Paying low prices for products allows for strong cash flow and ledger numbers, said Sanders, and the company will have a predictable supply source when it runs smoothly.
The flip side is with commodity goods like generic drugs, supply chains are narrow, because low price is the top priority. When drugs are produced for pennies instead of dollars, "you have to create these unbelievably efficient and narrow supply chains that have no redundancy and no resiliency," Michael J. Alkire, president of group purchasing organization Premier, told Supply Chain Dive.
Certain countries and regions are the prime sourcing and manufacturing locations not only for drugs, but for personal protective equipment (PPE) and testing supplies.
The test kit swabs are produced in Northern Italy, an area hit hard by COVID-19, though swabs are still being exported. Premier sources exam gloves from Malaysia, PPE from Cambodia and face masks from China and Taiwan.