Organisations sourcing personal protective equipment (PPE) face a minefield as unscrupulous actors take advantage of unprecedented demand.
Here we list four things you need to be aware of when procuring PPE:
1. Benchmark prices
“You should always benchmark the prices. They vary a lot so what you paid yesterday might be irrelevant a few days later. Double and triple check that the supplier has understood your requirements,” said Samantha Rousselle, procurement & contract manager at the Royal British Legion.
2. Check quality certificates
The British Standards Institution (BSI) has been notified of a number of manufacturers selling PPE with false certificates.
“Never take quality certificates for granted for suppliers that do not have an independent performance certification (issued by your own country authorities, or one that is recognised equivalent),” said Dr Thierry Fausten, doctoral researcher of SRM at Cranfield School of Management and procurement/business consultant at Informed Decisions GmbH.
“Call the supplier (there is a certain element of gut feel in this climate), do a credit check and do not hesitate to ask about their supply chain,” said Rouselle.
“If they don’t mention certifications, if they don’t know about the product, if they don’t seem to have a close collaborative relationship with their suppliers and tier two suppliers, that’s probably because it’s not the case, which means that this opens your company to risks: reputational, financial and delays.”
3. If it looks too good to be true…
An increase in capacity has meant the market has somewhat shifted from a sellers’ market to a buyers’ market, so bad behaviours are less frequent, but they’re still there.
“Tale-tell signs are like always: too good to be true (quality/price/availability), high upfront payments, unavailability of documents, inconsistency of administrative elements (e.g. company asking for payment to be made on another continent, or in a known low-regulation country; many intermediaries),” said Fausten.
4. So what sorts of frauds are out there?
The most common frauds are linked to quality, quantity, and delivery times. There are cases of shipments changing end-customers on the fly as the vendor was literally auctioning products already sold.
There are also cases of suppliers trying to sell non-existent or substandard products that inevitably fall through at the eleventh hour, leaving companies with no stock and often out of pocket.
In March, the FBI warned healthcare professionals of an increase in fraudulent sales of Covid-19 related medical equipment, heightening concern around risks when sourcing PPE. The announcement stated warning signs of fraudulent sales include unusual payment terms, last-minute price changes and last-minute delays in shipment.