B. Braun: The Private Sector as An Ally During COVID-19 Crisis

Q: How has the company’s commitment to the company grown?

A: Depending on third parties is not our strategy as there are many factors that can impact our operations. Having our processes centralized – logistics, accounting and staff – allows us to maintain control but most importantly, to provide many benefits to our employees.

Our new distribution center (CEDIS) will boost our growth in the next six to eight years, according to our projections, and we also have the option of expanding it because it is was built according to a modular infrastructure concept. The main goal of the CEDIS is to have more capacity to serve the large volume orders that we receive from the government. B. Braun participated in the last tender under the government’s new centralized purchasing scheme and winning that tender meant a lot of growth.

On-time delivery is key for the government, so B. Braun has to tackle all challenges related to logistics, which is why CEDIS was key for our development. Additionally, we have exclusive transportation and drivers. The only time we ask for third party support is when a delivery is destined to foreign markets where logistics require local knowledge. Documentation is a long process for companies in tenders and this has slowed down and even stopped deliveries that could be faster. This is more an internal challenge for the government to have all the requirements and regulations clear for all pubic healthcare institutions to avoid delays or shortages.

Q: How do investments like CEDIS reflect your commitment to Mexico?

A: We are seeking to have the functionalities of the company in house, seeking to reduce the dependence on third parties in our central services, such as Logistics or Accounting with own personnel, so that all our collaborators have the benefits of direct contracting by B. Braun and not just through outsourcing. This is part of the concept we have of being a socially responsible and sustainable entrepreneur.

As for CEDIS, it is an infrastructure that will serve us for our current operation and our growth for the next six to eight years, with the possibility of expanding the building under a modular concept, which allows us to directly serve businesses high-volume government sector. For example, in the most recent consolidated tender E5, B. Braun was the company that participated with the highest number of codes, being assigned in an important way, and that we are already executing directly from our CEDIS.

For the metropolitan area, we have our own transport and delivery service and, with the support of logistical third parties, we complete the distribution network in foreign areas.

CEDIS has been a project that has brought an important benefit with this option of participating in large volume projects directly and we still have many more products that we want to bring to Mexico to participate with even more presence and with more impact on the system of health in Mexico.

Q: What makes B. Braun an integral provider for healthcare in Mexico?

A: We are making all the necessary investments to bring and distribute more innovative products for the health system. For example, our investment in 2020 in Mexico exceeds MX$120 million (US$5,347.91) only in equipment, such as hemodialysis pumps, infusion pumps, equipment for orthopedic implants, intercranial precision monitoring for head injuries and products that can promote technological development in the hospitals. As a way to contribute to the Mexican health sector, B. Braun has presented one of our most successful models, which is the rental of equipment. This reduces the impact of capital requirements, in both the public and private sectors, and optimizes the operating costs of institutions.

Apart from this, we are very interested in introducing more pharmaceutical products in Mexico. We have a strong line of medical devices, but we also have a pharmaceutical line focused on injectable solutions. We do not produce tablets. We have had a very high demand for our Noblak paracetamol solution, mainly from the government, because you know that this product is useful as a pain reliever for COVID-19 related problems. At this time, we have stopped participating in tenders for this product as our headquarters is experiencing global demand and Noblak is oversold.

Additionally, we work closely with associations such as CANIFARMA and AMID to ensure that our products can be delivered to Mexican patients and to ensure a good relationship with the government to resolve any complications in documentation or processes, especially during the COVID-19 when all deliveries must be made in a timely manner.

Q: How would you describe the current public-private relationship in the healthcare sector?

A: At the beginning of the López Obrador administration and for half a year, there was a great deal of misunderstanding until the new government identified the companies that are and have been allies to the country. Right now, the relationship is closer, especially with the Ministry of Finance and Public Credit, which is in charge of the tender processes. Also, there has been more dialogue between us and I do see the overall relationship growing.

Q: How has the outbreak of COVID-19 impacted your operations in Mexico?

A: It has been a time of new challenges, since it first appeared in China at the end of last year, because the Chinese market began to absorb more materials to satisfy its own need. Later, between January and February the virus reached Europe, where we had exactly the same situation with very important outbreaks and a lot of pressure on the health systems, so there was a high demand for products. Subsequently, it was presented in America reaching our countries, but in Mexico unfortunately we did not identify the dimension of the problem.

We had many requests from February to March to purchase more products required for COVID-19 care, but at that time our global production for 2020 was already sold or committed. Mexico expected companies to prioritize the country, which in reality was no longer possible. As a future lesson we have to consider a better planning of the demands, foreseeing the situations in a realistic way, as well as having a better structure to request it, in order to avoid duplication and rework. We expect a little more coordination and strategic programming from the government in that part.

At B. Braun we try to have local production in the countries where we have commercialization to balance the mutual benefit. With the outbreak of COVID-19, in Mexico we implemented a Health Committee and we had to adapt the production processes to comply with protection measures such as healthy distance, the implementation of more shifts, access controls to facilities to identify possible cases and send them to medical evaluation by health professionals hired by the company, rounds of own personnel from other areas that provide support to the operations in the Plant to measure the temperature of the collaborators every two hours while validating that the team of Protection is being used properly and workplaces are well disinfected.

In the same way, we supply devices such as mouth covers for the moments of transfer to work and back home, together with training for the correct use of these personal protective equipment and to prevent contagion in private life; as well as specialized training for personnel who attend hospitals as part of their functions.

Supply chains have also been affected as flights and shipments are limited. Some suppliers of raw materials were not considered part of the essential industries, but overall we are doing quite well and, fortunately, the impact has been minimal.

Q: As a result of the pandemic, which of your four divisions has grown the most in demand?

A: Growth came from our basic care and vascular care divisions. Due to the pandemic, demand for our supplies for programmed surgeries has diminished as most healthcare services are focusing on COVID-19 or avoiding exposing patients if their surgery is not urgent. The overall volume of orders for the year is down, which is a cause for concern as we are committed to keeping all our employees.

Q: What are your priorities for B. Braun in the near-term?

A: We see this period also as an opportunity to take advantage of time, especially with staff who work from home, and advance on projects that were lagging, such as improving sales methodologies and providing comprehensive training on products and medical indications to all the employees.

We also want to maintain and improve our relationship with customers in the digital world, as face-to-face visits cannot occur at this time. We have implemented webinars and online training courses and are creating a long-term strategy in digitizing customer service, as this situation could extend until a vaccine is available.

We are a very innovative company also in technological terms that has learned from past events, such as the influenza pandemic in 2009 and the earthquake in 2018.

B. Braun Mexico is a subsidiary of the international B. Braun Group, one of the leading providers of healthcare products and services in the world with 180 years of experience. Its products include devices for general surgery and cardiothoracic surgery.