How to Build Resilience in the Healthcare Supply Chain

The Covid-19 pandemic broke the already-stressed global healthcare supply chain. For months, hospitals were overwhelmed, and shortages of drugs and personal protective equipment. These shortages exacerbated the severity of the emergency.

As of February 2022, drug shortages continued to plague healthcare systems in the United States. The Food and Drug Administration (FDA) lists 121 prescription drugs as "currently in shortage" on its database.

The U.S. Government published National Strategy for a Resilient Public Health Supply Chain to combat this. The document defines a resilient supply chain as robust, agile, and visible. As healthcare leaders, it's up to you to make this vision a reality.

How do you do that? Read on for four foundations of supply chain resilience.

Accurate, Useful Data

The first foundational element is accurate, useful data. Data is the evidence that drives understanding the hospital supply chain effectively.

Accurate data stems from patients' electronic health records and inventory notes at the treatment level. More broadly, data maps global forces that drive supply and demand, thus, supply chains.

Prediction

The Covid-19 pandemic disrupted previous, easily predictable patterns of supply and demand.

First, Covid-19 caused acute spikes in demand for treatments and PPE. Then, acute, contagious illness among staff in manufacturing plants caused abrupt shutdowns—that restricted supply.

Most healthcare organizations, public officials, and suppliers were unequipped to integrate new, rapidly-changing data into their approaches.

Healthcare groups must utilize AI and machine learning to analyze and use continual data streams. Machine learning is an approach to data analytics that requires the AI to improve how it learns continually. ML systems layer new pattern recognition skills onto those they've already developed to reach accurate conclusions faster.

With effective data analytics, healthcare organizations can begin predictive modeling. Predictive modeling forecasts future behavior on multiple scales. The better you analyze supply chain data, the better your predictive model is.

In practice, it can predict surges in demand by product and geographic region. It can also foresee potential shortages, often in a way that pinpoints shortage origin and probable shortage duration. This lets healthcare groups optimize expenditures.

You can evade the impact of reduced production by pivoting to a supplier not predicted to face production shortfalls. But, supply chain analytics are only as good as your data.

Accuracy

To keep data accurate, it's critical to reduce the opportunity for human error. You also want to make sure the data is visible to everyone who needs it. Technology can resolve many barriers to accuracy and visibility.

These technological solutions typically fall into a few categories:

  • Clinical decision support
  • Automated data capture tools (RFID scanners, etc.)
  • Data governance
  • Data quality measurement
  • Clinical notes analysis

Each category encompasses an array of approaches to data quality improvement.

For example, automated data-adaptive analytics is one way to optimize clinical decisions. These analytics tools analyze EHRs to pinpoint the direct impact of specific variables in the treatment. This, in turn, prompts treatment choices better suited to each patient.

Streamlined, Automated Inventory Management

Measuring supply chain performance means determining how often healthcare workers have the supplies they need when they need them.

Automated inventory management is straightforward yet critical. Inventory management requires hospitals to maintain a useful stock balance, so the items are on hand when you need them. At the same time, spending too much on unused and expired items drains your budget and takes up space.

Lead Time

To maintain stock without losing it, managers must get an accurate sense of lead time. Lead time is the amount of time between when a purchase order is placed and when the warehouse receives the order. Factoring in typical lead time accurately for each supplier enables managers to place orders at the right time.

This requires data to work from. With the correct data, an organization can implement demand forecasting. The predictive model can then shape inventory management decisions.

Visibility

One way to ensure inventory data is accurate and visible is the 2-Bin Kanban System. This system uses asset tags to capture data about inventory automatically. These systems make it easy to know where supplies are and obvious when stockpiles are running low.

Optimal Healthcare Supply Chain Sourcing Strategy

The optimal healthcare supply chain sourcing strategy must build in redundancies. This is the only sustainable way to manage the supplier risk: production shortfalls. Sourcing strategically lets organizations diversify their bases.

Multiple sources of a given supply let you adapt. It's particularly worthwhile to have at least a few local suppliers, to reduce transportation time and costs during emergencies.

Building relationships with suppliers directly also facilitates trust. With trust comes the free, two-way flow of accurate information. Moreover, sourcing directly, without middlemen, improves category management.

Building relationships with multiple suppliers costs time and money. So, many healthcare organizations may choose to collaborate to share the costs—and the benefits—of multi-supplier contracts. This type of horizontal integration is key to many resilience-building projects.

Horizontal Collaboration

Hospitals and healthcare organizations should not be at odds with one another. Instead, a resilient supply chain is built on mutual collaboration. Collaboration has three components:

  • Data and information sharing
  • Cost-benefit sharing
  • Structural (organizational) support

Investment in multi-organizational support structures facilitates both information and resource sharing. The commissioned report Organizing the U.S. Healthcare Delivery System for High Performance offers insights into the optimal support structure.

The report focuses on multi-specialty group practices (MSGPs), as these groups have highly-rated collaborative support structures. Other healthcare organizations can learn from—and adapt—the MSGPs' methods.

Information Access, Continuity

MSGPs maintain information continuity across organizations. EHRs are accessible to all clinicians at all sites, with web-based backlinks to verify accurate information transfer. Patient portals have enhanced decision support tools, and a well-established multi-site rapid paging system streamlines emergency communications.

Workflow, Culture Enables Improvement

At the same time, MSGPs' workflows integrate regular teamwork peer review. These peer review periods enable medical professionals to approach improvement systemically. Then, they disseminate materials recommending best practices for procedures.

Past improvements include redesigned ambulatory care, which reduced patient wait time. Another MSGP improved patient access to translation and interpretation, which in turn improved the spread of accurate information.

Specific committees take on the task of applying the latest research to their practices. This is in the context of an intentional culture dedicated to learning, prevention, and accountability.

Build Resilient Supply Chains Today

Organizations don't have to wait to build a better healthcare supply chain. Healthcare leaders can take steps today.

You can start with optimized, data-driven inventory management. BlueBin's software solutions automate workflows to move supplies fast. And our experts routinely create custom solutions for hospitals across the United States.

Talk to us, and let our consultants help your team create a more resilient future.

 

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