COVID-19 Impact Update #4
Managing Supply Continuity During the Global Pandemic
Dear valued customers,
Our first priority is to assure the supply of essential medical products for our customers. This priority has never been more tested than now, during COVID-19.
Supply of essential products remains challenging in the current market context. Rapidly growing raw material costs, raw material shortages, a volatile Australian dollar and supply capacity issues are forcing us to make daily decisions to support continuity in product supply and to manage the costs associated with the supply of the products you need.
Managing Order Volumes
To maintain continuity of supply across all products, we continue to limit orders and supply to existing customers at pre-COVID-19 forecast demand volumes. We took this position early to discourage panic buying and ensure a fair and equitable distribution of available stocks between our customers. These temporary measures mean that customers with current trading history will only receive products in alignment with their forecasted usage.
For orders that run counter to forecast usage, two processes will be applied:
1. If you have ordered amounts in excess of current forecast (where that forecast is either based on information you have provided or information we created from previous sales history) we will review your request against availability weekly and any excess will be post-dated until the following month.
2. For orders placed for products where you have no purchase history, we will review product availability weekly to determine if goods can be supplied. If there is no availability your order will be post-dated until we have stocks available.
While these measures remain in place, if you receive communications regarding back orders or post-dating of products, for which you have urgent demand, please ensure that you immediately contact your Business Development Manager and they will do all they can to assist.
Temporary Pricing Adjustments
You may also have been made aware of certain products requiring pricing adjustments during this Pandemic Period. We would like to assure you, where possible, we are trying not to pass on escalating costs. However, substantial movements in price due to supplier pricing or major fluctuations in exchange rates may make certain price increases essential. Where price increases are required, we are confident any increases will only be short term with pre-Pandemic pricing expected to return before the end of the calendar year.
Custom Procedure Pack Forecasts
Custom Procedure Pack usage has been greatly affected by the cancellation of certain elective surgeries. With the gradual return of these services our Business Development Managers are working with customers to establish accurate demand forecasts. During the reinstatement of services we encourage you to work closely with us regarding forecasts and your plans for a staged return.
Production capacity issues, material shortages and escalating raw material prices have forced us to make the following temporary or permanent changes:
Skin Lesion, IV and Catheter Packs
Shortages and volatility of pricing for SMS have required us to make temporary changes in the materials used in the production of sterile fields for some of our IV Starter Kits, Skin Lesion and Catheter packs. These changes are essential to supply continuity and we are confident they will be very short term. In each instance, where a change has been applied, sterile fields will be replaced with a new sterile field of equal or better specification. First packs are expected to arrive in Australia by end of June.
SMS wraps used in our hollowware sets will also change. At this stage, we do not have a firm date for when first batches of products with this change will arrive in Australia, however we hope to be able to share this detail with you soon.
SMS issues have also contributed to our decision to accelerate the transition of our Basic Dressing Packs to the new agreed, ANTT approved SmartTab® Dressing Packs.
Clinical and contract acceptance for transitioning to these new packs was secured in early 2019 and this change will be in effect from mid-July.
Stainless Steel Update
The supply of stainless steel products has been seriously affected by the lockdown and manufacturing shutdown in Pakistan. However, we are pleased to be able to advise that all of our suppliers have passed safety audits by their local Chamber of Commerce and have been granted special permission for a proportion of their workforce to return to work. Despite the country still being in lockdown with heavy restrictions in place, we are in the fortunate position where we can produce approximately 80% of our normal requirements. As a result, we do not expect any significant impact on our ability to supply you with these products.
Please be assured we are doing everything in our power to maintain the level of service and support you require from Multigate. Your support combined with our strong supplier relationships and speed will continue to allow us to find solutions to many of the problems that emerge. By identifying emerging threats early, actively investigating and securing opportunities to improve our supply and supplier base, and quickly making changes to our products where necessary, we remain confident in our ability to ensure continuity of supply of much needed products.
We thank you for your patience and understanding during this period of great flux. If you have questions, concerns or you would like to advise us of changing requirements, please feel free to contact me or your Business Development Manager.
Head of Sales
Multigate Medical Products
M) 0418 255 462 E) firstname.lastname@example.org