By Kevin Walsh, Vice President, HealthTech at Celestica
As the healthcare industry continues to focus on slowing the global spread of the coronavirus, it is also assessing how the delivery of care will change over the long-term. Existing practices and norms are changing – some for the short term – but others will have far-reaching implications. The World Health Organization (WHO) warns that a second wave of infections in the late summer or early fall is likely. So while healthcare manufacturers, their supply chain partners, and regulatory agencies continue to collaborate to build and deliver the supplies healthcare facilities need, they must also focus on realigning disrupted global supply chains. They are re-examining their manufacturing and sourcing strategies for critical equipment, evaluating potential M&A deals, and collaborating with partners to improve their resilience to future crises.
The Power of Collaboration
It’s impossible to overstate how remarkable the healthcare industry’s response to the pandemic has been. OEMs have formed regional and global alliances with strategic manufacturing and supply chain partners, including some outside the healthcare industry, such as automakers. Some even made their product designs and other IP public. For example, in late March, Medtronic shared the design specifications of its Puritan Bennett™ 560 (PB560) ventilator with other manufacturers to increase global production.
The spirit of co-operation extends beyond the manufacturing sector. Researchers and scientists at companies like Roche and Johnson & Johnson, as well as at universities worldwide, are developing new tests, treatments, and a vaccine. Until a vaccine is developed and made widely available, the healthcare industry’s massive coordinated response will continue.
For example, Next Generation Manufacturing Canada (NGen), the organization behind Canada’s Advanced Manufacturing Supercluster, has allocated more than $21 million (CAN) to support ramping up the production of medical equipment and supplies devices for healthcare facilities throughout the country.
StarFish Medical Inc., a Canadian medical device company, is part of this effort. StarFish turned to Celestica’s Newmarket, Canada facility to build 7,500 of its ventilators that have proven useful in challenging COVID-19 triage scenarios.
Celestica is working with a number of our customers to meet the global demand for medical equipment and supplies. Other ongoing projects include producing subassemblies for Medtronic’s Puritan Bennett™ 980 (PB980) ventilators, and printed circuit board assembly (PCBA) modules for AirBoss Defense Group’s (ADG) FlexAir™ Powered Air Purifying Respirators (FlexAir PAPR) systems.
Lessons for the Future
The healthcare industry has become more focused than ever on mitigating future risk. The lessons learned while helping the global community navigate the pandemic are shaping their short and long term strategies.
After the pandemic struck, manufacturers acted quickly to prioritize the production of equipment and supplies that healthcare facilities worldwide needed to treat the rising numbers of COVID-19 patients. In the U.K. alone, the Department for Health and Social Care (DHSC) in March delivered ventilator blueprints to more than 60 manufacturers (including some outside the healthcare industry) with a mandate to immediately begin producing 20,000 ventilators for the National Health Service (NHS).
No matter the specific manufacturer, many models of ventilators designed for use in intensive care units (ICU) share common parts such as pressure generators, circuit boards, sensors, filters, and valves. Manufacturers prioritized the acquisition of these parts, creating a domino effect along entire supply chains. Delivery schedules of raw materials were shifted, which led to parts shortages and longer lead times.
The long-term lesson for all manufacturers is to be proactive in identifying alternative sources of parts and raw materials before the next inevitable demand surge hits.
There were too many stories of shipping delays for critical-care medical devices and personal protective equipment (PPE) from one region of the world to another. Consequently, governments increasingly see building inventory stockpiles within their borders as a national security priority.
Healthcare manufacturers should, therefore, evaluate how they may be able to implement on-shoring or near-shoring manufacturing strategies. Embracing the “in region, for region” model or moving manufacturing operations to best-cost geographies may reduce costs and speed delivery to market without sacrificing product quality. Additionally, OEMs that have adopted the just-in-time manufacturing should reassess whether they need to de-emphasize that approach in favor of stockpiling parts for critical medical equipment.
Never Sacrifice Quality for Speed
As the global demand for medical equipment and supplies stabilizes, priority must be given to further testing and refining these products. This is critical to instilling confidence in both providers and patients that the products will deliver the highest levels of quality, precision, and performance. Therefore, aligning with partners that have expertise in navigating these processes and utilizing FDA-registered and ISO 13485 certified manufacturing sites will help speed the production and delivery of critical equipment and supplies.
We also expect a re-reshaping of the M&A landscape. While some manufacturing companies have been overwhelmed with orders, others that build products for non-COVID-19 related procedures such as elective and trauma surgeries had to slow or halt production. As companies evaluate potential deals, diversifying their product portfolios will be a crucial consideration.
Remote Monitoring & Telemedicine
Years from now, we will look back on the 2020 pandemic as a driver of the development of technologies that enable patients and providers to focus on prevention. Early detection and accurate diagnosis of an illness or abnormality are critical to any improving treatment outcomes. That’s why many of our customers are focusing on innovation in the field of telemedicine, developing the technologies that will enable doctors to be more proactive in monitoring and diagnosing their patients’ conditions remotely.
The world has not faced a crisis as far-reaching as this coronavirus pandemic in more than a century. The healthcare industry’s coordinated response has played a critical role in reducing infection rates and re-opening the world after months of isolation and lockdowns. OEMs and their manufacturing and supply chain partners are applying the lessons learned to ensure that healthcare facilities remain well-equipped, re-evaluate their long-term business strategies and processes, and realize technology’s promise of creating a healthier, safer world.