The past 6 months created significant challenges for the sourcing of PPE. It brought out the best and worst in suppliers, created headaches for buyers, wasted time for organisations and increased costs at a time when funding was decreasing. We talked about some of this in our summer PPE blog (available on our website).
Since the summer, the PPE market has slowly stabilised from its previous levels of high volatility. However, demand remains high vs. pre-COVID levels – and prices, although lower, are still relatively high.
As an organisation that has sourced near 60mil of medical consumables for clients this year alone (i.e. Aprons, Overshoes, Gloves, Masks, Oversleeves, Sanitiser, Covers) we are uniquely placed to advise that there are several points for Care providers to consider when looking to source PPE now, and when the current government support ends.
In this update, we’ll share our views on pricing and availability, as well as covering some of the various ways in which PPE can be sourced efficiently, quality assured and cost effectively.
In this article we’ll be addressing the challenges we’ve face on price and availability and share what we’ve learned along the way.
Price & availability trends
At the height of the crisis, PPE manufacturers and suppliers took full advantage of the increased demand in PPE. Some of the statistics on price inflation, in the Health and Care market alone, that we came across, were staggering. Across our Social Care sector clients, the inflation figures on price by category from February to May this year were:
Thankfully, we have seen production capacity catch up with demand and the bottlenecks seen in supply at the start of the pandemic are no longer a regular occurrence.
Availability in the market for most products is much improved. In fact, in some cases, over-production has meant that there are PPE stocks sat in UK warehouses not being used. As a result of this rebalancing of supply and demand – prices for aprons, masks, sanitiser and visors have all reduced.
Within gloves however there are specific challenges. Nitrile glove prices continue to rise. This is because the NHS (and US market) primarily use this specification and the massive demand these two entities places pressure on prices forcing them upward. This doesn’t necessarily mean that the product is not available, but it does mean that buyers can expect to pay significantly more than for Vinyl or Synthetic specifications.
The overall situation is still not ideal – prices, although lower than the summer peaks, are still above historical averages (we have been reviewing since 2015). This is unlikely to change over the medium term. The table below provides a relative comparison of pre COVID, peak COVID and current pricing levels:
| Product | % increase on prices seen during Feb – May | % change in prices seen May – Nov | Current pricing vs. Historical Averages |
| Nitrile Gloves | 300% | 22% | 83% |
| Disposable Plastic Apron | 471% | -78% | 30% |
| Type II Surgical Mask | 5124% | -89% | 700% |
| Hand sanitiser – 5 litre | 365% | -4% | 23% |
| Type IIR Surgical Mask | 346% | -84% | Only recently tracked |
We should note another major factor in the supply market currently is the UK Government’s PPE portal. This has been in place since June 2020 and will continue until 31/03/2021. The aim of this service is to enable certain organisations and Care providers to secure all of their increased PPE needs (as a result of COVID) for free, through pre-approved and contracted suppliers. However, the reality is that the quantities available to individual organisations are, in nearly all cases, insufficient to cover the organisations demand. In these instances, organisations must perform their own additional sourcing with existing or new suppliers simply to meet their full basic requirements.
Although there are some positive signs that we are inching towards a vaccine, this is unlikely to have a widespread impact until at least late 2021. This means that high demand for PPE products is here to stay over the medium term, and when the Government portal finishes at the end of March 2021, organisations will need to have a plan to ensure that their sourcing resources and channels can support 100% of their requirements.
Sourcing options
Government portal / support
Through this portal organisations can place orders for Type 2 Masks, Aprons, Gloves, Hand Sanitiser and Visors. The amount of each item that can be ordered is dictated to by the type of organisation and the size of the operation. For example, in Social Care, residential care homes with between 25 and 49 beds can order up to 500 Type 2 masks per week, whereas a residential care home with between 50 and 99 beds can order up to 1000 Type 2 masks.
PPE ordered through the portal is free of charge, including free delivery. Orders are despatched through Royal Mail and are targeted to deliver within 5 days.
If, as a result of COVID demand, care providers are still struggling to source adequate PPE, they can get in contact with their LRF (Local Resilience Forum).
This service will close on 31/03/2020 and care providers should continue to utilise this service until then as it is a free resource.
3rd Party Portals
There are a number of alternative online entities that have been set up to aid the sourcing of PPE. These can include online ordering platforms or online marketplaces. Online portals can provide organisations access to PPE at pre agreed prices, quality and suppliers. This can speed up the sourcing process through having the groundwork completed by the company managing the portal.
For example, The National Care Association currently cites 3 such portals:
carehomeshopping.com
ppexchange.co.uk
bioperl.co.uk (previously ppefor.uk)
Bioperl is currently supported by the National Care Association. If you are in Social Care you are able to receive a discount on all of your orders through this portal.
Self-sourced
Unlike a portal, when sourcing direct from a supplier, the buyer has increased personal choice and control over the quality, costs and outputs of the supplier. However, when choosing this route there are a number of points that organisations should consider:
- Buy higher quality and buy once – avoid issues such as double-gloving by buying good quality products
- Confirm quality specifications before you enter negotiations with suppliers to save time and resources. This will ensure clarity on what products are being offered and makes sure that both product and price comparisons are like for like.
- Confirm internally your businesses specifications – are you sourcing the correct specification of product i.e. will a Vinyl glove be sufficient vs. a Nitrile glove?
- Review which suppliers have supported you through the difficult times. Who went the extra mile to deliver, or who was able to minimise price increases? The suppliers that provided you excellent service under pressure and can still provide competitive pricing you may wish to prioritise, especially if such loyalty aligns to your organisations values
- Plan ahead – you should have a history and forecast of your on-going, minimum requirements for PPE. Use this to review stock holding and future order volumes and frequency. With prices now lower it could make sense to leverage a bulk volume and purchase at a competitive price to secure supply.
- Make sure your latest pricing on all PPE products is significantly lower than it was than in the height of the bottleneck in supply. If not, go back to your suppliers and renegotiate asap! Use our average grid as a guide, or contact us for a current benchmark price of any specific product(s).
- The government reduced VAT to 0% on PPE purchases from 01/05/2020 until 31/10/20. This has now reverted back to 20%. Review with your Finance team to ensure that the benefit on all orders in this period has been captured
- Ensure you have a preferred supplier list for regularly ordered products and volumes. The supplier you may wish to be loyal to may not be able to facilitate all your needs or volumes, at the right price, so ensure you have options to compare and ensure the right quality at the right price.
- Ensure you are following your organisations internal Financial Regulations, linked to Public Regulations, if sourcing regular sizeable volumes, or one-off large orders
Marr Procurement has been impartially supporting our clients source high quality PPE at market best pricing for five years for the Care, Charity and Social Housing sectors.
If you would like to discuss any of the points in this blog further, or request impartial benchmarking or ongoing support, please get in touch at ppe@marrprocurement.com or christopher.barber@marrprocurement.com