Ramping up Ventilator Production in Response to COVID-19 Crisis: An Inside Look from Patricio Keegan ‘18 at Tecme

Ramping up Ventilator Production in Response to COVID-19 Crisis: An Inside Look from Patricio Keegan ‘18 at Tecme

“Tecme has been manufacturing ventilators for over 50 years and no one outside of our industry ever asked about ventilators. Now we’re at the center of media and government conversations.” How did that happen? In one word. COVID-19.

COVID-19 is a respiratory illness caused by the new coronavirus that emerged in China. As the COVID-19 pandemic continues to progress around the world, the need for ventilators to help those in hospital intensive care units (ICUs) who are most severely affected by the illness, has increased to levels never before seen. 

Tecme begins as a family business in Argentina

University of San Diego School of Business alumnus, Patricio Keegan ‘18 (MBA), is the global director of marketing at Tecme, a manufacturer of mechanical ventilators used in ICUs, the kind that is currently in high demand. Tecme was founded in 1966 in Argentina by Keegan’s grandfather, a thoracic surgeon. 

His grandfather was inspired to build a ventilator after seeing his brother, an engineer and diving aficionado, attempt to build an oxygen device for his dives. Together, they created their own ventilator in their parents’ garage at a time when only one ventilator existed in the two second-largest provinces in Argentina. That ventilator was the launchpad that catapulted Tecme to where it is today -- a key player in the battle against the new coronavirus.

News of COVID-19 reaches Tecme

Keegan first heard about the virus in late January while at a trade show in Dubai and assumed that this would increase demand for ventilators, as did the swine flu outbreak in 2009. To better anticipate demand for ventilators as this crisis approached, he reached out to distributors around the world where new cases of COVID-19 were reported to ask if they needed to place any urgent orders in the next 30 days. 

“No answer. Then all of a sudden, when President Trump closed the U.S. border to flights from Europe, boom!” says Keegan. “In Argentina, the orders we received for ventilators in two days exceeded the total orders we typically receive from the entire world in 12 months.”

Tecme, along with ventilator manufacturers around the world, has been tasked with one thing in the midst of this pandemic -- produce more ventilators. That’s easier said than done though. Keegan reveals the multifaceted obstacles that ventilator manufacturers are currently facing and how his company is overcoming them.

Ventilators are complex, regulated devices

“Our ventilators have over 2,500 parts and thousands of lines of code,” says Keegan. “It’s a very complex device as it’s a life support device. If you have one missing component, you can’t build a ventilator.” Some of these components are especially complicated and can have long lead times. If one of these critical components isn’t in stock, it can take several days or weeks to get more. Suppliers are also looking for workarounds to expedite the distribution of parts, but this also takes time.

As a life support device, ventilator manufacturing is a highly regulated industry. “In order to produce a ventilator, there’s a lot of testing and clinical trials you have to do in order to get various approvals such as FDA approval,” explains Keegan. This amount of regulation in addition to the complexity of the device makes it difficult to produce ventilators as quickly as this crisis requires. 

Even with other industries trying to help distribute more ventilators, these obstacles remain. Some auto manufacturers are refocusing their efforts on ventilators and are producing a simpler version that can bypass some of the testing and regulations, but its capability is also more limited. Furthermore, if they’re using the same components needed to build mechanical ventilators for ICUs, it could put an even greater strain on the supply chain for ventilator components.

Governments are stepping in

As it became clear just how vital ventilators would be during this pandemic, governments also began to regulate ventilator manufacturers. “We saw this happen across Europe. It happened in Italy and in Germany. So we saw that coming in Argentina as well, where our headquarters are,” says Keegan. “We decided to put a hold on all international contracts and just focus on domestic orders. Ten days later, the Argentinean government put a hold on all exports of ventilators until national demand has been met.”

These types of restrictions complicate the ability of ventilator manufacturers to meet the global demand of ventilators, especially when there are not many manufacturers of this type of ventilator around the world. 

On top of that, governments are increasingly shutting down their borders, which affects the logistics of importing parts and exporting ventilators. “For example,” begins Keegan, “the electronic boards we use in our ventilators come from the United States. Normal shipping time for that part including time in customs is about five days. Now we’re talking about 19 days because airports have limited their flights and hours of operations due to border restrictions imposed by the government.” 

Such restrictions are in fact needed to limit the spread of the new coronavirus. Even though governments are the ones enforcing these necessary, yet limiting, measures, they are also working together to find alternative solutions. It’s just that solutions -- and ventilators -- take time and people want results yesterday.   

The global supply chain for ventilators is strained

These issues amalgamate into one greater problem. “All ventilator manufacturers share the same issues,” says Keegan. “It’s not so much about innovation, infrastructure or the labor force. This is a global supply chain issue.” With few manufacturers all trying to ramp up production while all relying on the same essential components to build said ventilators, it creates a clog in the supply chain. 

“We are facing an unprecedented situation. You have the pressure of governments, society, news, everybody,” shares Keegan. “Every day you hear about people dying because they need ventilators. As a manufacturer, we’d like to ramp up production even faster than we have, but doing so takes time. We’re working on trying to get some of the necessary components from other sources. And that’s where Tecme stands right now. And most other manufacturers are in the same place.”

Meeting national and global demand for ventilators

Tecme sells its ventilators to over 55 countries including the United States. Prior to the pandemic, it exported 80 percent of his products. Now, as Argentina is also in quarantine to try and flatten the curve, Tecme is working to fulfill all of its orders at home so it can begin exporting internationally again -- especially to the U.S. which currently has the most COVID-19 cases in the world. With their current rates of production, Tecme is informing U.S. customers that lead times for new ventilator orders is 90 days. 

“We’ve doubled our production. And we want to do even more,” says Keegan. “We’ve hired people, trained people, expanded our assembly line. We’re just waiting for the components we need to come down the supply chain.”

“This is what’s making people anxious, especially governments,” Keegan continues. “They want ventilators now and we’re asking for time but there’s no time.” Perhaps flattening the curve is the one action that has the ability to give manufacturers the time they need.

Preparing for an international career at USD 

While Keegan doesn’t believe that anything could have prepared him for leading a company during a pandemic, he does feel that his MBA degree at the USD School of Business equipped him with the knowledge and experience to thrive in today’s global business world.

“In my role at Tecme on a normal day, I work with people of many different cultures from over 55 countries around the world,” shares Keegan. “The USD School of Business really gave me that exposure to international business and cultural awareness that I needed to develop professionally at a multinational company and eventually become the global marketing director, now navigating our company through a pandemic.”

begin quoteAll ventilator manufacturers share the same issues. It’s not so much about innovation, infrastructure or the labor force. This is a global supply chain issue.
Patricio Keegan '18, global director of marketing at Tecme, stands with one of Tecme's ventilators.Patricio Keegan '18, global director of marketing at Tecme, stands with one of Tecme's ventilators.

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