As trusted suppliers to businesses for the last 15 years, we have benefited from the wondrous world of global supply chains, seamlessly linking suppliers with end consumers with 24, 48 hour shipping times! As a result, this just-in-time manufacturing model has helped many business companies, including ours, control profit margins, drive down costs to be able to compete in the marketplace. With limited spare stock sitting on warehouse shelves, distributors have been able to meet the demands of our customers with fairly low risk investments on stock.
Along comes COVID 19 and PPE stocks are wiped out overnight
Overnight, the demand for personal protection demand wiped out all the UK stock held in various warehouse locations for distributors and manufactures alike. With a 8-12 week timeframe for replenishing the main personal protection products (PPE) the likelihood of being able to secure products for our existing customers was going to be a tough task. Add to the mix the containers already in shipment the stocks were sold while on route or in some cases being diverted to other global locations. Eliminating the possibility of new stock replacement.
Government intervention redirects existing PPE stock
Very quickly and rightly, the UK Government entered the market and all incoming stocks stopped and were redirected to the NHS front line. There were no PPE stocks left offshore for general business use and what was at sea went straight to the medical services frontline staff. This left the majority of SME and corporate procurement teams, who had traditionally bought just-in-time supplies, facing an uphill task to secure personal procurement equipment to protect their work force.
The result, the supply chain costs for freight skyrocketed and the market was inundated, and continues to be, with fake ppe products.
Global powerhouse demand for PPE products forces up prices
Mix in the US buying power and global demand for a select number of PPE products, we are witnessing a global scramble for PPE manufacturing production slots that has been unprecedented. With wall-to-wall TV coverage about the global PPE shortage and the Government’s across the Globe keen to demonstrate their ability to resolve the issue, some production slots in the main manufacturing hubs have now been bought 6 months in advance, some are even longer.
In addition, with limited UK PPE manufacturing establishments set up, this leaves UK businesses and local authorities facing an uphill struggle to secure quality controlled PPE products,
What do SMEs and Corporate procurement team’s need to do
Current Government policy states:
Current procurement process needs to shift from the just in time mindset to 6 weeks ahead on key items and upto 2 months on products such as disposable gloves.
Prepare now to get back to work.