Philip Katen, General Manager and President, Plastikos, Plastikos Medical, and Micro Mold02.03.21
MPO reached out to members of industry to address the following question:
What do you expect will be one significant change within medtech development and/or manufacturing as a result of the pandemic?
In response, Philip Katen, general manager and president of Plastikos, Plastikos Medical, and Micro Mold, said:
Near-sourcing. In North America and Europe, I think there will be a renewed and continued focus to source more medical device components much closer to home (i.e., domestically in the U.S. or at least within North America, and within the other EU member countries for Europe). This includes everything from more “simple/lower-value” items such as basic medical PPE items (which then become extremely valuable overnight, if/when demand surges and global supply chains are constrained or completely overwhelmed), as well as a renewed focus on all those medium-to-high complexity medical device items, parts, components, etc. that may have been outsourced overseas over the past 10 to 15 years.
The COVID pandemic has definitely exposed the inherent, and previously largely ignored, risks of a very far and wide global supply chain, which resulted from approximately 10 to 15 (or more) years of more and more manufacturing being outsourced to Asia (especially China) in search of lower/lowest cost manufacturing options. Fundamentally, those “lower/lowest cost” (Asian) prices did not correctly price in or correctly account for the corresponding underlying, yet very real risks inherent in that strategy.
Moreover, one could argue the COVID pandemic has (at times painfully) revealed some amount “near-sourcing” premium is arguably justified for the additional benefits and value that is largely hidden, yet inherent, in a closer/shorter supply chain, which is more reliable, responsive, nimble, and readily available when needed the most.
Fundamentally, the global medical device industry has been less eager/inclined to outsource to Asia when compared to other industries such as automotive, electronics, and many others, but without question, the COVID pandemic has clearly exposed the very real (and potentially enormous) inherent risks and hidden costs in that global supply chain strategy.
Click here to view more Perspectives on this question.
What do you expect will be one significant change within medtech development and/or manufacturing as a result of the pandemic?
In response, Philip Katen, general manager and president of Plastikos, Plastikos Medical, and Micro Mold, said:
Near-sourcing. In North America and Europe, I think there will be a renewed and continued focus to source more medical device components much closer to home (i.e., domestically in the U.S. or at least within North America, and within the other EU member countries for Europe). This includes everything from more “simple/lower-value” items such as basic medical PPE items (which then become extremely valuable overnight, if/when demand surges and global supply chains are constrained or completely overwhelmed), as well as a renewed focus on all those medium-to-high complexity medical device items, parts, components, etc. that may have been outsourced overseas over the past 10 to 15 years.
The COVID pandemic has definitely exposed the inherent, and previously largely ignored, risks of a very far and wide global supply chain, which resulted from approximately 10 to 15 (or more) years of more and more manufacturing being outsourced to Asia (especially China) in search of lower/lowest cost manufacturing options. Fundamentally, those “lower/lowest cost” (Asian) prices did not correctly price in or correctly account for the corresponding underlying, yet very real risks inherent in that strategy.
Moreover, one could argue the COVID pandemic has (at times painfully) revealed some amount “near-sourcing” premium is arguably justified for the additional benefits and value that is largely hidden, yet inherent, in a closer/shorter supply chain, which is more reliable, responsive, nimble, and readily available when needed the most.
Fundamentally, the global medical device industry has been less eager/inclined to outsource to Asia when compared to other industries such as automotive, electronics, and many others, but without question, the COVID pandemic has clearly exposed the very real (and potentially enormous) inherent risks and hidden costs in that global supply chain strategy.
Click here to view more Perspectives on this question.