Supply Chain Insights: The State of the Disposable Gloves and PPE Market
Unless you’ve been hiding under a rock, you’ve noticed that disposable/single use gloves and most personal protection equipment (PPE) is very hard to find…. And expensive! Why?
Here is what we know:
- Manufacturing of single use glove and PPE is only at about 90% of pre-COVID levels. This is because there is a lack of packaging material, raw material, and available labor. These factors have combined to cause all of the current glove and PPE vendors to place NIchols (and all other distributors) on “allocation”. This means that there are set amounts of these items that we are allowed to order on a monthly basis. These numbers are usually based on product availability as well as Nichols' monthly usage of that product before COVID.
- Global and domestic demand for these items is at unprecedented levels. Reuters Business News estimates current demand at 2X+ pre-COVID levels. Factors that contribute to this are people returning to work, those who were required to wear PPE before are now changing these items more frequently, and those who had not been required to wear any PPE before are now doing so regularly.
- Logistical barriers are wreaking havoc on lead times and pushing out delivery dates. International ports are shipping containers less frequently. Also, once products hit our shores, it can be a struggle to find trucks and drivers to move the product domestically.
- The US Customs and Boarder Protection (CBP) has banned all products produced by Top Glove, the world’s largest producer of single use gloves. Although this ban was put in place for good reason (Forced labor practices, excessive overtime, debt bondage, abusive working/living conditions, and more. You can Google “Top Glove banned” for more information), this puts even more of a strain on the supply chain.
- Glove and PPE prices are expected to keep rising through the end of this year and into 2021. Projections estimate we could see pricing at 6X pre-COVID levels by the end of the year.
Here at Nichols, we recognize these challenges. We are taking advantage of all possible avenues to keep these supplies coming. Some of the steps we are taking include; buying our allocations as soon as they are available, sourcing items from new vendors or vendors we did little business with before, taking advantage of spot and special buys, and also not openly taking new business in this product category. We feel our first responsibility is to those customers who have been loyal to us.
In summary, glove and PPE procurement is going to continue to be challenging for the foreseeable future. Prices will continue to rise. We will continue to do our best to bring these items in, to keep pricing down, and to be a resource for our customers. We are better together. #HTH #THWR
Special Thanks to our Guest Blogger Ashley Campbell!
Ashley works out of the Traverse City Michigan office. She has been with Nichols for 10 years gaining valuable cross-functional experience as a customer service representative, an outside sales account manager and, most currently, a buyer where she specializes in PPE procurement. When not at work, Ashley enjoys spending time with her two daughters, playing with her dogs, and being out on the water whenever the weather allows.