Emerging from COVID-19 and the Impact on PPE Markets

The COVID-19 Pandemic and outsourced manufacturing strategies left primary suppliers and their customers, the US health system, beholden to extreme supply shortages and extremely volatile pricing.

  • Over the past few decades, the “manufacturers” of disposable medical products in the US transitioned from owning manufacturing facilities and making products, to a completely outsourced model.
     

  • These “manufacturers” now source (purchase) their products from 3rd party manufacturers in low-cost countries (like China) and sell them to their customers under their private brand names.

Image by JAFAR AHMED

Why did they outsource and what did they gain?

COST – The costs of manufacturing, such as labor, energy, and materials, are much lower in certain parts of the World. By adopting an outsourced strategy, suppliers of these healthcare products reduced costs and enabled higher margins for their investors/owners. 

What did they give up?

CONTROL -  Outsourcing gave up control of product manufacturing and cost, which lead to an environment of extreme supply disruption and price volatility when 3rd party manufacturers reacted to the demand/supply imbalance. 

Where are we going?

Resilient Medical is changing the game and building cost-effective resiliency into the medical supply chain so our partners and customers never again have to experience the recent level of disruption and pricing volatility. Our integrated model leverages the efficiencies of global manufacturing capabilities while retaining control of manufacturing output, quality, cost, and price for our customers.