The Supply Chain Matters blog provides an updated capsule of noteworthy updates to prior global supply chain news developments that we have previously highlighted for our readers. In this update, we update developments related to the distribution of the Johnson and Johnson COVID-19 vaccine, and in Airbus efforts to renew monthly manufacturing volumes.
FDA Clears Some Johnson and Johnson Vaccine Lots But Orders the Destruction of Others
In a prior Supply Chain Matters blog published in early April, we noted that a manufacturing blunder that occurred at a contract manufacturing facility caused a lot of 15 million doses of Johnson & Johnson’s COVID-19 vaccine to ruin. A Baltimore based third-party production facility operated by Emergent BioSolutions, had contracts to produce both the Johnson & Johnson and AstraZeneca developed vaccines. In what was cited by government regulators as human error, a batch of the J&J vaccine was accidently conflated as one of more workers reportedly confused the ingredient mix among the two vaccines causing a lot of 15 million doses to ruin.
At the time of the incident reports had indicated that the snafu would not hinder the plan to deliver 75 million doses by the end of May and a cumulative 100 million doses of the J&J vaccine to the U.S. by the end of June. However, the U.S. Food and Drug Administration (FDA) held all lots of doses pending a complete quality analysis of the Emergent BioSolutions facility.
This week, the FDA announced the release of 10 million doses of the vaccine that were produced by Emergent, but at the same time, according to reporting from the New York Times (Paid subscription or metered view), ordered that 60 million doses will not be usable and should be destroyed because of possible contamination. Citing people familiar with the situation, the Times noted that regulators cannot guarantee that Emergent BioSolutions facility followed proper manufacturing practices. Further reported was that the agency has not determined whether Emergent can reopen the production facility, which closed two months ago. Noted in the report was that the U.S. Federal Government has agreed to pay Emergent roughly $200 million thus far to manufacture coronavirus vaccines, but until this week, regulators had not cleared a single dose produced by Emergent for use in the U.S.
The 21 million J&J vaccine doses that have now been distributed in the United States thus far were manufactured at J&J plants in the Netherlands. In a statement provided to the Times, J&J cast Friday’s decision as “progress in our continued efforts to make a difference in this pandemic on a global scale.”
As noted in our prior News Capsule update, subsequent reporting from the Washington Post indicated that J&J quality teams knew of production deficiencies at the Emergent Baltimore facility as early as June 2020, seven months earlier, as a result of site audits. That revelation came from testimony given at a U.S. House of Representatives Select Oversight Committee on the Coronavirus Crisis. Johnson & Johnson declined comment to the Post on its 2020 audit and steps taken after its findings.
Airbus Preparing for Earlier Than Expected Commercial Aircraft Rebound
In a Supply Chain Matters blog published in mid-January, we reflected on commercial aircraft industry participants Airbus and Boeing and their 2020 operational performance. Specifically related to Airbus, we reported that the European based designer and manufacturer was able to deliver a total of 566 commercial aircraft during 2020. While overall aircraft deliveries were 34 percent below levels of 2019, it was indeed a remarkable performance given the circumstance and challenges of the COVID-19 pandemic and its subsequent multiple lockdowns of populations and facilities. Commenting on the company’s 2020 performance Airbus CEO Guillaume Faury indicated that customers and suppliers pulled together in the face of adversity to deliver such overall results and further expressed cautious optimism regarding the eventual rebound of aircraft demand levels.
In late May, the aerospace manufacturer-initiated communications to suppliers and customers a plan that indicated a more optimistic perspective that industry air travel and subsequent aircraft demand will return sooner than originally forecasted.
Outlined to suppliers was a plan to ramp monthly production of the popular A320 family of single aisle aircraft to 64 aircraft per month by the second quarter of 2023, compared to an adjusted level of 40 aircraft per month initiated during the pandemic disruption. Communicated was a goal to attain a level of 70 single aisle aircraft monthly by 2024, and possibly 75 per month by 2025.
With this announced revised supply chain plan CEO Faury indicated:
“The aviation sector is beginning to recover from the COVID-19 crisis. The message to our supplier community provides visibility to the entire industrial ecosystem to secure the necessary capabilities and be ready when market conditions call for it.”
That however is much different scenario than rival Boeing which continues to struggle with production quality problems related to two aircraft models and with ongoing challenges related to the Boeing 737 Max aircraft’s delivery schedule over the next two years. Industry watchers continue to point out the market popularity of the newest A321 extended range aircraft and that Boeing has been hobbled with the cash and development resources to both make delivery commitments of existing models or be able to respond with a new model development program.
The other message is an acknowledgement that global aircraft supply networks incurred meaning financial and talent cutbacks as a result of the sudden industry cutbacks and that it will take more time for industry suppliers to be able to bounce back. Hence, Airbus’s communication of a multi-year ramp plan is perceived as a new “stress test” to ensure that suppliers can deliver to planned higher monthly volume rates or that measures to revamp facilities and workforces are in readiness when they need to be over the coming three years.
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