The Life Sciences Supply Chain During the COVID-19 Pandemic | Q&A

Between COVID-19 diagnostics, treatments, and vaccines, the life sciences supply chain has been quite busy during the past year. The surge of pandemic-related activity, along with growth in bioproduction and other segments of the life sciences industry, has brought with it an unprecedented demand for supplies.

Across the industry, manufacturers and suppliers are working to fulfill orders of at least double the volumes seen before COVID-19. Corning Life Sciences, for example, has seen orders for some products grow by 200 percent. Demand for automation tips, microplates, cryogenic vials, and tubes for testing kits are especially high.

This huge demand, when paired with raw material shortages, disruption to freight services, and government directives, has created delays at nearly every point in the supply chain — from raw material suppliers, to manufacturers, to distributors, and, ultimately, to scientists.

Corning Life Sciences has been aggressively expanding its production capacity and processes to minimize the impact of these changes. Even so, the supply chain will likely continue to be stretched thin for a while yet.

Lydia Kenton Walsh, Corning's Vice President of Commercial and Business Operations, explains.

Q: How has the COVID-19 pandemic affected the life sciences supply chain?

Kenton Walsh: One of the most significant ways the supply chain has been affected is by high demand. I've never seen a situation like this in more than 30 years in the life sciences industry. While some labs closed at the start of COVID-19, many others were asked to stay open to develop tests, treatments, and vaccines at record pace. With all this critical work happening, manufacturers such as Corning began to see a surge in our customers' demand for a number of lab products.

Another factor is that Corning, like other manufacturers and distributors, participates in rated orders as part of the U.S. Defense Production Act. This prioritizes critical government-mandated products, which can affect how we and our distributors fulfill orders.

There are also shortages in raw materials across the global life sciences supply chain, for materials such as resin, packaging materials, and other components needed to manufacture finished goods. Together, these factors have pushed demand to new levels on top of normal annual growth. In response, Corning has ramped up our manufacturing and shipping operations—in fact, in the first months of 2021 we’ve shipped more products than ever before in our more than 100-year history.

Q: How are these demand surges affecting how products get to customers?

Kenton Walsh: Typically, customers place their orders with distributors, who place bulk orders with manufacturers such as Corning. Because these distributors have the infrastructure to handle very high global volumes, they can streamline the ordering and distribution process. Under normal circumstances, Corning can ship products in a timely manner to the distributor from our internal distribution centers.

But right now, surges tied to COVID-19 are depleting product inventory and raw materials for many products, leading to backorders on both the manufacturer and the distributor sides. Still, even once the product gets to distributors from the manufacturer, the distributor decides how they'll allocate it which can affect which customers receive product. Manufacturers like Corning do not have visibility into how these orders get prioritized, which makes it difficult to communicate directly to customers when product will reach their labs.

Q: What is Corning doing to help reduce the number of backordered products?

Kenton Walsh: Since the increased demand began, Corning has taken several steps in the short- and long-term to ensure we're addressing the challenges.

For the short-term, we are running our operations 24/7 at all manufacturing plants that have backorders and our internal distribution centers have extended their hourly operations — with the intent to get every possible increase in output. This has been more of a challenge due to COVID-19, but our employees are committed to doing everything they can to support the critical work of researchers.

We're also investing in long-term solutions, with over $500 million being spent between 2020 and 2021 for new global capacity improvements. That amount includes government co-investments in the U.S. and China to support domestic manufacturing of critical supply chain components, products supporting COVID-19 testing, and future pandemic preparedness and response.

In the meantime, we're providing a steady flow of products to our distribution partners, increasing what we're able to manufacture and ship to fulfill current orders, and rebuilding safety stock inventory levels. We're confident these measures will reduce shortages, but we do expect our most in-demand products to be on rolling backorder throughout most of 2021.

Q: If an item is on backorder, what can customers expect?

Kenton Walsh: Regular communication, for one thing. We're regularly updating our promise dates for products that are being manufactured within the next 90 days. For customers who order directly with Corning, our customer service team can provide estimated promise dates on products that are available now or are scheduled to be manufactured within the next 90 days.

Timelines are also being provided regularly to our authorized dealers who communicate directly with customers. When a promise date is available, it'll be reflected in the open orders report that we regularly send to our distributors.

Q: How long do you think it'll be before the supply chain gets back to normal?

Kenton Walsh: While we're working hard today to optimize manufacturing, we are also investing in the future. However, it can take time for our efforts to have a widespread impact — especially when demand is at such an all-time high.

For some products, the supply might start keeping pace with demand within the coming weeks and months. But for others, it might not be until the latter part of 2021 when products start to come out of backorder for normal fulfillment.

We understand this has been a frustrating time for customers, and we sincerely appreciate their patience, collaboration, and understanding. We want our scientific community to know that we are doing everything we can to manufacture and ship products as quickly as we can to support critical life sciences work.

Ultimately, as one community, we are all in this fight against COVID-19, and we will continue to work closely with suppliers, distributors, and our customers to push through these challenging times and get us on a path back to normal.

The Life Sciences Supply Chain During the COVID-19 Pandemic | Q&A | Corning

Q&A: The Life Sciences Supply Chain During the COVID-19 Pandemic