Christopher Tang, professor at UCLA's Anderson School of Management, describes what it will take for hospital and healthcare supply chains to recover from the COVID-19 pandemic.
COVID-19 was a “wakeup call” for supply chains, Tang says. A nation that ostensibly has an abundance of materials discovered that it could be subject to serious shortages of critical supplies needed to fight a pandemic, such as personal protective equipment and ventilators. “We need to rethink how we can do better,” he says.
In the short term, industries outside the medical field can be recruited to manufacture emergency equipment. But the long-term solution is to find new and secure sources from established producers.
China has served as supplier of many critical materials, but given its involvement in a trade war with the U.S., the latter needs to think seriously about alternative sources. Production must either be sited domestically, or obtained through trade agreements with neighbors such as Canada and Mexico. The goal, says Tang, should be “rebuilding the manufacturing sector within North America.”
The U.S. is also overly reliant on China for pharmaceuticals, especially the ingredients that go into commonly prescribed drugs. The public and private sectors need to work together to formulate a plan that would bring home production of at least some of those raw materials.
Changes in regulation are needed, Tang says, adding that the situation presents “a golden opportunity” for the government and pharmaceutical companies to work with universities to secure research and development required to foster domestic production. The initiative needs to go beyond medical supplies, he says, to include vital raw materials such as the rare earth minerals that are necessary to a wide range of high-tech products, yet are currently sourced almost entirely from China.
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