- An expert in global supply chains said invoking the Defense Production Act to ramp up nationwide production of masks and ventilators should have been the first thing President Donald Trump did when the coronavirus outbreak began to worsen.
- Amid dire shortages of personal protective equipment and other medical supplies, a number of companies have pivoted their factories to producing the sorely needed products.
- But the companies have encountered chaos when it comes to the marketplace, and customers have reported highly competitive bidding wars as governments and hospitals seek to place orders.
- Nick Vyas, an assistant professor at the University of Southern California, told Business Insider the companies are trying to assess demand and sort out supply chain logistics on their own — but the federal government could be doing that for them.
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As the United States’ mask and ventilator shortage grows dire, the companies who have rushed to manufacture them say they’re struggling to navigate a chaotic marketplace, and they desperately need guidance from the federal government.
Small and large companies across the country have overhauled their factories and started making personal protective equipment, but their customers have encountered fierce, eBay-style bidding wars between hospitals and governments over the products.
Nick Vyas, an expert in global supply chains at the University of Southern California, told Business Insider the solution is to have one central authority to command and control the manufacturing and sale of sorely needed medical supplies.
“What’s happening is that everyone’s trying to do individual demand assessment, individual supply chain planning,” Vyas said. “A decentralized model makes it challenging for small companies to pivot and supply to this large demand that we have… And unfortunately, because it’s not centrally consolidated and executed, it’s very hard to capture the market share.”
That means the Defense Production Act, a 1950 wartime law, should have been invoked aggressively four to five weeks ago, Vyas said.
“The DPA would have been the first thing that we should have executed,” he said. “The reason being is that that level of centralized efforts are necessary to execute the situation at hand.”
Associated Press/John Minchillo
President Donald Trump has so far used the DPA only a handful of times to address the coronavirus outbreak — first, to push General Motors to ramp up its ventilator production, then on Thursday to force 3M and six other companies to create both masks and ventilators.
‘If somebody from the federal government came in … that would be incredible’
Previously, Trump had been reluctant to use the law, saying US companies “don’t need it” and that he didn’t want to nationalize private industry.
But experts like Vyas and companies that have pivoted to creating PPE told Business Insider they would welcome federal intervention — they viewed the DPA as something that could facilitate, rather than interfere with commerce.
“If somebody from the federal government came in and said, ‘We need you to make 200,000 face shields, here’s your supply chain,’ and we could do it, that would be incredible,” Ben Waxman, the co-owner of a Maine factory that pivoted from fleece apparel to face shields, told Business Insider.
The White House did not respond to Business Insider’s request for comment.
Vyas said it’s not too late to use the law more forcefully, but the government needs to step in quickly and decisively so that companies aren’t trying to assess demand and sort out supply chain logistics all on their own.
“We need to really have an extreme mindset and sense of urgency,” he said. “Could we have done better? Absolutely. Could we have executed the DPA four weeks ago, five weeks ago? Absolutely yes, we would have been in a much better space today. And it’s not that we would have avoided having COVID-19 disrupt our world, but we would have had much better response capabilities than we do today.”
