Since the start of the COVID-19 pandemic, one of the biggest challenges facing governments and health authorities has been to get medical equipment to the doctors and nurses on the front lines of this global health emergency.
As early as February, the World Health Organisation was warning of a global shortage that threatened to push prices up twentyfold. Those warning would later become reality in the US, where prices for N95 masks and isolation gowns increased by similar margins, and there were bidding wars between individual states over badly-needed ventilators.
Re-imagining the global supply chain to ensure essential medical services and greater resilience in the face of future pandemics will be a major undertaking that will likely take years. But one thing is clear: knowledge is power, and to shift the balance of power The Asian Development Bank (ADB) has acted to improve the transparency of the market with a new map of supply chains for critical products.
The goal is to clear the way for the identification and removal of obstacles to the production and distribution of portable ventilators, N95 respirators, face shields, goggles, aprons, surgical masks, and gowns.
Complex supply chains
Global supply chains have become ever more complex over the past decade, particularly for high-volume, low-margin goods like personal protective equipment (PPE).
PPE was a global market worth US$47.5 billion before the pandemic. For many goods, manufacturers put an emphasis reducing costs by keeping minimal inventory. That makes sense when hospitals are operating normally, but it’s a problem when demand grows dramatically and suddenly.
The World Health Organisation estimates 89 million medical masks, 76 million gloves and 1.6 million goggles are required for the COVID-19 response each month. Existing stockpiles have been depleted, and prices have surged, and in some cases there have been production backlogs of 4–6 months in fulfilling orders.
A recent ADB policy brief suggested that once the crisis is over, many countries might consider maintaining PPE stocks and increasing surge capacity to be able to ramp up production in an emergency. But for the moment, cooperation is the best option.
“Efficient resource allocation at a global scale will help support the national health security of individual countries while minimizing strains on limited domestic resources,” it said.
Since the beginning of April, the ADB has completed 1,000 transactions worth US$700 million in pharmaceuticals, protective equipment and tests. But through its work the bank recognised that nobody had assembled a complete list of suppliers, so it started working with other banks and the health sector to create one.
While the data is drawn from a variety of existing sources, this is the first time it has been assembled into an accessible, user-friendly format.
“To fix any supply chain problems, we need an in-depth description of what goes into these products and which companies are involved,” said ADB’s Head of Trade and Supply Chain Finance Steven Beck.
A way to fix bottlenecks
The interactive maps are available to anyone, and will enable banks, investors, governments, and healthcare professionals to pinpoint key companies in the supply chain for essential medical goods. Companies that make PPE are included, and so are their suppliers, the ADB said.
“Mapping these supply chains means that if help is needed, banks, investors, and governments can use the data to quickly relieve bottlenecks and ramp up supplies,” Beck said.
The supply chain for PPE is further complicated by trade barriers. And over the course of the pandemic, more than 80 countries as well as the EU have put in place temporary trade measures aimed at ensuring an adequate supply of PPE.
Many of those measures have come in the form of additional restrictions aimed at keeping existing PPE resources at home. And there is some concern that new tariff barriers will push up the cost of responding to the pandemic.
The next phase of the project will identify more essential goods and may identify real time blockages at ports, tariff requirements, and other impediments that could hamper the prompt delivery of these essential goods.
