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Lee Seok Hwai


Supplying the Front Line of the War on Coronavirus

Countries and businesses must fight as one to prevail over the pandemic

Published: Thursday, April 16, 2020 - 12:02

In the trenches of the battle against Covid-19, critical defensive gear and medical equipment are in short supply. Doctors and nurses fighting the nonstop onslaught of the highly contagious coronavirus desperately need more ventilators, test kits, surgical masks, shields, and gowns.

In Spain, healthcare workers are making their own shields or reusing disposable gowns, but 12,000 of them had caught the disease by the end of March. In worst-hit Italy, more than 60 doctors have died. The American epicenter of New York asked for 30,000 ventilators from federal authorities but got only 400.

At the root of the problem lies manufacturing shortfalls, breakdowns in the supply chain, and short-sighted politics, says INSEAD affiliate professor of technology and operations management Prashant Yadav in the first of the INSEAD webinar series, “Navigating the Turbulence of Covid-19.”

The solution, he says, is to rethink sourcing strategies in a holistic rather than piecemeal manner. That’s on the ground. On a broader level, he adds, the final number of casualties will hinge on cooperation, whether it’s among companies involved in the stepped-up manufacturing of critical equipment like ventilators, or countries not restricting and even banning exports of medical supplies, for a start.

“We will have to overcome our political differences, our agency conflicts, and our hyper-nationalism issues to solve this,” says Yadav, who advises U.S. hospital networks as well as large global agencies’ supply-chain response to the pandemic.

Sadly, for some of the gear, such as N95 and surgical masks, the problem is not only that there is not enough of them to go around as demand has spiked around the world. More important, Yadav notes, the links between mainstream suppliers, hospitals, and the people who need the supplies have broken down as a result of initial shutdowns in China, export controls by some countries such as India, and other extraordinary measures that have gripped much of the world since the virus became a pandemic.

“In some instances, ironically, we hear that there are suppliers and manufacturers who are saying, ‘I have surplus supplies to sell,’” says Yadav. “On the other hand, there are hospital sourcing specialists who are struggling to get even very small quantities of supplies.”

Holistic rather than piecemeal

However, shortages are very much a problem when it comes to critical medical equipment like ventilators, which can help preserve the lives of severely ill Covid-19 patients. Even the sum of the world’s stock of ventilators, Yadav warns, is much lower than the number required by any demand scenario for the next 90 days.

Mitigating the challenges will require strategizing sourcing in a holistic rather than piecemeal way, says Yadav. Take test kits, for example. He observes: “In the United States, the bottleneck keeps shifting every week. Sometimes it’s reagents, or an extraction kit, swabs, and machine reagents again. If we work with one product at a time, then we are facing a dynamic shifting bottleneck problem, which we all know in the supply chain world is only going to keep changing our focus week to week.

“So we’ve got to think about an overall strategy for testing, for critical care, and for personal protective equipment. Think about the different elements in that supply chain, identify where the bottlenecks will lie, and then start thinking about individual items.”

Hospital and clinics should also be prepared to adjust their modes of operations based on the shortage severity. Having a plan to deal with differing levels of scarcity and communicating it would help in consolidating demand, which in turn would help our ability to pull together limited supplies.

We are all equal before the virus

For equipment such as ventilators and anaesthesia machines, additional supply may not come online in the next 60 days, even with additional manufacturing muscle from the likes of Ford and GE, which have joined the race to churn out ventilators for surging U.S. demand. But this is also where business can prove its mettle as a force for good.

“Companies that are not in the medical device manufacturing business, but are in discrete part manufacturing, can come in and partner and lend that expertise to medical equipment manufacturers,” says Yadav.

Now is also the time, he adds, for businesses already involved in medical supply manufacturing to work with global agencies to get products out to Africa and Asia. Businesses in logistics, air cargo, and transport have a significant role to play, too, by proactively providing information on existing capacity.

But all that could be undermined by nationalistic restrictions imposed by governments. Until recently India had an export ban on a large number of active pharmaceutical ingredients, personal protective equipment, and certain medtech devices. Germany and South Korea have banned the export of surgical masks.

“We are seeing a very narrow form of nationalism in the healthcare and the medtech value chain, which we have never seen before,” says Yadav. He urges top business leaders to push back at the “single geography and national” mindset.

“It will hurt both our current ability to contain Covid-19... and it will also curb our ability to do long-term innovation in the medtech business. Both of these things depend upon a global system.”

The urgency of global cooperation was underscored by an unprecedented joint letter by the heads of state of Germany, Singapore, Jordan, Ethiopia, and Ecuador. They urge international organizations—including the World Health Organization, vaccine alliances, philanthropies, and Big Pharma—to work together on four pressing objectives, one of which is “rapid production, procurement, and fair and equitable distribution of testing kits and critical medical equipment for all.”

The leaders conclude: “Before this virus, we are all equal and must work together to beat it.”

First published April 1, 2020, on the INSEAD Knowleadge blog.


About The Author

Lee Seok Hwai’s picture

Lee Seok Hwai

Lee Seok Hwai is a senior editor at INSEAD Knowledge.