Reshoring Medical Supply Chains Isn’t Going to be Easy

By Matthew McMullan
Jul 24 2020 |
Getty Images

House committee gets an earful on what reshoring medical goods production will look like.

On Thursday afternoon the House Ways & Means Subcommittee on Trade convened to talk about critical medical supply shortages brought along by the COVID-19 pandemic.

As if to underscore the severity of the health crisis, the hearing was held via video conference.

And even though we’re six months past the arrival of the coronavirus in the United States, the availability of personal protective equipment (PPE) for healthcare workers tending to people sick with a contagious respiratory disease remains an ongoing concern.

“The pandemic highlights the impact of globalized supply chains designed to pursue the lowest price whatever the true cost without appropriately accounting for possible risks, such as unanticipated disruptions to sourcing; relying on complicated and multi-tiered supply networks easily disrupted; and losing key manufacturing flexibility in the United States,” said subcommittee chairman Rep. Earl Blumenauer (D-OR) in his opening remarks from what looks like his office. “I think we fail to fully appreciate these vulnerabilities.”

That’s a regrettably fair conclusion to reach. Today the United States passed 4 million confirmed cases of COVID-19, and lots of people still aren’t taking it seriously.

But it seems like we’re slowly coming around to it. More local and state governments across the country are considering facemask mandates (because masks work). After a few months off, President Trump is again holding regular, sober briefings on the federal response to the crisis that definitely won’t suggest you inject yourself with bleach to fight the virus. And just this Wednesday the official in charge of the Federal Emergency Management Agency (FEMA) told a different House committee that the country’s reliance on overseas suppliers for PPE is a “national security issue” and that sufficient supplies of it is an issue too.   

“We’re in a much better place than we were coming out of March and April. However, we are not out of the woods completely with PPE,” FEMA Administrator Pete Gaynor said.  

So, as COVID-19 spreads across the American south and surges in California, did the Ways & Means subcommittee get any ideas on how the federal government can help shore up these supply chains for these medical products that are likely to be in demand for a while?

It’s not gonna be easy, their invited panel of experts said, but they did give the subcommittee a fuller understanding of what the country’s manufacturing capacity for critical medical items really looks like, as well as some suggestions on how to wisely expand upon it.

Kim Glas, president of the National Council of Textile Organizations, said if we really want to scale up production, the federal government should use its purchasing power as a significant buyer of medical products and direct more procurement to domestic industry:

"We released a report with other industry associations earlier this week outlining a pathway forward on domestic procurement policies. This includes procurement policies to expand the Berry Amendment rules for PPE purchases across the federal government; to help instruct federal government agencies to fully exhaust U.S. PPE production capacity; and we’re also urging the government to award multiyear contracts to U.S. industry to help onshore some of these investments."

Roxanne Brown, international vice president at large of the United Steelworkers (USW), called for increased federal spending on industrial research and development, maintaining funding for export promotion and trade enforcement, and took a moment to highlight the union’s involvement in the fight against of the coronavirus:

"USW members at Qure Medical in South Carolina make rubber stoppers for syringes and other components for intravenous drug delivery. The demand for these products doubled as the COVID-19 crisis increased, and our members stepped in to produce these small but vital components.

"At the beginning of the crisis, American Roots in Maine, which traditionally produces clothing items, faced layoffs. The company quickly retooled to produce facemasks and face shields, using a USW-represented paper company in New York as a supplier for the filters. This effort led to American Roots recalling all laid off USW members and the company hiring 75 more employees.

"These are just two examples of how US workers and the US manufacturing industry stepped up in a time of crisis for this country. They represent a small fraction of what an interconnected manufacturing economy can do in the face of crisis."

Dr. Prashant Yadav of the Center for Global Development argued that a truly resilient manufacturing supply chain would increase domestic production capacity but must include some imports to avoid bottleneck risks. He also said:

"If we’re serious about U.S. manufacturing and having a greater manufacturing base for some medical products, we’ll have to think about how to create incentives – not just for finished-product production or one component suppliers, but create some infrastructure that attracts entire clusters."

And Dr. Erica Fuchs, professor of engineering and public policy at Carnegie Mellon University, tried to contextualize the complex challenge that is creating a dynamic manufacturing sector that’s responsive to surges in demand for critical products:

"During the pandemic I spoke with a medium-sized U.S. medical supplier, which had imported equipment from China capable of manufacturing 9 million masks per month. Surprisingly, their most challenging (production) bottleneck was the (elastic) ear loops for these masks.

"To work in their automated machines the elastic needed to be of no latex, a precise width and elasticity, and to come in a bag. They found a domestic supplier for a small fraction of the necessary elastic. But on a spool, and for a while, a worker hand-unspooled the elastic – with the expected productivity slowdown.

"When discussing critical technologies, we wouldn’t think elastic, and yet that lack of elastic cost our country millions of masks a week. The lesson from this story, however, is not that we need to produce elastic, per se. What’s missing is the capability to pivot, diversify the suppliers internationally, adapt equipment, change the elastic, change the mask (design) to not require the elastic, change the regulations – that inability to pivot is the tip of the iceberg for how dilapidated the U.S. manufacturing ecosystem is."

You can watch the entire hearing here.