The Historic Push For PPE

As COVID-19 menaced the world, an acronym known to relatively few — PPE — made its way into the lexicon of ordinary people. Personal protective equipment, or PPE, was worth a king’s ransom at the pandemic’s apex, as were adjacent products from hand sanitizer to isopropyl (rubbing) alcohol, latex gloves and, on the high-end, hospital-grade ventilators.

Strange new patterns of demand quickly overcame existing PPE supply chains, and a fascinating mobilization began where factories were repurposed WWII style to make face shields, ventilators and PPE for thousands of frontline healthcare professionals and essential workers.

PYMNTS’ June 2020 PPE Supply Chain Report, an American Express collaboration, explores ramifications of this rapid manufacturing and procurement response to the pandemic crisis.

“Beating the PPE shortage requires a ramp up in manufacturing, with the World Health Organization (WHO) projecting in March that global production needed to rise by 40 percent to sate demand,” the report states. Companies from Hanes to General Motors, among others, answered the call, and those stories are richly detailed in the new report.

Protection Payments

“The need to generate more equipment has spurred many non-medical companies and altruistic individuals to start creating masks, goggles and other gear. Manufacturers are also repurposing their industrial equipment, reviving decommissioned factories and converting their existing layouts and workflows to create new items,” the report says.

Numbers are fairly staggering even as COVID-19 infections slowly recede, with $98.3 billion in annual spending on PPE projected by 2027. But making more PPE isn’t the only issue.

Procurement of PPE at the company level is often a sizeable B2B purchase, which are still surprisingly paper-based, lacking in both speed and transparency. That’s changing too, as the B2B payments space moves towards end-to-end digital transformation.

“In the last few months, we’ve seen companies focus on selling goods and buying inventory online. As a result, digital and integrated payments, including credit cards, are gaining more traction in the B2B space,” R.J. Ancona, vice president and general manager, National Client Group B2B, American Express, told PYMNTS. “With so many working virtually, access to send and receive traditional payments like paper checks is limited and more complicated from home. Digital payments help sellers get paid faster and buyers [to] make convenient payments while benefiting from working capital and cash flow management.”

New Partners, New Possibilities

The June 2020 PPE Supply Chain Report enumerates a multiplicity of creative PPE responses, including new directions for 3D printing and new life for outdated and unused facilities.

It’s the next normal people are talking about, as face masks are poised to become a flu-season fashion fixture in the western world just as they have been in other parts of world for years. This will require new partnerships and payments flows as PPE becomes part of everyday life.

“We are also seeing companies seek out reliable new sources of PPE — and it is a trend we expect to continue as companies begin to reopen. Since we work with both buyers and sellers, we have been connecting companies with our extensive healthcare supplier base and helping them discover new nontraditional sources, from retailers to technology companies, who are pivoting their supply chains to meet critical PPE needs,” Amex’s Ancona told PYMNTS.