1. Small manufacturer: Nonin Medical, Plymouth, Minn.
Nonin is the inventor of finger pulse oximetry, making devices that measure the amount of oxygen in a patient’s blood. Low blood-oxygen has proven a strong indicator of COVID-19 infection and its severity. The demand for pulse oximeters soared during the first few months of 2020 as the pandemic spread around the globe.
“At the beginning of March, we started getting the noise of increased demand,” said chief operating officer Christine Meidinger. “Unfortunately, we had no idea what that meant.”
The company had to scramble to figure out what it would need and how to react. By April, Nonin had a better handle on what the pandemic would mean for the company, its product and some of its larger customers, who were under federal Defense Production Act orders to increase output.
Like many medtech manufacturers, Nonin learned pretty quickly what it needed to work on, including weaknesses in business processes that would have helped it work faster, better and with greater productivity, according to Meidinger. Internal planning systems should have been automated, which would have helped the company internally, she said. Automating high-level communications with the supply base, such as production forecasts with suppliers would have helped, too.
The company also quickly — and safely — had to add staff when the state was under a stay-at-home order and social distancing was new. Nonin also faced challenges with component supply because it didn’t have the leverage of a local supply base in India or China. Medical Alley helped with that, she said.
Like many other manufacturers and customers during the height of the pandemic, Nonin also had to wait for critical supplies.
“Every one of our components and materials is custom or unique so there isn’t an inventory or a stockpile out in the market that we can leverage,” Meidinger said. “A majority of our supply base is domestic, but you only have to be short one component and you can’t build a unit.”
Meidinger said she learned to ask about the types of agreements foreign suppliers have with their governments, such as their status as a preferential medical supplier that could boost production quickly in an emergency. Nonin executives also realized they needed to think about sourcing more from lower-cost geographies in North and South America and Asia.
A lot of what the company learned stemmed from the need for inventory planning, Meidinger added. Nonin learned to ask suppliers how much inventory they’re willing to hold beyond standard safety stock, and to plan to account for risks due to geography and political issues within supplier agreements and inventory planning.
What it all came down to in the end was the relationships the company had in place going into the pandemic, according to Meidinger.
“We have some suppliers who have worked with the company since its foundation,” she said. “Those guys were willing to do anything. We had suppliers immediately go invest in new capital equipment and in material … without going through a bunch of bureaucratic normal steps. And that was based completely on relationships.”