The Pros and Cons of Tapping into the Offshore Supplier Market for Clinical Products

August 2021

While offshore suppliers of clinical equipment can offer excellent products at low costs, buying from them carries certain risks. Equipment quality may be harder to benchmark, communication can be challenging, and unpredictable events can disrupt your supply. If you’re considering sourcing clinical goods from supplier, here's what you need to know. 

One of the biggest advantages of importing clinical supplies is cost. Manufacturers and suppliers in nations like India and China are likely to have much lower labour costs than their Western counterparts, have less rent to pay and have lower energy bills. These cost savings are reflected in their pricing, which unsurprisingly, can be highly competitive, offering customers low prices and attractive economies of scale.   

There are many long-standing offshore suppliers that are experienced at providing PPE, clinical care products and medical accessories to Australian and New Zealand markets, though their supply methods can vary. Some only offer their products through local intermediaries or joint ventures, which usually means their staff are well-trained in local product requirements, laws and regulations. Their products are usually fully certified to international standards.   

Offshore suppliers such as these can be excellent choices for some types of buyers, but they’re not the ideal solution for everyone. If you are sourcing supplies for an ANZ hospital, clinic or allied healthcare facility, it’s best to consider all the risks and then make an informed decision. Here are some of the factors to consider before choosing between a local or offshore supplier.   

Communication and flexibility 

Communication with offshore companies can be complicated by differences in culture or systems – in some business cultures an affirmative answer to a question can simply indicate a desire to be helpful. You may find yourself needing to work harder, and asking the right questions, to cultivate a relationship that works for you and your supplier.   

Local suppliers are often more responsive and will tend to have lower transport costs, quicker turnarounds and more accessible support, including local representatives.   

After-sales care from offshore suppliers may also feel more impersonal and less geared to your needs. If you’re looking to build a long-term partnership with a supplier you trust, these suppliers may not be the right answer for you. Suppliers with a strong local presence also tend to have a better understanding of the market, and will usually be able to find workarounds or product substitutes much more quickly in event of a disruption. 

Quality standards 

It’s worth looking very closely into the qualifications of any suppliers, local or offshore. Some overseas suppliers may have limited resources and less experience in the Australian market, and it can be harder to verify their credentials. Since the pandemic, many businesses have pivoted to meet the increased demand for protective equipment and critical care products, but not all of them have the expertise to fulfill orders safely and at scale. Many others may be outright fraudulent businesses.  

For any supplier, certifications should be readily available, and they must meet Australian and New Zealand standards. With a distant supplier it’s all the more necessary to be sure quality is high and the company’s pipeline is robust. But the distance and communication gap may make it harder to ensure the quality and appropriateness of the equipment you’re sourcing. 

Making sure you have a reliable contact at the supplier’s end and that their inventory is accessible will help you troubleshoot any issues and assess potential bottlenecks. Speaking to other customers about their experience can also offer a better snapshot of a firm’s capabilities, though bear in mind everyone’s experiences of the same supplier can vary considerably, especially if a different category of products was involved. If these issues of trust and transparency are absolutely critical to your requirements, an accountable, locally based supplier may be a better option.

Currency and costs 

Prices are likely to be quoted in Australian or New Zealand dollars, which removes volatility from your side of the equation. But currency variations can still be an issue when buying from offshore suppliers. If the supplier’s currency dips sharply against the dollar but a deal has already been agreed to, the exporter may find the sale is losing them money, which may impact their ability to fulfill a given order – and their viability as a partner in the future.  

Another factor is wage inflation. An offshore supplier may offer attractive prices thanks to lower labour costs, but wages are rising rapidly in many emerging nations. Any cost saving may not last, meaning your supplier’s deals may only be suitable for the short term.  

Unexpected events  

Regional or global events can have serious ramifications for your supply chain. In 2020, the impact of COVID-19 saw the lead times on raw materials for some medical supplies delayed by several weeks in India.   

High demand for PPE in China, meanwhile, saw Beijing directly intervene to control the export of vital equipment. Other factors such as political instability and changes in local infrastructure can affect offshore suppliers in unpredictable ways. While no supplier can claim to be 100% insulated from global events, those with a strong local network are better placed to ensure local supply remains relatively resilient.  

Long-term stability 

There are undoubtedly great deals available for those prepared to look beyond their shores for suppliers and are willing to manage any complications that may arise. But for health organisations with a low tolerance for supply risks, working with major, reputable suppliers within Australia and New Zealand offers a reliable way to secure quality clinical equipment. The visibility of supply, quality assurance and support can be compelling advantage. Whatever approach you choose, finding a flexible, responsive supplier is essential. 

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