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OM in the News: Supply Chains Struggle to Maintain PPE Inventory

September 24, 2020

Supply chains are struggling to build personal protective equipment inventory, with 77% of respondents to a new survey saying they have no supply remaining for one of more types of PPE, according to Supply Chain Dive (Sept. 22, 2020). While large hospital systems are beginning to benefit from a recovering PPE supply chain, smaller, non-hospital facilities are still facing acute shortages. The three most requested items in August were N95 respirators, disinfecting wipes and surgical masks.

PPE manufacturers acknowledge the ongoing issue of availability and stock. “3M is making and distributing more respirators than ever before, though demand continues to far outpace what the entire industry can supply,” said 3M’s CEO. It is especially difficult to obtain PPE in rural parts of the country because of the geographic location, the cost of ordering PPE in small amounts and the inability of smaller organizations to meet minimum order quantity. Some organizations have turned to cleaning and sanitizing used PPE to help extend the life of its existing inventory. And they’re relying more on homemade alternatives.

Healthcare providers are also making changes to procurement practices to try to get the PPE they need. Some are moving to multi-source contracts instead of single-source contracts.  Others have turned to group purchasing, as we see in Chapter 11’s case study: Arnold Palmer Hospital’s Supply Chain on p. 468.

“The supply chain remains fragile and overtaxed by the worldwide demand for PPE,” says one hospital procurement manager. “The supply of N-95s continue to remain a concern, and while the supply of gloves and gowns has improved, given how often practitioners use a new pair or gown for each patient, their supply is always a concern.” As states mandate PPE stockpiling, N95 manufacturers are forced to chase ever-increasing demand which will further strain this scarce commodity.

Classroom discussion questions:

  1. Identify the OM issues involved in the PPE shortage.
  2.  In addition to Group Purchasing Associations some industries (such as electric utilities) loan spare parts and expensive equipment to others when there is an emergency.  How might this work in the hospital industry?

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