Working With Suppliers to De-risk Your Supply Chain in Times of Crisis

August 2021

COVID-19 has intensified the demand for medical equipment such as PPE and diagnostic devices. It has also tested the resilience of the pipelines that supply those essentials to hospitals and clinics. By considering your own needs and working closely with the right suppliers, you can better manage supply risks during times of crisis.

How the pandemic impacted the healthcare supply chain 

Since the emergence of COVID-19, markets around the world have seen the demand for clinical supplies soar. As suppliers felt the strain and struggled to meet demand, many health organisations had to rely on their inventories to fill the gap while they scrambled for new sources of key products.  

The response to this crisis in the procurement arena was in many ways heartening. Australia’s federal government helped ensure public health organisations had continued access to key equipment such as PPE and ventilators, while some manufacturers pivoted to provide essentials, with even coffee roasters moving to produce hand sanitiser.   

COVID-19 also exposed deep vulnerabilities in our supply chains. With procurement historically having been optimised for costs, Australia imports around 80% of its healthcare products. Such imports don’t just rely on one nation, but often several – a product may use materials from India that are assembled in China, yet be packaged in Europe. COVID-19 underlined the fact that complex pipelines can be affected by many unforeseen factors – while the pandemic dominated the world’s headlines, parts of central China were hit by severe flooding that saw clinical equipment suffer severe delays. 

Disruption in one location can affect many customers, and many buyers who sought new suppliers in desperation have been stung by companies that mis-sold vital products, or simply failed to deliver. Thankfully, there are steps healthcare organisations and facilities can take to de-risk their supply chains.  

Tracking consumption and assessing supply risks 

Within your own organisation, improving visibility and reporting of stock can help track use and identify wastage, as well as evaluating how different products are used across your organisation.  

This may also help standardise product use across different departments, which can simplify your buying process and increase flexibility. A formal risk assessment, meanwhile, can flag concerns related to your workflows and infrastructure that might impact your inventory.  

A risk assessment process allows you to assess not just what parts of your supply chain are vulnerable, but how damaging that vulnerability could be. Typical steps include reviewing: 

• The impact of shortages of individual products on your organisation’s goals 

• Assessing the level of risk to the supply of those products 

• How deep your inventory is 

• Wider trends in the sector 

 This analysis can help you consider value, cost and reward in a structured way, and highlight product lines or suppliers that require particular attention or contingency plans. Establishing potential reserve suppliers is another important step to minimise risk.  

Improving pipeline visibility 

Understanding your suppliers’ stock levels and pipelines will help you avoid shortages of everything from oxygen masks and feeding solutions to sterilisation packs. Some companies may offer dashboards or reports that give you more visibility into their stocking and pricing. 

More broadly, the greater your knowledge about their history, partners and internal processes, the better you can assess the risk involved. Testimonials may be a useful indicator of their reliability, while an ongoing, trusted contact within the supplier’s organisation can help you pre-empt an issue – like a shortage of raw materials further up the pipeline – before it becomes a problem. 

Building communication and trust 

Good communication is vital to protecting your supply lines. Local suppliers can help you minimise risk, as interactions are generally easier and after care support is better. The most important factor, whether your supplier is locally based or offshore, is that you trust them. 

Larger companies with a longer history in the sector will typically have overcome more challenges in the past – and should be able to demonstrate how they have managed them. Responsible suppliers will not just be able to inform you of their inventory but can offer industry insights and guidance which can be invaluable for your organisation. Bigger suppliers may themselves be part of the research drive to solve ongoing health crises like COVID-19 and be able to bring any potential regulatory changes to your attention. 

Minimising supply risks 

Ultimately, researching and assessing a range of suppliers, offshore and local, large and small, will help you find the right supply partners for your organisation and enable you to build robust pipelines. If you understand the risks in your supply chain, and their potential impact, you can cost-effectively manage them. Managing these risks is an ongoing process, not a one-off exercise, which is why nurturing long-term relationships with responsible, flexible and engaged suppliers is so important. Building enduring partnerships with suppliers you trust will be one of your most effective de-risking strategies. 
 

For a versatile and comprehensive portfolio of clinical products and equipment, backed by accountability and experienced local after care, get in touch with Thermo Fisher Scientific. Our product specialists will be happy to arrange a sample for you and demonstrate how our products can create value for your healthcare organisation.