RISK IN CONTEXT

COVID-19 – Manufacturers Responding to a New Challenge

Posted by Anthony Monaghan April 02, 2020

The new trading environment created by COVID-19 has left many manufacturers with changes to production levels; disruption has significantly affected manufacturers' supply chains, many of which rely on parts originating from China.

For some organisations however, the crisis has prompted a response to Government calls for critical supplies, as health services are overwhelmed and short of mechanical ventilators and other preventative and medical care equipment to fight the pandemic. The response from the manufacturing community has been incredible with some answering the need to build more ventilators, while others move into the production of hand sanitisers, COVID-19 testing kits, transparent face shields, and the like.

As companies ramp up production and retool their plants to make lifesaving medical equipment, what considerations are required from a risk perspective? How different is it to source and produce parts for a ventilator than it is for vehicles, or from making spirits and beer to hand sanitisers [note 1]?

For those existing players, ramping up production will require the retooling of an already complex supply chain, the retraining of staff, and the search for alternative suppliers – particularly if source countries are in lock down. For organisations new to making medical machinery, it will be a challenge to reorient quickly and to navigate the new ways of working, especially as some staff may be working from home.

Risk Considerations

Any change in the operating model of a business from its original purpose will lead to an altered risk landscape, new risks will need to be understood, reviewed, and managed.

Changes to the operating model should result in a review of all operations, equipment, processes, quality assurance, workforce training, and safety controls:

  • Review of all operations, equipment, processes, quality assurance, workforce training, and safety controls due to changes in the operating model.
  • Review how new processes and materials may affect your risk profile and whether any further controls are required.
  • Review exposures to any new regulatory obligations.
  • Undertake robust supply-chain mapping.
  • Review product quality and management procedures. 
  • Determine the ownership and control of design, production, installation, testing, maintenance, repair, and overhaul risks.
  • Ensure statutory inspections are maintained in line with legal requirements (the Government has stated that inspectors are now “Key” workers).
  • Review policy wordings with your broker and advise insurers of any change to processes.
  • Consider if any additional classes of insurance are required, for example, intellectual property, medical malpractice, and product recall.

In addition to the above, manufacturers will still need to ensure their places of work are safe for staff. This means adapting to the latest Government advice on how to handle COVID-19 people risks.

As the new situation offers a chance to diversify products and move to new ways of working, we will increasingly see more collaboration between manufacturers ultimately altering attitudes and supply chains for the future. New ways of working and new collaborations bring opportunity – but also the need to review and manage risk.

[1]   www.hse.gov.uk/news/hand-sanitiser-manufacture-supply-coronavirus.htm

Anthony Monaghan