PPE: what now for the global supply chain?BMJ 2020; 369 doi: https://doi.org/10.1136/bmj.m1910 (Published 15 May 2020) Cite this as: BMJ 2020;369:m1910
- Jane Feinmann, freelance journalist
As 2020 dawned, the idea that a healthcare procurement team should maintain national supplies of personal protective equipment (PPE) at minimal cost to healthcare budgets was entirely uncontroversial.
“It involves opening a bid and giving the work to the lowest bidder, almost invariably a Chinese company because of cost,” says Willy Shih, the Robert & Jane Cizik professor of management practice at Harvard Business School. This race to the bottom in production costs means that companies have minimal incentives to maintain production in high cost locations or to worry about geographical diversity in production.1
The rapid growth of container shipping in the 1990s reduced transport costs dramatically, while China was creating a robust trade infrastructure. As a result, high income countries achieved ever greater efficiency and lower costs in producing consumer goods, through outsourcing. Shih tells The BMJ, “When Nike moved its production to China, the German company Adidas had no choice but to follow suit—and the same pattern has occurred throughout manufacturing.”
PPE was no different, with most of the world’s stock made at low cost in China. Yet this apparently seamless global interdependence unravelled in just a few weeks after the covid-19 pandemic took off in Hubei province, at the centre of Chinese manufacturing.
Panic and piracy
As Chinese doctors and scientists struggled to make sense of the new virus, China became the first country to recognise that unprecedented quantities of PPE would be needed, not least to keep healthcare professionals safe. Western charities donated small quantities of protective gear to China in early spring 2020, but the obvious solution was right on its doorstep. The Chinese government soon made itself the sole customer of the major PPE making factories …