October 28, 2022 – COVID-19 and attendant supply chain difficulties have shaken up healthcare providers, manufacturers and distributors. Trust in overseas sourcing, domestic trucking and railroad carriers, and low-unit-of-measure systems has eroded. Certainty that Product A would arrive at Point B in a timely manner and in good shape was replaced with uncertainty.
Providers, suppliers and manufacturers are wondering if they can regain some certainty by increasingly turning to U.S.-based suppliers or whether they should hedge their bets by diversifying even further among global ones.
“During times of disruption, healthcare organizations must prioritize certainty of supply,” says Cristina Indiveri, associate vice president, strategic programs and contract services, Vizient. “They want the confidence to know they have access to essential medical supplies, back-up manufacturing sources and diversified product availability. Organizations are requesting complementary relationships with secondary domestic suppliers to ensure product and product category stability. The objective is balance.”
The consumer press has reported that fervor among healthcare providers and suppliers for the “Made in the USA” brand has diminished along with the threat of COVID-19. For example, an April 2022 article from the Associated Press reported that many U.S. companies that began producing personal protective equipment “with patriotic optimism have scaled back, shut down or given up.” Another article, in Newsweek, reported that most of the 30 small U.S. mask manufacturers in the American Mask Manufacturers’ Association were in jeopardy as demand declined.
“While the demand for domestically manufactured products has fluctuated during the past 12 months, Vizient members are still prioritizing American-made personal protective equipment, facial protection and other critical items,” says Indiveri. “Members are asking for supply assurance via increased supplier and product options. They want diversification and incremental product availability, a balance between just-in-time delivery and stockpile inventory, including domestic products, to create an increased number of products in the supply chain.
According to Vizient Senior President Bryan Grossman, “Members know that the global supply chain fluctuates in ways we cannot control. So while they’re focused on supply assurance, they still prioritize domestic manufacturing as part of a diversified sourcing strategy. … Those medical device suppliers who have been able to stand up additional facilities and source raw materials from a broader supply chain have been more successful in maintaining inventory levels and reducing supply disruptions.”
Read more in the latest issue of Repertoire Magazine.