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By Hebri Nandita, Mallya Megha, Maheshwari Nidhi Nagrath and Lexie Code

COVID-19 exposed significant vulnerabilities within established medtech supply chains
  • Healthcare systems were inadequately prepared for the magnitude and duration of the disruptions and shortages brought on by COVID-19, particularly because inventory management tended to be periodic and not on a real-time basis.
  • Additionally, medtech supply chains had minimal geographical and supplier diversification, often with an overreliance on a single country (usually China) and on a single supplier.
  • Unlike in other industries, medtech supply chains have traditionally been less inclined towards digital supply networks and automated processes such as demand analysis, which made them particularly vulnerable to any sudden changes in demand or disruptions to global trade
Since COVID-19, what types of changes have been introduced by different stakeholders to improve medtech supply chain resilience moving forward?

Forecasting & Sourcing Technology
Adoption of new technology to improve supply and demand forecasting, sourcing, and flexibility has been expedited
Artificial Intelligence

AI is transforming supply chains by helping suppliers more accurately forecast demand and reliably source products

  • For example: Vamstar, a London based healthcare portfolio company introduced an AI based platform which helps suppliers stay more informed during purchasing decisions and use risk-identification frameworks based on historic purchasing trends in European hospitals.1

Blockchain Technology

Blockchain-based network technologies are being used to onboard and verify suppliers more quickly

  • For example: IBM launched Rapid supplier connect, a blockchain-enabled platform to expedite onboarding and verification of suppliers and bring various government organizations, healthcare facilities, and suppliers onto a single network. Such systems improve transparency, traceability and efficiency in supply chains by implementing a shared ledger to monitor & record transactions.3

3D-Printing

3D printing has made supply chains more flexible by enabling production of certain medial devices or parts in-house

  • For example: Prisma Health, along with Ethicon, manufactured and launched a vesper ventilator expansion splitter within a span of ten days by using 3D printing technology during the early days of COVID-19.2

Partnerships & E-Procurement
Partnerships with non-healthcare companies created new e-procurement platforms that have accelerated sourcing efforts

E-procurement allowed providers to get in direct contact with suppliers, avoiding the time needed for public tenders when necessary. These systems also introduced new and alternative suppliers to help purchasers overcome shortages more quickly. Finally, many e-procurement platforms have been designed to anticipate shortages of essential medical supplies and help manufacturers manage production capacities accordingly

Examples:
  • Bartering & donations via e-procurement systems—Resilinc, a software company, partnered with the Stanford Healthcare and Premier GPO to build an E-procurement platform called The Exchange. It allows hospitals to communicate and share essential medical supplies through a barter system. In addition, interested manufacturers, distributors, and GPOs can donate essential supplies which will be available for hospitals on the platform.4

  • Device-specific e-procurement—AdvaMed, along with Aerospace Industries Association, Google, and 50 other companies belonging to various sectors, launched an E-procurement platform called VentConnect. It allows interested ventilator manufactures to connect with potential distributors and suppliers and ensure the availability of ventilators wherever there is a need.5

  • Locally sourced e-procurement——Italy’s Federation of Associations of Economics of Health Buyers collaborated with Net4market, an E-procurement company, and created a temporary procurement portal where healthcare facilities across the country can check the availability of medical supply stocks from local manufacturers to expedite deliveries.6

Regulations & Policy
Public health organizations’ efforts to relax regulations, share best practices, and assign new responsibilities have reduced supply barriers

E-procurement allowed providers to get in direct contact with suppliers, avoiding the time needed for public tenders when necessary. These systems also introduced new and alternative suppliers to help purchasers overcome shortages more quickly. Finally, many e-procurement platforms have been designed to anticipate shortages of essential medical supplies and help manufacturers manage production capacities accordingly

Global Initiatives to Aid Countries with Supply Shortages
  • The United Nations and World Food Programme have together initiated a UN COVID-19 Supply Chain Task Force. The goal of this task force is to procure and supply essential medical supplies including PPE, diagnostic tools, ventilators, and oxygen concentrators to countries in shortage of these supplies. This initiative is concentrated over countries such as Belgium, China, Malaysia, Ethiopia, South Africa, UAE, and Ghana.7
  • The WHO’s Supply Chain Inter-Agency Coordination Cell in Europe has built tools that will help in cataloguing the list of essential medical supplies including PPE, ventilators, consumables, and diagnostic tools on a priority basis, along with a forecasting tool that will indicate potential upcoming shortages.8

Stockpiling Designates
  • The European Commission, through its Civil Protection Framework known as RescEU, has selected 6 host states including Germany, Romania, Denmark, Greece, Hungary, and Sweden which are stockpiling various medical supplies including vaccines, pharmaceuticals, ventilators, patent monitors, PPE, and diagnostics. These host states are responsible for the proper supply of these medical supplies to its fellow member states.8

Knowledge Sharing and Learning
  • The European Health Public Procurement Alliance, a group of 10 healthcare GPOs across Europe, have come together to share their experiences in order to build best practices in the procurement process, which will ensure efficient supply of essential medical devices wherever there is shortage. The experiences of Italian GPOs, in particular, represented a significant case study to develop such practices.8

Regulatory Accommodations
  • Several governments globally have adopted emergency public procurement regulations. For instance, in the US and Italy, hospital facilities are allowed to communicate directly with any supplier of interest without the regular tender process. In addition, the process for verifying bidders has been simplified to ensure faster procurement, effectively reduced the number of days it would take for finalizing a procurement process.9

Disaster Management Planning
From scenario simulation testing to new emergency preparedness legislation, stakeholders are taking steps to be better prepared for the future
Providers

Using supply chain management technologies, such as enterprise resource planning (ERP) and material management systems, to analyze and track inventory levels effectively.10

Demanding forecast analysis.10

Contingency planning for resource sharing among healthcare facilities.10

Manufacturer and Distributors

Geographical diversification of supply chain and deploying financial risk management plans.11

Understanding various outsourced vendors within the market and their resilience programs.11

Carrying out testing and simulation of various scenarios for assessing the preparedness for future disruptions.11

Determining policy exemption criteria and deploying a crisis management process to accelerate approvals.11

Government

Emphasizing public and private partnerships for emergency medical resources.

Enforcing legislation focusing on building manufacturing and supply chain infrastructure for essential medical equipment in order to prevent medical supply shortages.

Some of those examples are:

  • Made in America Emergency Preparedness act and CARES Act in the US
  • Joint Procurement Act in Europe

"A robust business continuity plan coupled with scenario planning that takes into consideration the entire team i.e. from commercial to delivery of the products is very important in supply chain. This allows us to prepare for the unforeseen events and provides us with multiple options to work with."
– Industry Expert, Medtech Supply Chain

Citations
  • How AI can help European healthcare systems during a pandemic. Antler. April 23, 2020
  • Prisma Health Innovation: Vesper™. Prisma Healthcare. March 25, 2020
  • IBM Helping to Battle COVID-19 Medical Supply Chain Shortages with the Launch of IBM Rapid Supplier Connect. IBM. April 27,2020
  • Digital procurement marketplace connects hospitals responding to coronavirus outbreak. Supply Chain Dive. March 26, 2020.
  • AdvaMed, defense contractors team up to supply ventilator parts. Fierce Biotech. May 6, 2020.
  • COVID-19 Procurement Actions. Medtech Europe. May 25, 2020.
  • How WHO is re-imagining and fixing the links in the supply chains during COVID-19. World Health Organization. May 7, 2020.
  • COVID-19 Procurement Actions. Medtech Europe. May 25, 2020.
  • Public procurement and infrastructure governance: Initial policy responses to the coronavirus (Covid-19) crisis. OECD. July 30, 2020
  • Top 3 supply chain management changes hospitals must make post-Covid-19. Medcity News. June 4, 2020
  • Managing supply chain risk and disruptions. Deloitte.
  • The CARES Act – A Supply Chain Perspective. Logistics Viewpoints. April 1, 2020
  • COVID-19 pandemic shows we must rebuild our national emergency supply chain. The Hill. APRIL 28, 2020