Thursday, February 06, 2020

Hong Kong Govt Scrambles To Acquire PPEs


Even though Hong Kong has detected fewer than 2 dozen coronavirus cases in their city of 7 million people, healthcare workers are burning quickly through their stockpile of PPEs (Personal Protective Equipment) and local officials are scrambling to find replacement stock.
Without proper PPEs (masks, gowns, gloves, and eye protection) healthcare workers face a terrible dilemma; either work unprotected and risk infecting themselves, their co-workers, and potentially their families . . . or refuse to work.
Our 21st century JIT (Just in Time) inventory model relies on open supply chains with manufacturing and deliveries finely tuned to a steady and predictable demand.  During a crisis, when the global demand for certain supplies - like PPEs - surge significantly, the system can quickly seize up.

A month ago, in Hong Kong: Caught With Their Masks Down, we looked at a run on both surgical and N95 masks in the region following news of a viral pneumonia in Wuhan City, some 900 km to the north. When I wrote that, fewer than 60 cases had been identified.
Since then, as the situation in China has worsened, countries around the world have been trying their best to secure whatever quantity of PPEs they can, which has resulted in skyrocketing prices and a global shortage.  
PPE manufacturers in China have been badly hit by the shutdown of major cities, and China is quickly consuming whatever they can produce.  The rest of the world - including Hong Kong - must compete for the remaining scarce global supply which is produced in only a handful of countries (notably Singapore, Malaysia, and Mexico).

Yesterday Hong Kong's Government acknowledged the shortage, and the difficulties in relying on traditional product pipelines, and announced plans to try to procure additional PPEs directly from manufacturers overseas and on the Mainland.
Direct procurement of protective supplies for medical care
February 5, 2020
The Director of the Commerce and Economic Development Bureau Qiu Tenghua said that the frontline medical staff of the Department of Health and the Hospital Authority had a surge in demand for protective materials. The government has proactively contacted mainland and overseas suppliers to directly purchase related materials and will give priority to frontline medical staff.
Qiu Tenghua said at a press conference today that after the Lunar New Year, the global demand for protective materials is very large, resulting in tight supplies and soaring prices, and individual countries have implemented export controls on related materials. After reviewing the supply of protective materials in Hong Kong, the government and the HA considered that it was not feasible to continue to purchase materials through traditional tendering methods. Therefore, they actively contacted mainland and overseas suppliers to purchase directly.
In addition, the government has also discussed with the business community, including importers and retailers, to assist them in arriving at Hong Kong with materials that are ready to be shipped but have encountered problems, and to study suitable sales methods to facilitate the purchase of materials such as masks by the public.
In the long run, the government has approached mainland producers to study how to ensure stable supply, and may require central coordination if necessary.
As for local production, the Government is working with the Productivity Council to collect information on local production lines, and is studying with interested manufacturers whether it is possible to set up factories in Hong Kong to produce a small amount of protected materials.
Today, an acknowledgement from Hong Kong's Logistics office that obtaining sufficient PPEs from other sources may be easier said than done. 
Logistics Department makes every effort to purchase epidemic prevention items
February 6, 2020

The Government Logistics Service Department said that in order to combat the new coronavirus epidemic, the department has been searching for masks and epidemic prevention items through different channels. Even if it encounters difficulties, the department will still try its best to purchase.
The Logistics Department stated that it has taken direct procurement from multiple suppliers through multiple channels in order to lock in the supply as soon as possible. The department has also been referred by various departments, including the Hong Kong Economic and Trade Office and individuals, to suppliers in different countries , Global purchase of masks and anti-epidemic items.
In addition, the Logistics Department has also adopted public tenders to cover more suppliers in an effort to search for the necessary anti-epidemic materials as soon as possible.
The Logistics Department pointed out that the supply of various types of epidemic prevention products, especially shrouds, is very tight. Some regions have implemented export controls, and departments will continue to do their best to purchase the required items through different channels.

In 2015 - following the slow response to the Ebola outbreak in West Africa - a public-private partnership called the Pandemic Supply Chain Network (PSCN) was created following the World Economic Forum annual meeting in Davos, in order to develop better ways to help ensure the delivery of goods during a pandemic.

The current coronavirus epidemic threatens to become the first genuine stress test of our 21st century JIT inventory system. Three days ago, in the WHO Novel Coronavirus Situation Report #14, the WHO operational Support and Logistics (OSL) gave the following update. 
TECHNICAL FOCUS: Operational Support and Logistics WHO Operational Support and Logistics (OSL) is working to support the 2019-nCoV response, both at the global level and directly with Member States. Amongst these activities, WHO OSL has updated the Disease Commodity Package (DCP), which has been published here.
This document provides guidance on commodities required for all aspects of response. WHO OSL has also been working to develop global commodity cost estimates for the 2019-nCoV response, which will aid in global strategic response planning and financing.
Working with technical experts in health operations, WHO OSL has developed a “2019-nCoV kit”, similar to prepared treatment kits used for cholera, Ebola and other high threat pathogens in emergencies. In the coming days, the costing, procurement and assembly of these kits will be a priority.
Credit WHO

Through the Pandemic Supply Chain Network (PSCN), a market survey has been distributed to over 40 organizations to understand the availability, distribution and forecasting of crucial response commodities throughout the world. A report of the findings will be redistributed to all partners.
The Network is exploring operational options within its stakeholders to ensure in particular that critical personal protective equipment is secured and distributed to appropriate locations. Additional stakeholders are encouraged to join the Pandemic Supply Chain Network by contacting WHO OSL.
Guidance is currently under development for managing the logistics associated with case management, focusing on isolation, triage and standard treatment centre configuration. OSL is setting up a global supply chain system and a coordination mechanism between responders and suppliers to ensure access to essential commodities for countries/populations most in need.

There's been considerable work done on supply chain issues over the past 10 years.  Whether 2019-nCoV rises to the level of a pandemic or not, the next few months should tell us where additional work is needed.