September 1, 2021 – Amid the reports of the Delta variant causing shutdowns of factories in largely unvaccinated parts of Asia, disrupting supply chains and contributing to rising consumer prices, industry stakeholders are monitoring the latest developments and how they may affect the healthcare supply chain.
Heather Mallinckrodt, associate vice president, Contract and Program Services for Vizient, Inc., said the group purchasing organization is in close contact with its contracting suppliers and distributors, closely monitoring supplies that rely on a single region or manufacturing location and lack redundancy solutions.
“At this time, there are not any sustained production disruptions stemming directly from COVID-19 variant outbreaks,” she said. “While there have been intermittent product disruptions, not limited solely to Vietnam, most suppliers have been able to quickly pivot to different production lines or different locations for continuity.”
Vizient has been closely monitoring the Malaysian government’s recent Enhanced Movement Control Order (EMCO), which impacts inter-district/ state travel for individual regions based on infection rates and can impact manufacturing in the region.
“Many of our contracted suppliers have multiple manufacturing locations in Malaysia and have been successful in moving production to locations in non-impacted districts,” Mallinckrodt said. Additionally, suppliers have implemented strict preventive measures and increased vaccinations to keep workers safe. Overall, the impact to production has been successfully mitigated thus far.
Protecting the U.S. healthcare supply chain from significant disruption, trading partners, and the industry as a whole, will require a combination of partnerships and strategies, Mallinckrodt said.
“Increased transparency between suppliers and providers is now more critical than ever. Trading partners must have a better understanding of their own supply chain risks and share that information to mitigate demand spikes and potential production disruptions.”
Providers will also need to develop specific strategies based on their unique needs and risk tolerance. “This may include increased supply (either at the provider or supplier locations), selection of suppliers with domestic or near-shoring manufacturing and self-manufacturing.
Over the past few months, some Vizient members have reported isolated supply chain disruptions that they have been able to mitigate in part with stockpiles of essential supplies.”
Even so, Mallinckrodt said it’s clear that to help providers prepare for potential future supply chain disruptions, “the traditional buyer-seller model must continue to evolve through increased data, technology and clinical solutions.”