by The coronavirus disease 2019 (Covid-19) pandemic has severely impacted global supply chains and disrupted trade across industries. The in-vitro diagnostics (IVD) industry which produces tests, reagents and instruments for disease diagnosis has not remained unaffected. This article explores how Covid-19 has impacted the raw material supply for IVD products and the strategies adopted by industry players to overcome challenges.
Early Supply Chain Disruptions
When the pandemic first began in China in early 2020, major IVD companies faced shortages of critical raw materials and components sourced from the country as factories shut down to control the spread of the virus. Products like antibodies, enzymes and plastic consumables used in test kits saw a drop in production. International shipping was also disrupted leading to delays in delivery of important materials. Companies reliant on Chinese suppliers for specialized chemicals, polymers, reagents etc struggled to maintain inventory levels. The shortages rippled across the globe impacting the ability of manufacturers to ramp up production of Covid-19 test kits.
Adapting Supply Sources
As the pandemic continued to spread globally, IVD firms realized the need to diversify their supply base beyond single sourcing from China or other impacted countries. Many started evaluating alternate suppliers from other geographies to reduce dependence. For example, some US based companies qualified European and domestic sources for polymers, antibodies, buffers and extraction reagents that were originally imported from Asia Pacific. Similarly, firms in India and Brazil scouted for local suppliers of raw materials to strengthen their domestic supply chains. Companies also invested in expanding existing supplier relationships and qualifying new partners to ensure continuity of critical components supply.
Managing Material Shortages
Though diversification efforts helped address initial supply issues, intermittent shortages of certain raw materials persisted through 2021 due to ongoing global demand-supply imbalances, shipping delays and raw material price hikes. To manage such disruptions, companies prioritized materials, increased safety stock levels of critical items and closely tracked inventory. Alternative workarounds were also explored – for example using suitable substitute antibodies or enzymes. Advanced procurement planning and better inventory management helped smooth out intermittent shortages. Regular communication was maintained with global suppliers to stay updated on disruption risks.
Ensuring Quality Amid Challenges
While focusing on supply continuity, companies did not compromise on stringent quality standards expected in the highly regulated IVD industry. Regular audits and inspections of new supplier facilities were conducted virtually during the pandemic. Robust quality systems and processes ensured proper control, testing and release of all materials sourced from alternative suppliers during the crisis. Digitalization of supplier documentation and paperless quality management further aided compliance. The reliance on newer partners to overcome shortages did not come at the cost of delivering high quality products adhering to regulatory specifications.
Strengthening Local Sourcing
The pandemic underscored the need to build robust local sourcing networks, especially in emerging markets. In 2021, some leading global IVD manufacturers set up or expanded captive material manufacturing sites in India and Brazil to enhance security of domestic supply. Local sourcing of commonly used raw materials such as reagents and disposables has also increased through vendor development programs. This is benefiting both multinational corporations and their supplier partners in lowering transportation costs, reducing delivery timelines and ensuring seamless availability of materials. Governments too are supporting capability building of local enterprises in IVD raw material manufacturing.
Ensuring Resilience for the Future
The severe supply disruptions of the past two years have proven that depending excessively on a single or limited source carries inherent risks that can seriously jeopardize operations. Going forward, companies are committed to building even more resilient and agile supply chains that can withstand future pandemics or large scale disruptions through a balanced globally diversified sourcing strategy, strategic inventory reserves and digitally connected supply networks for real-time tracking of materials flow and disruptions. While challenges persist, collaborative efforts of industry and governments will help ensure steady availability of high-quality materials critical for patient care.
