Merle Silver – COO, Critica PPE
n the 5th of our Business Insights Series, Merle Silver, COO of Critica PPE follows on the understandings gained in the last article. From a full and robust definition of the problem and the sources, we can now move on to beginning to define a permanent solution to our PPE supply crisis.
By now, it is apparent to Personal Protective Equipment (PPE) suppliers and consumers alike that it is crucial we acknowledge our domestic PPE supply chain is broken [READ] and needs to be fixed. America desperately needs to develop a more robust and reliable domestic supply chain [READ] for PPE and related supplies to permanently assure its self-sufficiency for such critical supplies so as to achieve ‘strategic autonomy’.
To accomplish this, we at Critica PPE believe the entire PPE supply ecosystem must change [READ] from top to bottom. The supply ecosystem must innovate to evolve and improve how it does business.
A crucial part of that innovation needs to come from domestic US manufacturers. Battered by globalization for years, manufacturers are increasingly recognizing PPE represents a tremendous business opportunity that will not end when the scourge of the Covid-19 pandemic era draws to a close.
Post pandemic, demand for PPE will no doubt fluctuate and abate somewhat, but the need will be ongoing. As such, it makes sense for PPE manufacturers to position themselves for the long run. Their challenge and opportunity will be how to maintain the production of these critical products on a sustainable and profitable basis.
Demand for PPE currently far exceeds supply. As such, it is tempting to sit back, take orders and let products sell themselves. While this approach may work today, it is not a sustainable business model. What about tomorrow when pandemic induced, panic demand subsides?
To succeed in the post-pandemic era, PPE manufacturers need to establish and nurture long-term buyer relationships now. Manufacturers need to avoid the “transactional sales” mindset that currently prevails. Instead, they need to develop enduring customer relationships as the basis for a permanent solution to our domestic PPE crisis.
It is clear that fair prices build relationships while exploiting a crisis does not. Just as clearly, transactional sales approaches will fail once supply and demand approach equilibrium. Exploitative manufacturers will find it increasingly difficult to keep their production lines operating at full capacity. As production volumes drop, they will find amortizing capital equipment and maintaining profit margins will become increasingly problematic.
Customers in turn need to better appreciate the value of supply chain reliability. They are learning that lesson now and beginning to prioritize product quality and availability over price. After all, low prices don’t matter if critically needed products are unavailable, regardless of price.
Just as manufacturers need to establish relationships with customers, customers need stable and reliable relationships with their suppliers. Customers need to look beyond price and take a long-term view to ensure they can meet the critical safety needs of their employees and constituents.
This requires a new and close collaborative relationship between customers and suppliers — one that is built on an entirely new and innovative domestic PPE supply chain.
Without the need to ship trans-globally, time and shipping costs are saved. In the absence of customs restrictions and the risks of trade wars, supply chain reliability greatly improves. And as US product standards replace uncertain international ones, the quality and safety of PPE supplies are assured. As the domestic PPE supply chain becomes increasingly self-contained, it will become far more secure and reliable.
These developments and innovations do not resolve the PPE crisis entirely, but they are essential elements of a permanent solution. Other factors such as government regulation, agency engagement, access to capital and financing options all play a significant role as well.
Critica PPE works in collaboration with both manufacturers and customers to develop such beneficial and long-term relationships for today as well as for the long-term, post-pandemic future. Critica PPE provides customers with access to high-quality, domestically manufactured products through a secure and reliable domestic supply chain that is designed to meet their unique needs and requirements. At the same time, Critica PPE works with manufacturers to develop long-term, recurring sales contracts. We also provide valuable market research, guidance, pricing information and customer insight, among many other things.
This is the Critica PPE commitment – To be an essential element of a new, innovative, domestic PPE supply chain solution for US markets. Now and in the future.