Two years into the COVID-19 pandemic, and the conflict in Ukraine has compounded the disruption to supply chains, along with the tragic human toll that the world is feeling deeply.
Companies across the globe were thrown into crisis management mode when the pandemic hit, and there is little respite in the global healthcare supply chain.
There is no doubt this period has been among the biggest challenges of her career but Liz Riordan, Divisional Vice President, Global Supply Chain at Abbott Core Dx says that managing this complex situation requires communication and detailed thinking:
"It's been two years of constant issues management around each piece and part. If you think about more than 7,000 parts going into an Alinity, you can't put a piece of equipment out the door without every part being there, it's not a matter of 6998 is okay!
I would say right now we're more in a situation where disruption is a way of life. We're trying to be as process driven as possible, so we focus on the high impact exceptions first to assure critical materials take priority.
For the last year and a half, we had been bumping up against a situation where inventories were extremely challenging to build. I'm happy to say that we are starting to see the light at the end of that tunnel.
Between 92% and 94% of our Core Diagnostics products are at safety stock or above but that means on any given day between 6% and 8% of our reagents need extra work to secure our position. And that rolls through the whole list of items, so the challenge for us has been that it's a different 6-8% every week.
We're working closely with our suppliers every week at a level of detail that was never done before in the industry. The more eyes you can get on something, the more you have an opportunity to catch that one last part."
As companies around the world face these ongoing challenges with their supply chains, the value of talented, well-trained, and experienced personnel to navigate these issues at all levels is abundantly clear.
The disruptive elements caused by the pandemic that were well outside of an organisation's influence were a compounding factor. For example, over 50% of air freight is carried by passenger jets, many of which were grounded in 2020, and passenger jet capacity is still far below normal levels.
With Australia's border being closed to visitors for now over two years, the impact of the freight squeeze was felt severely here, with companies across all sectors competing to ship their products. The conflict in Ukraine has further reduced certain air and sea capacity and pushed costs for fuel and other commodities to new highs. Until tourism and business travel are back to pre-pandemic levels, we will continue to grapple with freight capacity limitations and in turn exorbitant costs.
The challenges we have experienced since 2020 in the ANZ region have in most instances been mitigated by this intensive, collaborative work at a global supply chain level.
Lizbeth Plagnol, Regional Head, Global Economics and Business Insights at Abbott also notes some positive aspects of change she has seen during the pandemic. She says:
"What was very interesting was to see how companies were able to adjust their business models to respond. The speed at which companies, including Abbott, were able to expand manufacturing capacity, or to create new delivery channels, or new packaging mechanisms. It's that innate creativity in the human being, that really rose to the top in a number of organisations."
Open communication, collaboration, adaptability, creativity, and resilience have undoubtedly been key in coming through the pandemic to this point. This approach of our global team reflects Abbott's values of pioneering, achieving and enduring. As we continue to work hard to deliver for our customers, we are also mindful of the Abbott value that 'we care,' and extending our compassion to one another, as well as our partners.