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Medtech Business Review | Friday, September 01, 2023
The medical device manufacturing industry must adapt to ongoing supply chain challenges.
FREMONT, CA: Recent global events have exposed the vulnerability of the medical device supply chain, emphasizing the critical importance of specialized labels and efficient logistics. As the vice president of business operations for a leading medical device contract manufacturing company, I have witnessed firsthand the impact of scarcity and supply chain disruptions on production. With the ongoing effects of the pandemic, these challenges persist and may even intensify as new disruptions emerge.
Before the pandemic, the manufacturing sector was already grappling with a shortage of skilled workers, which remains unresolved. Staffing shortages have been well-documented across all sectors, exacerbating the strain on the supply chain. During the pandemic, the demand for certain medical markets decreased as healthcare facilities focused on essential procedures. Additionally, suppliers faced staffing shortages due to illnesses and childcare responsibilities, compounding the challenges. As clinical services begin to expand again, suppliers are struggling to rehire and ramp up operations. Consequently, they may not have sufficient human resources to fulfill orders as swiftly as before the pandemic.
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Adding to the complexity, shortages of specific medical-grade resins used in producing plastic medical devices and accessories have emerged. This includes the transparent tamperproof labels essential for packaging. Even if all the necessary materials for manufacturing a medical device are available, the absence of these labels prevents the completion of the final package. Substituting similar medical-grade plastics is not always feasible, requiring extensive biocompatibility and material equivalency evaluations. While expedited evaluations can be conducted within six to eight weeks for new projects, the timeline may still surpass the arrival of long-lead resins, which typically take 25 to 30 weeks. For already approved products, the involvement of the FDA in the change approval process can further prolong the timeline. Consequently, product delivery is inevitably delayed.
Even if a supplier in another country can provide the required materials, border patrol and regulatory staffing shortages due to the pandemic create additional logjams and delays. Customs clearance and FDA approvals, which used to take a day for products coming from Canada to the United States, can take up to four weeks. Shortages in delivery fleets and drivers further contribute to delays. These seemingly small factors that were previously inconsequential now pose significant challenges. It is crucial to quickly identify potential bottlenecks and allocate sufficient time to accommodate surprises and alternative options.
Suppliers, manufacturers, and OEMs may need to carry larger inventories than before to proactively address supply chain issues until lead times return to pre-pandemic levels. However, this must be a carefully calculated balance, as there are more viable solutions than hoarding. Outside prioritized markets, suppliers limit the quantity of raw materials an individual entity can purchase within designated time frames. Therefore, manufacturers and OEMs must strike a delicate balance, ensuring they have enough inventory to meet long-term needs while considering budgetary and space constraints.
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