03 June, 2020
RALEIGH, North Carolina, May 28, 2019 - The impact of COVID-19 on the medical devices industry is high, and is expected to have a medium-long term effect as the industry is witnessing a shortage of electronic components and raw materials, according to Beroe Inc, a procurement intelligence firm.
COVID has had a major impact on the supply-demand gap, with a 1,000- 2,000 fold increase for a few PPE products, raw material shortages increasing by over 10 percent, and increased production of more than 100 percent.
Small and medium companies dependent on China and other countries such as the U.S., Germany, Italy, UK, South Korea, and Japan for components or raw materials might experience temporary shortages.
As a result of the factory shutdowns in China during Jan 2020, lockdown in various countries have led to many disruptions across the supply chain for PPE and emergency or critical equipment manufacturers. The U.S. dependency on imports for PPE related products such as masks is very high.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on market intelligence platform Beroe LiVE: live.beroeinc.com
Due to COVID-19, there is a slowdown in demand and production for various medical products because of the focus on emergency and critical medical supplies. Products experiencing high demand are alcohol prep pads, blood infusion sets, face shields, gloves, IV solutions, IV extension sets, protective eyewear, respiratory equipment, and thermometers etc. Products with high demand and shortages are face masks, hand sanitizers, isolation gowns, jacket and lab coats, shoe covers, and surface disinfectant wipes.
There has been a major impact on global logistics due to reduced transportation and availability of workforce. The key issues and challenges in the electronic manufacturing industry faced by both OEMS and EMS players are reduction in inventory or buffer capacity, increased lead times, delay in PO deliveries, supplier allocation issues and reduction in the number of manufacturing lines. Other challenges include parts’ shortages with a 75 percent impact, transportation disruptions/lockdowns for 70 percent, reduced workforce for 55 percent and underutilized facilities for 33 percent.
The research methodology adopted for the report included:
The pandemic has led to a market failure where high demand meets limited supply. It is now a “seller’s market,” in which suppliers and distributors have established new terms and conditions for buyers. Payment terms now include higher financial risks, such as 50 percent upfront payments, with balances due once the merchandise leaves the warehouse. There are also excessive mark-ups, with distributors accused of stockpiling goods to create perceived shortages and selling later at inflated prices. A proliferation of substandard and falsified medical products is also present.
The report also includes:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com
COVID-19: Assess impact on your suppliers and ensure business continuity with Beroe’s WIRE
(World Instant Risk Exposure)