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What Rising Inflation Means for the Healthcare Supply Chain

Every step in the healthcare value chain is confronting inflationary pressure. As the World economy recovers from COVID-19, the remaining problems of rising consumer demand, elevated prices, and global supply constraints are driving inflation. Currently experiencing rates not seen since 1982: US inflation rates accelerated to 7.5% (January 2022), well above market forecasts of 7.3%.


Key Reasons Behind the Current Rise in Inflation

Increased consumer demand coupled with pandemic-related supply chain disruptions are among the main factors driving the current period of higher-than-normal inflation.

1. Lockdowns & labor shortages

Businesses, cities, and even entire countries shut down at the pandemic outbreak. As COVID-19 lockdowns and variant surges persisted, many manufacturers were left scrambling to find workers to maintain consistent production levels.

2. Global logistic backlogs

In 2021 there were a record number of container ships at anchor or drifting off Los Angeles and Long Beach ports. With unprecedented ocean volumes from Asia and domestic land transportation stretched thin, black logs drove many supply chains to a halt.

3. Raw materials and product shortages

Economies worldwide have been plagued by shortages of raw materials and finished goods.

The healthcare supply chain specifically saw a massive global spike for PPE beginning in 2020, leaving many providers scrambling to access vital supplies needed to protect their employees and care for patients.

Outlook on shipping industry inflation

The bottlenecks experienced throughout 2021 show little sign of lessening. As a result, ship capacity will remain tight through most of 2022, with COVID era inflation continuing to impact shipping rates.

The future of inflation on healthcare services

While unprecedented inflation has begun to influence healthcare manufacturing, it is only a matter of time before prices for healthcare services catch up with the increase. With rates and prices often set two to three years in advance, there will likely be a delay before consumers experience the same pressures.

What is MW doing in response?

  • We're developing collaborative forecasts and safety stock programs

  • Using automation and IT investments to obtain real-time information to improve transparency and proactive decision-making

  • Fostering partnerships through volume to SKU discounts

  • We are committed to getting inventory to the vital health systems throughout the US when they need it.


If you need Personal protective equipment (PPE) for your lab please visit: MW Medical virtual shop

Source: Dukal

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