Key Factors Impacting a Medical Ventilator Supply Chain During the COVID- 19 Pandemic: Lessons for Pandemic Preparedness

Abstract

Objectives:

Future pandemics may cause more severe respiratory illness in younger age groups than COVID-19, requiring many more mechanical ventilators. This publication synthesizes the experiences of diverse contributors to Medtronic’s mechanical ventilator supply chain during the pandemic, serving as a record of what worked and what didn’t, while identifying key factors affecting production ramp-up in this healthcare crisis.

Method:

In-depth, one-on-one interviews (n = 17) were held with key Medtronic personnel and suppliers. Template analysis was used, and interview content was analyzed for signals, initiatives, actions, and outcomes, as well as influencing forces.

Results:

Key findings revealed many factors limiting ventilator production ramp-up. Supply chain strengths and weaknesses were identified. Political factors played a role in allocating ventilators and also supported production. Commercial considerations were not priority, but economic awareness was essential to support suppliers. Workers were motivated and flexible. Component shortages, space, production processes, and logistics were challenges. Legally based pressures were reported e.g., import and export restrictions.

Conclusion:

Crisis response alone is not enough; preparation is essential. Coordinated international strategies are more effective than individual country responses. Supply chain resilience based on visibility and flexibility is key. This research can help public health planners and the medical device industry prepare for future healthcare crises.

Background

In the first wave of the COVID-19 pandemic, 34.6% of hospital admissions progressed to intensive care units (ICU), 18.5% of hospital admissions received mechanical ventilation, and up to 34% of COVID-19 patients in the ICU died, ¹ leading to a surge in demand for ventilators, ² with required estimates running up to a million to satisfy global needs. ^2–4 Medical device manufacturers were unable to satisfy this demand, precipitating a worldwide shortage. ⁵ Governments, health authorities, international organizations such as the World Health Organization (WHO), and USA’s Biomedical Advanced Research Development Authority (BARDA), ⁶ all sought large numbers of ventilators, often competing with each other. Panic buying exposed weaknesses in public health procurement and allocation systems, and led to further distortions in worldwide supply chains. ⁷ Medical device manufacturers were faced with the simultaneous challenges of urgent need for their products and pandemic-related constraints on production.

While worldwide demand for ventilators subsided as evidence on clinical management of COVID-19 cases emerged, future pandemics may have different characteristics with the potential to affect the population much more severely, making it imperative that we learn from the supply and demand experiences of this pandemic. For example, the 1918 influenza pandemic is estimated to have led to 50 million deaths and had a significantly higher young-adult mortality. ⁸

This case study documents and synthesizes the experiences of diverse contributors to Medtronic’s mechanical ventilator supply chain during the pandemic into a PESTLE framework, a pragmatic and familiar format enhancing preparedness by identifying key factors affecting production ramp-up in a healthcare crisis.

Case Study: Medtronic

Medtronic’s plant in Mervue, Galway, Ireland produced a range of ventilators from portable models like the Puritan Bennett™ 560 to the Puritan Bennett™ 980, a critical care model, assembling and testing over 1500 components sourced from 100 companies in 14 countries. In pre-pandemic circumstances, around 200 high-end ventilators were produced weekly, and satisfying the huge pandemic demand was impossible. This necessitated the mobilization of organizational resources to manage the production and allocation of available ventilators. The team was tasked with increasing ventilator production 5-fold in an initiative known as the “Drive for 5,” posing challenges and requiring reorganization, additional workforce, and new and repurposed spaces, as well as replication of assembly/ testing facilities, process innovation/ changes, and subcontracting of process steps. It also required greater engagement with suppliers ensuring their capacities ramped up appropriately. Allocation of available ventilators necessitated engagement between leadership and pan-national organizations, governments and public health authorities, in a world where public health measures including travel restrictions, and export restrictions made such initiatives challenging. Shrinking air-freight capacity was a knock-on effect with most available transport capacity filled with personal protective equipment (PPE) and little availability to transport ventilators. In spite of this, production ramp-up from March 2020 to July 2020 saw the output of the Puritan Bennett™ 980 critical care ventilator rise from 200 to 1000 units per week with many lessons in crisis management learned.

Supply Chain Risk

The pandemic disrupted worldwide supply chains causing shortages in the availability of critical medical equipment, electronics, and raw materials. Medtronic’s CEO, Geoff Martha, spoke of supply chain difficulties for ventilators, ⁹ and components. He referred to a ‘catastrophic explosion’ in the supply of trade packaging, semiconductors, and resins. ¹⁰ This and prior events have led to a realization that such disruptions are no longer rare events but happen regularly, and need to be planned for.

These risks to supply chains occur in several broad areas including supply and demand, processes, and controls. This research categorizes risks into strategic, tactical, and operational categories, and are viewed through lenses including PESTLE analysis, ¹¹ and supply chain risk assessment, ¹² as shown in Figure 1. This research focusses on strategic and tactical knowledge levels.

Figure 1. Supply chain knowledge hierarchy pyramid (Adapted from Christopher and Peck ¹¹ ).

Supply Chain Disruption Management and Resilience

Supply chain resilience is key to mitigating these risks. While many definitions of supply chain resilience exist, ^12–15 the definition used here is, “the capacity of an enterprise to survive, adapt and grow in the face of turbulent change. ¹⁶ Achieving supply chain resilience requires a deep knowledge of the risks facing it. This research contributes knowledge to this effort by assembling the pandemic ramp-up experiences of key Medtronic personnel and suppliers, creating deeper understanding, and supporting decisions in areas such as sourcing components, collaboration, and supplier development, as well as location strategy, and efficiency versus redundancy issues.

Medical device supply chain vulnerabilities in planning, forecasting, production, and delivery were previously reported by McKinsey and Company, ¹⁷ where end-to-end supply chain visibility proved elusive. Previous studies identified issues due to competition with other industries for commonly-used electronic components as well as competition within the medical device industry for unique components such as oxygen sensors. ¹⁸ Excessive demand was also reported in other work, ^2,10,18–20 with solutions such as collaboration with third parties, ¹⁸ and easing of regulatory restrictions documented. Contingency contracts having potential to help in future crises by maintaining surge capacity in normal times were reported, ¹⁸ as was the necessity of allocation by medical need. ¹⁸ Business and production models such as global sourcing, single sourcing, hyper-specialization, and geographical concentrations also came under scrutiny. Import and export restrictions were also reported as problematic. ²¹ This research builds on previous work with a detailed interview-based PESTLE structured case study widely understood in both practical business environments and in research. It synthesizes the experiences of both the focal company and its suppliers and seeks unique insights based on their relationships and perspectives.

It documents how the supply chain and production ramp-up was achieved through interviews with key Medtronic personnel, and referenced documents, media interviews, and published literature. It identifies bottlenecks e.g., long lead times, customized components, and electronics as well as documents the approach taken to bolster the available workforce. It identifies strengths and weaknesses such as the benefits of long-standing relationships with key suppliers and strains caused by long distances. It brings these elements together as key findings. This study provides a timely analysis of factors impacting medical device production which will prove useful in developing strategies facilitating efficient and effective supply lines for future pandemics.

Method

Study Design

A retrospective case study approach was used, capturing the participants’ experiences through in-depth interviews. A descriptive approach documents how Medtronic ramped up its production capacity, identifying the factors which influenced the supply chain. This approach aimed to build a more general explanation of how this was achieved using thematic analysis. PESTLE themes ¹¹ are typically used to gather and analyze information about forces acting on a business, identify key issues, and develop mitigating strategies, ²² (see Table 2), hence providing an easily-understood structure familiar to both academics and managers. ^23,24

Interview Participants

Seventeen (n = 17) individual interviews were conducted with personnel outlined in Table 1. Four scoping interviews (n = 4) were conducted with senior Medtronic personnel to identify others who could contribute. Additional interviews were conducted with Medtronic personnel (n = 10) and Medtronic suppliers (n = 3).

Table 1. Participants’ roles in Medtronic (** = scoping interviews)

Table 2. PESTLE theme guidelines

Ethical approval

Ethical approval was granted under REC application 2022.08.005, by the Research Ethics Committee in the University of Galway, issued October 3, 2022. Participants were given a detailed information leaflet and ample time to study this before consenting.

Data Collection

Participants consented to an individual, semi-structured interview. Five interviews were held in person and the remaining 12 using Zoom and Microsoft Teams. Interviews ranged from 30 to 60 minutes between October 2022 and March 2023. Interviews were audio-recorded and additional notes were taken to facilitate follow-up questions.

Data Analysis

Interviews were transcribed using Word Transcribe with manual checking. Transcriptions were imported into NVIVO 14 (Lumivero, Denver, CO, USA), ²⁵ for data organization and retrieval. A variation of thematic analysis known as template analysis was used. ²⁶ The a-priori codes used in the initial template analysis codes were political, economic, social, and technical, as well as legal/ ethical, and environmental, derived from PESTLE. ¹¹ Sub-themes were added as necessary.

Research Rigor

Recruitment used purposive sampling initially, followed by snowball sampling, reaching a broad range of participants across the Medtronic organization. The interviewer assessed that data adequacy had been reached after 17 interviews as no new content was forthcoming. The interviews were informed by a topic guide mitigating interviewer bias. This engendered trust in the process and fostered forthright interviews. Some triangulation was achieved between the interview data using publicly available interviews and other Medtronic documentation. The in-depth interview method followed COREQ guidelines for qualitative research, ²⁷ Roller’s guidance for in-depth interviews, ²⁸ and Yin case study guidelines. ²⁹ The data was managed in NVIVO 14 (Lumivero, Denver, CO, USA).

Results

Summary of key Finding

Spikes in demand for ventilator consumables as early as January 2020 signaled the coming demand for ventilators and the need for a production ramp-up. Medtronic’s Drive for 5 started in March 2020. Governments and others rushed to source ventilators and simultaneously implemented initiatives supporting ventilator production. Humanitarian considerations took precedence over economic considerations, with an everything-goes investment attitude. Capacity constraints and shortages were experienced in workforce, space, components, and transportation, requiring investment and innovation in processes, and enhanced collaborations. Medtronic’s organizational strength and the close involvement of senior leadership were key.

Thematic Analysis Using PESTLE

Interview data were coded to PESTLE themes and sub-themes added (Figure 2) ²⁶ . Organizational factors were prevalent, and the environmental theme focusses on these. Key participants’ quotations are listed in Table 3.

Figure 2. Top level themes (blue) and sub-themes (green).

Table 3. Participant quotations from interview transcripts

Political theme

Three major political factors impacting the ramp-up were identified.

1. 1) Allocation pressures: Governments applied pressure to influence the allocation of the limited number of ventilators.

2. 2) Production support: Political influence supported production by facilitating flexible enforcement of movement restrictions allowing workers to travel to work and removing barriers to the movement of ventilator components which was otherwise restricted.

3. 3) Relationships with governments: Relationships were initially strained due to shortages and competition for devices. Broader understanding of the complexity of ventilator production developed among the parties during the pandemic leading to better cooperation.

Economic theme

The group identified 3 recurring economic matters:

1. 1) Cash flow and capital availability: Ramp-up was costly and required collaboration between Medtronic and its suppliers. Rapid capital investment was facilitated, and cash-flow allowances were made.

2. 2) Commercial considerations: Humanitarian rather than commercial considerations drove decisions.

3. 3) Impact of relationships with suppliers including ramp-down matters: Long-standing relationships were key in responsive supplier engagement. Ramp-down was difficult for suppliers and led to uncertainty within Medtronic.

Social/motivational/focus themes

Strong motivation and sense of purpose were reported i.e., producing life-saving ventilators.

1. 1) Singular focus: The sharp organizational focus on ventilator production was beneficial to the ramp-up effort. However, the commitment level was not considered sustainable long-term.

Technical themes

The technical theme refers largely to participant experiences relating to aspects of the ramp-up including components, sourcing, logistics, and process improvement. Several sub-themes were identified.

1. 1) Collaborations and the Puritan Bennett™ 560 specification release: Releasing the Puritan Bennett™ 560 design specification was seen as innovative and ambitious and built good faith with the public, and improved relationships with bodies such as the WHO and United Nations. It proved educational to others regarding the complexity of medical devices and their regulatory system. However, as knowledge of the COVID-19 disease developed, the Puritan Bennett™ 560 was of limited use in the treatment of severely ill patients, despite Medtronic expending significant resources to facilitate collaborative production. The many collaboration offers proved difficult to organize and harness effectively, and participants felt that efforts might have been better spent on Medtronic’s own production.

2. 2) Demand and forecasting: Early signals of the demand surge included demand for consumables such as tubes and filters. Uncoordinated ordering and demand by governments dominated the initial phases of COVID-19. Demand could not be satisfied, and allocation was required.

3. 3) Quality: Quality remained a top priority for Medtronic during the ramp-up, and the influx of inexperienced operators and suppliers required heightened vigilance. Medtronic’s ‘Quality begins with me’ initiative was an asset.

4. 4) Production processes: Several production process innovations were implemented and retained including change management, burn-in times, and component paint/ colors. Participants suggested many process changes impossible to execute during the ramp-up, but should be considered now, including electronic signatures, component testing at source, and electronic purchase orders.

5. 5) Trade-offs: In normal circumstances, optimization trade-offs are often necessary e.g., lean thinking versus inventory, local sourcing versus globalization, and single source versus multiple sources. Medtronic’s existing lean initiatives were generally helpful during the ramp-up. Multiple manufacturing facilities would not be practical given the historically small market size. However, participants suggested that localization at distribution centers may help shorten the supply chain i.e., delivery of a generic ventilator to distribution centers.

6. 6) Transport: Air freight capacity significantly reduced due to passenger fleets being grounded and most available capacity from Asia used for PPE during the first wave.

7. 7) Surge capacity: Initial doubling of capacity was straightforward was made easier by the slowdown in other industries. Manufacturing space was acquired using contract manufacturers. Medtronic was not fully aware of their suppliers’ surge capacity pre-pandemic, and this took time to establish and incorporate into planning.

8. 8) Components: Electronics, computer chips, proportional solenoid valves, and castings were identified as key components limiting the ramp-up. Long lead times, complexity, and specialization were characteristics of these key components. The most effective pathway to increased production was to support existing suppliers rather than developing new sources.

9. 9) Human resources: Recruiting staff were eased through the availability of skilled and experienced people from production lines within Medtronic and externally, through pandemic related layoffs. Engagement of an employment agency was productive. Communication between human resources and personnel was more difficult due to social distancing etc., necessitating innovations such as remote interviews. Ramp-down, although it was predicted, was difficult and procedurally onerous.

10. 10) Manufacturing space: Space was a constraint exacerbated by social distancing, resolved by engaging a contract manufacturer. The relationship with the contract manufacturer was more collaborative than usual.

11. 11) Machines and other facilities: Capital equipment purchases were not significant for Medtronic but were for suppliers and had long lead times. Suppliers felt that Medtronic’s involvement in the purchases could slow things down, due to formalities such as sign-off.

12. 12) Health and safety: While health and safety remained the priority, COVID-19 introduced new risks where close contact between staff members was unavoidable.

13. 13) Suppliers: Medtronic’s considerable number of smaller suppliers was acknowledged as a risk. Relationships were reported as strong, with visibility increasing during the ramp-up. Financial support, trust and cooperation were key. Senior Medtronic leadership intervened to resolve issues e.g., the supply of electronic chips.

Legal and ethical

Widespread import and export restrictions were overcome with the intervention of Medtronic’s government affairs department. Mandates e.g., the USA’s Defense Production Act, were useful allowing Medtronic prioritize ventilator production and to empower suppliers. Problematic movement control orders were alleviated by Medtronic’s government affairs department’s interventions. Regulatory restrictions were relaxed e.g., Emergency Use Authorization, a form of self-regulation, was available for ventilators and other innovations in the US. Ethical fair-share allocation was widely reported.

Environmental/ organization

A dedicated project team, assembled from the wider organization and including senior leadership, was productive. Participants reported on the benefits of senior leadership interventions in the supply chain. A culture of innovation and calculated risk taking was encouraged by senior leadership. A mixture of new and highly experienced personnel with innovative ideas positively influenced the decision-making process.

Discussion

Learnings emerged in all of the PESTLE themes and are discussed by theme below:

Political Learnings

Attempts by individual organizations to secure ventilators were ineffective. The findings from the interviews encourage coordinated international efforts based on clinical need and the recipients’ ability to utilize the ventilators – the latter limited by infrastructure and the availability of trained staff. There was widespread criticism of the excessive ordering and subsequent oversupply of ventilators, ^19,30 although this aspect should not create a false understanding of the threat. A future virus could severely affect a wider and younger population, whereas COVID-19 largely spared the young and healthy. Alternative scenarios should be simulated to enhance preparedness. Investment and political support will be required to underpin preparedness initiatives.

The WHO, BARDA, and Europe’s Health Emergency Preparedness and Response Authority (HERA) have roles here and each has published crisis preparedness strategies. ^31–34 Engagement between ventilator manufacturers and these bodies to implement preparedness strategies should be a priority.

Political influence to support medical device production was key. These initiatives can be evaluated and replicated in future crises.

Economic Learnings

Medtronic saw a spike in ventilator sales and revenue during the initial stages of COVID-19 and subsequently a significant fall-off in ventilator revenue. Humanitarian considerations took precedence over commercial matters. This led to the release of design specifications allowing others to produce ventilators. Some participants reported that the ramp-up had negative economic consequences for them and that the response to future crises might be different. For example, a future severe pandemic may be better served by higher end ventilators however, the same approaches to IP release may not be as effective for these ventilators due to their increased complexity.

The prospect of manufacturers being unable or unwilling to finance a ramp-up in a future health crisis needs consideration. Scenario planning of various influenza and other pandemics as well as estimation of their ventilator requirements, and likely market responses, would facilitate better planning and preparedness.

Social/Motivational Learnings

The highly motivated workforce was essential. However, the level of commitment was not sustainable long-term and repeated crisis scenarios might elicit different responses. Public support is not guaranteed. Preparedness planning should incorporate these behavioral factors. Within Medtronic, the singular focus on ventilators was productive, as distractions disappeared and traditional barriers to production reduced.

Technical Learnings

This section is the core of production - people, raw materials, suppliers, and transport, processes, machines, space, etc. All areas felt pressure. Initial ramp-up was straightforward as key players had spare capacity and supply chains held sufficient product. Subsequent steps-up were more difficult requiring flexibility, visibility, and heavy investment. While there was proactive work in Medtronic on single-source suppliers and other vulnerabilities pre-pandemic, there was low visibility into the supply chain’s surge capacity. The application of supply chain analysis frameworks addressing critical attributes such as component complexity, lead times, and specialization appears necessary.

Legal and Ethical Learnings

Legal hurdles to production were quickly overcome. Legal mandates were invoked to support production. Flexibility was required to negotiate these and was facilitated by Medtronic’s government affairs department initiatives e.g., intervening with public authorities.

Environmental/ Organizational Learnings

Medtronic’s organizational strength was positive, through capital resources, workforce, and market position, as well as senior personnel interventions. It cannot be assumed that critical suppliers in future scenarios will possess these strengths.

The study highlighted clear limits in the organization’s ability to respond to the crisis-led demand for ventilators indicating that crisis preparation is essential. Developing political strategies including needs-led, cooperative sourcing of medical devices and components, and legislative preparation for lockdown and import/ export exceptions. Economic preparation requires investment in supplier capacity where the impacts of both ramp-up and ramp-down should be considered. Workforce preparation can be achieved with flexibility measures such as cross-training. These initiatives feed into supply chain resilience, visibility, and flexibility.

Comparison of key Findings With Prior studies

This research used the PESTLE framework and its outcomes confirm and expand on 4 main medical device supply chain vulnerabilities reported by McKinsey and Company, ¹⁷ namely, in planning, and forecasting, as well as production, and delivery. End-to-end visibility proved elusive if not impossible. Forecasting was reported as heavily dependent on historical demand. In sourcing of both raw material and components, monitoring of tier-1 suppliers was patchy and little information was available on deeper tiers. This was compounded by single source suppliers for critical components. Participants attributed this to medical device production having typically been optimized for stability and regulatory compliance with the effects of limiting production acceleration and distribution. Delivery and logistics were widely reported as constrained with movement controls and lack of air- freight capacity. This study reported mixed results from its collaboration efforts where the initial rush of collaboration offers proved difficult to harness and limited success was reported. Nevertheless, significant achievements were reported by participants in duplicating production systems for simpler devices and specific complex components.

Other findings confirmed those of previous studies, ¹⁸ and provided further specifics on issues of competition with other industries for commonly-used electronic components as well as competition within the medical device industry for unique components such as oxygen sensors. Little excess capacity existed and accordingly, significant investment was required from Medtronic. ¹⁸ Excessive demand was also noted in other work. ^2,10,18–20 with solutions such as collaboration with third parties, ¹⁸ and easing of regulatory restrictions documented.

Improved demand prediction, coordination between companies and governments, regulatory relief, and improved information technology, as well as knowledge of surge capacity were identified as targets for improvement. ¹⁷ As suggested in this research, contingency contracts with potential to help in future crises by maintaining surge capacity in normal times were also noted elsewhere, ¹⁸ as was the necessity of allocation by need. ¹⁸ Similar to prior studies, business models also arose as issues with global sourcing, single sourcing, and manufacturing specialization detailed. Innovations in product development and certification were mirrored in other manufacturers. ²¹

Conclusion

This case-study documents the ventilator supply chain ramp-up experiences of Medtronic staff and suppliers during the COVID-19 pandemic and organizes the results in a PESTLE framework, interpreted through key findings and learnings.

The study exposed factors unique to the production of medical devices including the lack of third party awareness of the complexity of manufacturing and regulatory perspectives. This lack of understanding led to pressure for the release of ventilator designs and intellectual property without the knowledge required to achieve quality production and to achieve regulatory compliance. It showed the need for a political understanding of medical device supply chains and incorporating this knowledge into decision making processes around movement control and import/ export restrictions. The findings highlighted the importance of collaborative work with suppliers and outside the supply chain with third parties such as contract manufacturers. Also highlighted was visibility into the supply chain which developed during the crisis and how long-term trust relationships with suppliers bore fruit. Organizational adaptability and flexibility underpinned the ramp-up and supported the human resource needs. Vulnerabilities such as single-source suppliers and geographically dispersed suppliers were exposed, supporting an organizational shift to more crisis-proof supply chains.

The key lessons learned from this study are the futility of an everyone-for-himself national strategic approach with a solution necessitating a pan-national sourcing and allocation approach for scarce medical devices. The study showed the outsized impact of pandemic-related component supply problems combined with the dire need for critical medical devices. It highlighted the limited capacity of a response-led approach to satisfy crisis demand and the necessity for preparation and scenario planning. The limited capacity of a response-led approach was due mainly to a lack of public and political understanding of the technical and regulatory complexity of medical device production.

Impact

This work contributes to future pandemic preparedness by documenting and analyzing the experiences of a critical medical device manufacturer, providing learnings on critical supply chain and production strategies during the crisis and highlighting barriers and facilitators to satisfying the pandemic demand-spike. It documents forces acting both in support of and hindering the ramp-up. It reveals the economic effects throughout the supply chain and highlights difficulties experienced by suppliers particularly in complex, specialized components. It highlights the need for coordinated and sustained international efforts to maintain capacity in preparation for future health crises. This can contribute towards execution of international pandemic preparedness strategies such as those of HERA and BARDA.

Limitations of This Research

While this research documents and synthesizes Medtronic’s ramp-up experiences, largely agreeing with prior studies, it remains a single case-study and only cautious generalizations are possible. The interview method has limitations including selection and confirmation bias. ²⁹ These effects were mitigated by selecting across a range of disciplines within Medtronic and outside suppliers. With the broad range of expertise among the interviewees, it was challenging to bring this diverse information and documentation together. The PESTLE themes were useful but alone, it is insufficient to tell the full story of the ramp-up as became apparent with the data analysis requiring sub-themes, based on recurring ideas in the interview transcripts. While generalizations are difficult, many of the findings of this study have been supported by prior work. ^{5,17,18,21,35,36}