17Jan

Preparing for the unknown; navigating supply chain shortages

2iC-Care | 17 Jan, 2023 |

2022 was a tumultuous year, as the world tried to recover from the global pandemic we were confronted by an outbreak of conflict in Ukraine, rising tensions between China and the United States and a late resurgence in coronavirus cases.

This all impacted the supply chain and has created shortages which had already been on the horizon due to the increased demand created by a high volume of fast-paced technological innovations in recent years. According to Alkesh Sharma from Business online[1], chip manufacturers such as Intel, Qualcomm and GlobalFoundries are seeing large gains from the ongoing chip shortage due to unrelenting demand. [2]

These shortages created delivery delays for the social care sector which exacerbated the difficulties the sector already faced in 2022. Care providers were unable to supply peripherals and hubs to their vulnerable residents because they were locked into agreements with closed protocol suppliers with limited peripheral options to choose from. Service User health and safety faced increasing risks due to delays in the equipment that helps them to be remotely monitored. These supply chain shortages are mainly down to one main component, the chip or otherwise called the semiconductor.

Many vital health technologies depend on semiconductors, Clarissa Kendall-Windless of Pinsent Masons[3] explains, “examples include ventilators and defibrillators; imaging machines; glucose, ECG, EEG, and blood-pressure monitors; and implantable pacemakers. There is a potential risk to millions of patients who depend on equipment and devices which use these microchips should scarcity of supply impact the ability of health care providers to repair existing equipment or access additional equipment to serve a health need, as might be the case if more ventilators are needed in response to a Covid-19 outbreak.”

Kendall-Windless continues to state that the semiconductor shortage has highlighted the vulnerability of the global supply chain. It affects multiple sectors and industries – and the health and medical sector should not be forgotten. It goes beyond a business issue – people rely upon these devices to keep them well day-in-day-out, if a global solution to the shortage cannot be managed or resolved, there will be grave consequences across this sector.

Unfortunately, experts predict that economic markets and inflation, geopolitical and trade risks, and the changing global health landscape will continue to impact supply chains in 2023.  The care sector should be ready for unexpected twists and turns that will require continued agility, resilience, and adaptability in the care sector.

It is not all bad news, initial predictions show the supply chain of critical components is slowly moving toward equilibrium, but the British Government will need to carefully navigate conversations with business leaders to ensure supply chain security.

As an additional government response to the crisis, the Department for Digital, Culture, Media and Sport (DCMS) is looking to commission a £900,000 study[4] to understand the technical and economic feasibility and requirements of a UK Semiconductor Infrastructure Initiative. In the tender notice for commissioning the report, the DCMS said it aims to catalyse the growth of the UK semiconductor sector and contribute to supply chain resilience. The Association of British HealthTech Industries (ABHI) has surveyed its members on the issue as a means of feeding into that study. The ABHI previously wrote to the government flagging the increasing issues in the global supply of microchips, and the potential implications for the supply of medical technologies.

Even with this hum of optimism, care sector leaders cannot afford to bet on supply chain equilibrium or a rise in domestic production. Therefore, adding resilience to supply chain problems should be an important consideration when designing their digital strategy. The key to supply chain resilience is taking every step possible to prevent over reliance on a small number of peripheral suppliers. By embracing open technology, like 2iC-Care, care sector leaders can connect to any peripheral type from any supplier which gives them the ability to pivot when supply of specific peripherals cannot meet their needs.

To learn more about how you can embrace an open technology infrastructure to add resilience to your care service, reach out to the 2iC-Care team today.

 

 

 

 

 

 

 

[1] https://www.thenationalnews.com/business/technology/2022/11/30/semiconductor-sales-to-drop-36-in-2023-on-poor-consumer-demand-gartner-says/#:~:text=Semiconductor%20sales%20to%20hit%20%24676,in%202022%20on%20strong%20demand

[2] https://www.nasdaq.com/articles/globalfoundries-lists-on-nasdaq-becoming-largest-u.s.-ipo-by-proceeds-raised-in-2021

[3] https://www.pinsentmasons.com/out-law/news/global-semiconductor-shortage-risk-patient-health

[4] https://www.gov.uk/government/news/government-explores-national-initiatives-to-boost-the-british-semiconductor-industry

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