FEATURE COVID-19 UPDATE
THE IMPACT OF COVID-19 ON SUPPLY CHAINS AND THE MANUFACTURE OF GOODS
my current position, is to use UK-based suppliers but with global operations and manufacturers on offshore sites. This creates a system of multi-sourcing through one supplier but with strong offshore interests to mitigate against the risk of relying on one site. This is also where the benefits of
by Andrew Walker, chief technical officer, Kind Consumer Ltd S
ince its creation, the global supply chain has been put under pressure
and Covid-19 is no different. It threatens the complete standstill of manufacturing as businesses struggle to operate under new measures. For example, in China industrial production has fallen by 13.5 per cent in January and February, compared to the previous year. In this article, Andrew Walker, chief
technical officer of Kind Consumer, explores how the pharmaceutical sector has been able to benefit from long supply chains with extensive regulations.
NAVIGATING DELAYS AND HURDLES Most supply chains suffer from various bottlenecks even in normal times, however the advent of Covid-19 has changed the landscape immeasurably. Although pharmaceuticals are prioritised above other goods, they too are facing hurdles. However, the key is effective planning, something that pharmaceutical companies are well practiced in. In overcoming the havoc created by Covid-19, businesses must have contingency plans. In most cases, especially in the case of
pharmaceutical companies, supply chains are so robust that they can survive the level of disruption that we are seeing today. This could be as simple as keeping emergency stock on hand or dual sourcing to overcome manufacturing slowdown. These quick responses are
20 JUNE 2020 | IRISH MANUFACTURING
essential to the pharmaceutical industry and this flexibility is something I have seen repeatedly throughout my career. For example, picking the right suppliers paired with a solid communication process allowed my team to increase production of a product quickly in response to the swine flu outbreak. Due to the long and heavily regulated supply chains that come with the development of a pharmaceutical product, it is common practice to stockpile resources in case of a Covid-19 situation.
OFFSHORE VS. ONSHORE SUPPLY CHAINS Physical distance can increase the complications created by bottlenecks, especially when relying on a single region. Pharmaceutical companies have been steadily moving the manufacturing and development of their products to countries like China and India to cut costs, resulting in these countries being the largest global producers of active pharmaceutical ingredients (APIs). Covid-19 has therefore exposed weaknesses in this model as some business operations have struggled to deal with a global shock. Covid-19 is undoubtedly going to leave
its mark and perhaps a key takeaway for businesses should be to spread production across different markets to limit the disruption. Another option, which I have witnessed to be efficient in
/ IRISHMANUFACTURING
Below: Andrew Walker, chief technology officer, Kind Consumer Ltd
having a product that is ‘made in Britain’ really show. For example, strong local supply chains and connections has helped to simplify the manufacturing process of complex respiratory devices which are some of the most difficult to develop. Whilst still being hit with staff shortages and social distancing measures, these problems do not coincide with cross-border issues and delays as the physical distance between production stages are miniscule in comparison to having part of the process carried out in China or India.
IDENTIFYING WEAK POINTS AND GETTING A PRODUCT TO MARKET Pinpointing weak points by regularly reviewing operations, contracts and regulations before a crisis hits is essential. This will determine where to double up on supplies or where to open a new factory to mitigate against the impact of a crisis in the future. Covid-19 could result in an increase of highly automated processes which can run with fewer people, as businesses monitor social-distancing policies. In my experience, whilst automated processes are difficult to get going and require a lot more investment, they are more efficient when running at high volume. However, this is exclusive to products with long life cycles, such as pharmaceutical products which last for generations with very little change.
Kind Consumer Ltd
www.kindconsumer.com
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