Supply chain management can be challenging at the best of times, but between the COVID-19 pandemic, Suez Canal obstruction incident, and ongoing Russo-Ukrainian war, the fallout from the past few years of geopolitical turmoil has provided a harsh reminder of just how interdependent and precarious today’s global supply chain really is.

We’ve experienced first-hand the devastating effects from these worldwide disruptions to supply continuity; from the all too often months-long lead times for off-the-shelf components, to the intermittent availability of specific grades of raw materials.

Naturally, it only takes one absent component to derail a project or halt a production line, then compounding issues further the seller’s market leads to inflated prices once scarce stock finally becomes available, eating away at profit margins – there’s seemingly never been a more challenging time to deliver goods to consumers in a cost-effective manner!

So, what strategies can be employed both during product & medical device development and production manufacture to help de-risk devices from supply chain uncertainties?

Product Development Strategies:

Project Planning

Even at the best of times, being too aggressive with timelines can be an easy pitfall to fall into, but now more than ever it’s best to err on the side of caution and build more slack into your projects to account for global uncertainties and help manage stakeholders’ expectations from the outset.

Plan ahead by identifying foreseeable risks in your risk register and take proactive measures by developing robust contingency plans to help mitigate or minimize the impact of disruptions to your projects.

Invest in a Feasibility Studies Stage

Investing in Feasibility Studies at the end of the Concept phase can pay dividends later in a project. The scope of your Feasibility Studies can be tailored to encompass numerous aspects, including technical, operational, social, ethical, environmental, and – perhaps most relevant here – commercial.

Here, time can be devoted at the earliest opportunity to scrutinise the design and pinpoint where the biggest sourcing and supply risks may lie, so that identified higher-risk aspects can be more closely monitored during the subsequent Design & Development phase.

Identify and Engage with Suppliers Early

As always, communication is key. The earlier in your design process you can select and start a dialogue with suppliers, the quicker you can leverage their expertise to help identify where issues are likely to arise. This reduces the chances of being blindsided by unwelcomed news later in development, where redesigns become more time consuming and costly to implement.

As part of the usual preliminary checks when selecting materials and components – compliance, cost, lead time, lifecycle status, etc. – make a point to engage in conversation about the robustness of supply continuity too.

Design with Supply in Mind

Keeping in mind the supply chain, likelihood of shortages, and possibility of obsolescence while designing devices has never been more pertinent. Putting in a little extra effort upfront will help to reduce risk and procurement headaches in production, so consider the following as design best practice:

Production Manufacture Strategies:

Identify and Monitor High-Risk Items

Work together with your suppliers, procurement, and engineering teams to identify your biggest risk items, prioritising your highest selling products, then use this list to guide the focus of your efforts in monitoring internal stock levels and consistency of availability from both current and potential suppliers.

Bought-in items built of multiple components of dissimilar materials should be focused on, as the risk scales with the number of supply tiers, materials, and processes involved; PCBs have been notoriously problematic in part for this reason, commonly being made of 10s of unique components.

Increase Safety Stocks

Many companies today leverage a just-in-time inventory management system and other lean manufacturing techniques which often rely on reducing held inventory to reduce storage space requirements as part of their business plan. However, this does lend itself to a world where parts availability and order schedules can be so unpredictable.

In these times of uncertainty, it may be best to take a more conservative approach and at minimum increase safety stock levels of your identified high-risk items, allowing production to continue for longer and giving procurement teams more breathing room to secure materials.

Diversify your Suppliers

One of the most effective and time-tested strategies to help mitigate supply chain issues is to diversify your suppliers. Relying on a single supplier for critical components is a huge risk, as any disruption in their supply chain will cascade down to being your production problem.

It’s essential to build good relationships with multiple suppliers to help reinforce your supply chain and give you more flexibility in terms of pricing and delivery times.

Also consider not only diversification across companies, but also countries; note how Apple have now spread their production between India and China following China’s stricter COVID-19 related policies.

A diverse set of suppliers still has the potential to create a new pain point if they’re all consolidated in one country, should that country decide to close its factories, boarders, or otherwise happens to experience internal disruptions, such as Canada’s 2022 Trucker Protests.

Consider Local Sourcing

The “buy local” consumer mindset has now spilled over into the world of business. Reduce transit risks (container shipping costs roughly quadrupled between 2020-2021!) and language & time difference barriers to streamline your business and reduce response times.

While the low-cost components from far off lands are very alluring, the risks may outweigh rewards; might it not be preferable selling reliably with a lesser – but actualised – profit, as opposed to selling at a larger “on-paper” profit, forever trapped in the realm of theory?

Looking ahead, it appears to be no sure thing that we’re about to revert back to a pre-pandemic world of relative stability in the near future, with foreseeable risks from “The World’s Factory” China with its aging demographic and continued tensions with Taiwan, economists and financial experts predicting an (albeit small) recession in 2023, and the increased occurrence of industrial action strikes relating to the cost-of-living crisis, to name but a few.

Though the world may remain in a continued state of flux, there are strategies we can employ to help minimise the risks from supply chain disruptions, ensuring your product gets to market on time and remains there uninterrupted.

Medical Device Design Development Engineer, Daniel Kirkham Dan Kirkham 24 August 2023

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Get in Touch with Dan Kirkham

Dan graduated from Staffordshire University with a first-class bachelor’s degree in Mechanical Engineering and has since gained 10 years’ experience in product design, manufacturing, and project management. Prior to HD, he worked developing laboratory equipment from concept to production integration, including agitation, spectrophotometer, and PCR machines. Dan holds a PRINCE2 project management qualification, and within HD is keen to contribute his experience and further develop his technical engineering skills.

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