treating Patients in Stent Retriever Trial
    • Probo Medical Buys Mi Healthcare
    View Breaking News >
    CURRENT ISSUE

    July/August 2022

    • Parylene Coatings for Medical Device Technologies
    • Nearshoring Trends in Medtech Manufacturing
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    Vitamin K2 May Ameliorate Polycystic Ovary Syndrome
    Vitamin D May Prevent Changes to Liver Enzymes and Lipid Profile After Exhaustive Exercise
    Omega-3 Fatty Acids Linked to Reduced Episodes of Depression
    Coatings World

    Latest Breaking News From Coatings World

    Vining Ivy: GLIDDEN Paint by PPG’s ‘is 2023 Color of the Year
    Indorama Ventures Posts Record 2Q 2022 Results
    Advanced Polymer Coatings Strikes Series of New Tanker Deals
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    TransMed7 Achieves First-in-Human for Heron Soft Tissue Biopsy Devices
    West Pharmaceutical Services Invests in Latch Medical
    Integra LifeSciences Founder Dr. Richard Caruso Passes Away
    Contract Pharma

    Latest Breaking News From Contract Pharma

    WuXi Advanced Therapies Enters Licensing Agreement with Janssen
    U.S. Alliance Pharma Expands Early Phase Bioanalytical Services
    BioDuro-Sundia and X-Chem Enter Partnership
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Dr. Squatch To Launch a 2nd Star Wars Soap Collection
    Neopac Wins 2 European Tube Manufacturers Association Awards
    Mary Kay Supports International Women's Forum's Latest Research
    Happi

    Latest Breaking News From Happi

    Japonesque Acquires Foot Care Brand Barefoot Scientist
    Inolex Launches New Cannabis-Derived Ingredient for Sustainable Conditioning and Emulsification
    PLZ Personal Care Makes Key Leadership Appointments
    Ink World

    Latest Breaking News From Ink World

    BASF Breaks Ground on Riverfront Park in East Newark
    Roland DG Corporation to Relocate HQ to Miyakoda, Japan
    Gallus Launches Gallus One, Its First Fully Digital Inkjet Label Press
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    FINAT reports decrease in labelstock consumption during first half of 2022
    Color-Logic partners to feature metallics at autumn events
    New Era Converting Machinery heads to The Battery Show
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Tranzonic Acquired by Private Investment Firm
    Monadnock Earns EcoVadis Gold Rating
    Suominen Announces Price Surcharges
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Integra LifeSciences Founder Dr. Richard Caruso Passes Away
    FDA Clears CTL Amedica's Navigation Instrument System
    FundamentalVR Raises $20 Million in Series B Funding
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    onsemi Celebrates Expansion of Silicon Carbide Production Facility in New Hampshire
    Applied Materials CTO Dr. Om Nalamasu Receives IEEE Frederik Philips Award
    Weekly Recap: ALTANA, Universal Display and Emerson Top This Week’s Stories

    Copyright © 2022 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login