While drug manufacturers are required to report shortages to the FDA, there currently is no corresponding reporting requirement for medical device manufacturers. However, the FDA is asking device manufacturers to voluntarily report any issues and has established an email address specifically for reporting device shortages.

In an FDA press release on COVID-19 supply chain policies, Commissioner Hahn described mandatory device reporting recently proposed to Congress, including requirements that “firms notify the agency of an anticipated meaningful interruption in the supply of an essential device” and that “all manufacturers of devices determined to be essential . . . periodically provide the FDA with information about the manufacturing capacity of the essential devices they manufacture.”

On the commercial front, while supply chain operations were always deemed fundamental, they weren’t necessarily seen as strategic prior to the COVID outbreak. However, given the paradigm shifts with compressed development timelines, multiple manufacturers suddenly had to grapple with securing similar materials as necessary project components.

To improve their internal processes, medical device companies have been tapping into other market segments known for complex supply chain management proficiencies, such as automotive and high-tech manufacturers, for lessons learned and guidance.

Leveraging consultants with experience in high volume manufacturing can also greatly build on existing internal processes. Invetech’s Kent says the key is to focus on bringing in people who understand how a volume supply chain interacts with an accelerated development process and rapid launch.

At Invetech, we were able to leverage the global supply chain expertise and existing commercial relationships of our parent company, Fortive, to ensure alignment across the supply chain.

Another trend underscoring the need to think differently and more strategically about supply chain operations is the growing prominence of the Chief Supply Chain Officer.

With the myriad of challenges posed by responding to COVID-19, business leaders are recognizing that a robust supply chain can reduce risk, provide cost savings, support innovation and allow companies to quickly respond to demand fluctuations.

Kent explains that the supply chain should be considered an integral part of a broad product development ecosystem, working in concert with the technical team to ensure that procurement is aligned with the product development timeline.

He says, “Traditionally, we have concentrated on developing technologies, and then integrating those technologies into manufacturable products. When faced with the need to rapidly develop a commercial product, we needed more rigor upfront when it came to manufacturability to meet both the volume requirements, but also, to maintain reliability. For that, we were able to leverage expertise from the Australian automotive sector to consistently provide input to design iterations.”

Typically, there has not been a lot of excess IVD manufacturing capacity to handle a COVID-19-like demand surge. This has created a situation where companies need to figure out how to address fluctuations going forward, fostering new ways of achieving flexible manufacturing options.

Building out manufacturing capacity requires significant investment, presenting tough decisions in balancing a production volume ramp-up versus the potential risks with uncertain long-term demand. Given the costs of scaling all levels of the manufacturing process, strategic investments can allow for buildouts to be sustainable.

One approach is to scale manufacturing as volumes grow, launching with a largely manual line at lower volumes and gradually implementing automation and inventories to support higher volumes.

Another approach being taken to increase agility within manufacturing is improving operational efficiencies however possible. Increasing the number of manufacturing shifts and expanding from a five-day to a seven-day production schedule have provided short-term flexibility to meet demand forecasts.

Other longer-term options include selective investments to add manufacturing lines at existing plants and process automation or robotics for core operations. Manufacturers are also investing in building workforce skills to support those facilities changes – creating employee pools, cross-training, upskilling and establishing access channels to technically-enabled temporary workers.

Since contract manufacturers with the requisite ISO qualifications are in short supply, companies are getting creative with strategic partnerships to help them address product forecast fluctuations. Alliances with suppliers, channel partners and even customers can help in meeting demand swings, providing near-term technical relief.

Just as medical device companies are seeking supply chain guidance from outside the healthcare industry, some have also taken it to the level of leveraging capacity and expertise for actual manufacturing. For example, GE Healthcare began collaborating in March 2020 with Ford Motor Company to scale ventilator production, with Ford providing technical and production expertise to support simplified design builds.

Similarly, in April 3M entered a partnership with the global power leader Cummins Inc. to increase its respirator filter production with a view to double current rates.

With continued demand for SARS-CoV-2 tests, cross-industry collaborations may provide an attractive flexible manufacturing option for diagnostics companies as well.

Another trend influencing post-pandemic business strategies is a “make where you sell” manufacturing approach.

Prior to COVID-19, geopolitical and market forces had already begun impacting where and how companies were addressing their production needs. Given recent experience, this concept has started gaining more consideration.

While sourcing within a certain region is not always possible and may slightly increase costs, added expenses can be offset through more efficient, guaranteed delivery to the market.

Localized production also allows for operational flexibility through the ability to shift manufacturing in response to external company events.

Rising to the SARS-CoV-2 challenge has become the global imperative of our lifetime. It has tested our mettle and resolve on every front. It has also been a testament to what can be achieved when faced with crisis.

Collectively the healthcare industry has risen to deliver COVID-19 medical solutions across prevention, treatment and diagnosis, developing effective products in record time.

Processes put in place to achieve these outcomes are likely to evolve into best practices, especially as COVID-associated demands continue.

Abbott CEO Robert Ford stated during a Q2 2020 earnings call that COVID-19 test volumes won’t dissipate any time soon, expecting use levels to remain high for the foreseeable future. He predicted an overlap of continued testing of symptomatic patients with broader testing of asymptomatic patients as vaccines roll out, followed by continued surveillance to monitor and track vaccine protection.

More robust, strategic supply chains that can respond quickly to all levels of product development and manufacturing will enable diagnostics companies to shift and adapt going forward. Changes supporting compressed development timetables will likely also remain, delivering successful product innovations with speed and agility.

When the next healthcare crisis hits, the industry will be ready.