Article republished from Pioneer Press
Dave Hemink prides himself on running a Minnesota-made company that designs, develops and manufactures the little devices that doctors put on your finger to measure your blood oxygen.
And business has never been better.
“We expanded into a different building on our campus, broadened our manufacturing area,” said Hemink, whose pulse oximeters are being used in COVID-19 tests around the world. “We’ve been hiring people left and right.”
But even a Minnesota company like Nonin Medical — that’s the name of his Plymouth-based medical device company, short for “noninvasive monitoring” — isn’t immune to global supply chain issues. The raw materials for his pulse oximetry machines, for instance, come from the Philippines, one of the first Southeast Asian countries to close up shop during the pandemic.
The sub-components of some of his medical devices are assembled at specialty car part factories and other manufacturing plants in Minnesota, India and throughout Southeast Asia, and several of those sites have been sidelined by stay-at-home orders amidst the coronavirus crisis.
“Our demand is up across everything at least 10 times, probably much higher than that,” said Hemink, who employs 230 workers and ships globally. “We have product lines that are up 2,600 percent.”
KEEPING INTERNATIONAL SUPPLY CHAINS OPEN
How does a medical device maker keep international supply chains open in a time of crisis? The answer is testament to both the power of bi-partisan cooperation and international maneuvering during the pandemic, and the ongoing struggle to produce even medical supplies deemed essential.
In the Philippines, “there were some factories that had closed that we needed to get access to,” Hemink said. The Philippines was among the first Southeast Asian countries to institute strict stay-at-home orders in mid-March.
In response, Hemink reached out to Medical Alley, a Golden Valley-based healthcare, research and lobbying association, which is accustomed to fielding requests for help, but not usually this kind of help.
“That would be a new one for us,” said Shaye Mandle, president and CEO of Medical Alley.
“We regularly have members contact us — they might be having a regulatory issue, or reimbursement issue or tax credit issue,” Mandle said, “but this one was certainly unique.”
Medical Alley, in turn, reached out U.S. Rep. Dean Phillips, a Democrat who represents the western suburbs, and Phillips roped in the U.S. State Department.
“(Our) office … worked closely with Nonin on this issue,” said Sam Anderson, Phillips’ press secretary.
The effort traveled up to U.S. Vice President Mike Pence’s White House Coronavirus Task Force, and from there to the government of the Philippines. The Philippine factories that Nonin relies upon to produce raw material for pulse oximeters were prioritized for reopening and recently came back online.
That still may not be enough.
“We’re waiting for the output from the factory to hit here,” Hemink said. “The demand that we have, we’re still wondering whether they can meet that demand right now.”
A PLACE IN LINE
So why not simply switch to a different materials supplier? The short answer is with a new supplier, Nonin would be last to come, and likely last served.
“We’d be at the back of the line,” Hemink said. “We don’t want to lose our place in line, so to speak.”
Gov. Tim Walz’ recent stay-at-home orders included plenty of exceptions for essential businesses, including Nonin. But that’s only half the story.
“We were listed in that order, but some of our suppliers weren’t,” Hemink said. “And if I only have 8 out of 10 components, I can’t build.”
He’s hoping sub-components to some of his oxygen monitoring machines continue to come in at a pace that meets demand, which will depend upon both local and global supply chains opening up — even those that are not strictly within his industry.
“A lot of these suppliers are smaller businesses that may make one or two components in med-tech, but their main business may be in automotive or in a completely different industry,” Hemink said. “They could be a critical supplier, and we have to have the part they supply.”