Manufacturing in Puerto Rico

Lessons for Manufacturing in Puerto Rico in times of COVID-19

COVID-19 has been the most severe pandemic globally during this century. As of the date (April 19, 2022) 505 million people have been infected with COVID-19 and almost 6.2 million have died worldwide from the disease.

During two years, we have learned a lot about COVID-19. The virus, which originated in China, is highly contagious and can kill people of all ages, although the risk of dying is higher in the elderly. Vaccines have helped prevention but do not stop the virus from circulating. Two years into the pandemic, vaccines have not reached all parts of the world, and variants continue to cause waves of contagion.

There are ways to minimize the danger of the pandemic. People are requested to take utmost care of their personal hygiene, physical distancing, extensive testing, and acting quickly based on test results.

The coronavirus pandemic affected many industries. Manufacturing is one of the industries that has been heavily affected by the pandemic. This is one of the most important industries, it has reached 16% of the global gross domestic product.

Government-imposed quarantines or curfews were the main causes of this impact. Manufacturing wages and labor costs increased in 2020 from 5 to 20 percent of total costs.

Despite this, not all industries have been affected in the same way. Food manufacturing and pharmaceuticals have had a minor impact compared to other industries such as automotive or aerospace.

Many pharmaceutical companies have been exempt from the quarantines imposed by governments, but their operations were still affected.

One of the main reasons has been the disruption of the global supply chain. Some pharmaceutical companies have problems with the supply of raw and packaging materials. Similarly, companies operating in different parts of the world had to deal with the difference in policies and guidelines of each country.

This affects day-to-day operations and employee management. Companies that have implemented remote work dealt with the inconsistency of their employees’ internet and improving cybersecurity measures. Furthermore, as the pandemic continues spreading, the physical and mental health of employees is a factor that companies constantly have to deal with.

The challenges of manufacturing industry are:

  • Companies need to diversify and be less reliant on one country or region for their materials. China is one of the main exporters of raw materials in the manufacturing industry, but the origin of the virus and having established such a severe quarantine, it affected the supply chain of the industry. Two years into the pandemic, China continues to establish quarantines that continue to affect the supply chain of companies.
  • Companies should first understand their supply chain vulnerabilities that may be most affected by the pandemic, or by new events.
  • The health and safety of employees must be a priority. Measures must be established so that in the event of future waves of COVID-19 or other possible pandemics, the workforce can continue working and operations are not affected. This is essential for workers who have to go to their workplaces during a health emergency. At the same time, companies should be more empathetic with the workforce. Employees are dealing with many things at home because of COVID-19.
  • Senior management must maintain constant contact with employees during the crisis.
  • Companies should consider automation to minimize the number of human labor. They can also develop the capabilities of their existing workforce to fill skills and abilities gaps in the marketplace.
  • Enterprises must stay abreast of regulatory changes in their markets and put processes in place to proactively address future requirements.
  • If they have operations in several countries, they should determine which is the most favorable jurisdiction in times of crisis.

COVID-19 and Manufacturing in Puerto Rico

Pharmaceutical manufacturing in Puerto Rico was not affected in the same way as in other parts of the world. The government of Puerto Rico allowed companies to continue to work despite the strict curfew that they implemented on the Island.

Executive Order OE-2020-023 of March 15, 2020, did not apply to pharmaceutical companies, nor companies in the distribution chain of goods and services, businesses, and individuals that the government deemed essential that they remain working during the curfew. This was a key policy measure because 12 of the world’s top 20 pharmaceutical companies are located in Puerto Rico and it was necessary to keep them operating at a time when medicines and medical supplies were so necessary.

Puerto Rico kept pharmaceuticals and other manufacturing companies operating during the most critical part of the pandemic and they were able to keep their workforce healthy and avoid outbreaks in the companies. This is a good thing that should be highlighted and must be taken as an example for the rest of the world. Despite the success achieved so far, manufacturing companies have to maintain the controls and protocols that have prevented outbreaks in companies.

History has taught us that in a pandemic it is common to have multiple waves of the disease. The first wave is more severe and deadly. This was recently seen with the Delta and Omicron variants of COVID-19. Manufacturing companies in Puerto Rico have to be prepared for future waves of COVID-19 or other pandemics, especially when the Puerto Rican government does not have absolute control over the entry of people into the territory.

Prevention measures for COVID-19 and other similar diseases have to become the new reality for manufacturing companies. Securing the collective welfare of 100,000 employees of the manufacturing industry must be ensured. Manufacturing in Puerto Rico is, by far, the most important industry in economic terms. It represented 47% of the Island’s Gross Domestic Product (GDP) in fiscal 2019.

It is a phenomenon unique in the world. That’s the reason why safety and health have to remain a priority. At least until an effective vaccine against COVID-19 is discovered, businesses will have to continue to enforce physical distancing rules and maintain plant reorganization to ensure 6 feet of distance between employees, customers, and visitors.

It is also necessary to maintain strict controls and cleanliness in the common areas where employees often socialize. As long as the company allows it, remote work should be an option.

Even controlling COVID-19, there are other challenges or problems related to the pandemic that may arise in Puerto Rico. The supply chain can be affected as a consequence of activities from other countries. Pharmaceutical companies and the rest of the companies in the distribution chain in Puerto Rico need to include provisions in their business continuity plans in the event of more waves of COVID-19 or future pandemics.

Being prepared will be essential to maintain the success that has been achieved in Puerto Rico so far. Finally, companies must continue to demand transparency from governments regarding the policies and decisions made. The data must always be provided in a complete and transparent way so that it can be used by companies when making decisions.

References

  • Al Essa, T.S. (January 14, 2022). 5 ways the COVID-19 pandemic has changed the supply chain. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2022/01/5-ways-the-covid-19-pandemic-has-changed-the-supply-chain/
  • Balflour, H. (January 19, 2022). Key challenges for bio/pharmaceutical manufacturing 2022. European Pharmaceutical Review. Retrieved from https://www.europeanpharmaceuticalreview.com/article/167733/key-challenges-for-bio-pharmaceutical-manufacturing-2022/
  • Global Data Healthcare. (2020, April 23). The impact of big pharma on Covid-19. Retrieved from https://www.pharmaceutical-technology.com/comment/covid-19-pharmaceutical-companies-impact/
  • Lima, L. (2020, March 17). Coronavirus: 5 strategies that are working in countries that have managed to contain covid-19 infections. Retrieved from BBC News Mundo: https://www.bbc.com/mundo/noticias-internacional-51919935
  • Lloyd, A. (2020). Impact of COVID-19 on the Manufacturing Industry. Retrieved from Interact Analysis: https://www.interactanalysis.com/impact-of-covid-19-on-the-manufacturing-industry-infographic/
  • Mabiyan, R. (2020, May 09). Pharmaceutical industry expected to see positive growth this year: Charu Sehgal, Deloitte India. Retrieved from ET Healthword: https://health.economictimes.indiatimes.com/news/pharma/pharmaceutical-industry-expected-to-see-positive-growth-this-year-charu-sehgal-deloitte-india/75639652
  • McKinsey & Company. (February 16, 2022). COVID-19: Implications for business. Retrieved from https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/covid-19-implications-for-business
  • Mehrotra, S. (2020, May 14). Excipients Demand Forecasts with the COVID-19 Impact on Pharmaceutical Production. Retrieved from https://www.klinegroup.com/articles/excipients-demand-forecasts-with-the-covid-19-impact-on-pharmaceutical-production/
  • Miller, R.T. (2020, June 1). Puerto Rico’s Big Pharma Push. Retrieved from IndustryWeek: https://www.industryweek.com/the-economy/article/21132824/puerto-ricos-pharma-push
  • NAM. (2020). NAM CORONAVIRUS OUTBREAK SPECIAL SURVEY FEBRUARY/MARCH 2020. Retrieved from https://www.nam.org/wp-content/uploads/2020/03/NAM-SPECIAL-CORONA-SURVEY.pdf
  • Executive Order. No. 2020-023, Government of Puerto Rico (2020).
  • Research and Markets. (2020, April 16). Impact of COVID-19 on the Global Manufacturing Industry, 2020. Retrieved from CISION PR Newswire: https://www.prnewswire.com/news-releases/impact-of-covid-19-on-the-global-manufacturing-industry -2020-301042150.html
  • Schiffmann, A. (2020, June 12). World COVID-19 Stats. Retrieved from https://ncov2019.live/
  • Sorensen, J., & Bono, B. (2020). COVID-19: What it means for industrial manufacturing. Retrieved from PwC: https://www.pwc.com/us/en/library/covid-19/coronavirus-impacts-industrial-manufacturing.html
  • Swanson, A., & Bradsher, K. (January 16, 2022). Supply Chain Woes Could Worsen as China Imposes New Covid Lockdowns. The New York Times. Retrieved from https://www.nytimes.com/2022/01/16/business/economy/china-supply-chain-covid-lockdowns.html
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By

Raúl Figueroa

Demographer, graduate of the Graduate School of Public Health RCM. Creator of the documentary "Más Allá del Censo: La Crisis Demográfica de Puerto Rico".

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