Healthcare Suppliers and Providers Outline Six Steps to Strengthen Supply Chain Resiliency

While COVID-19 continues to strain healthcare systems and resources, supply chain professionals are already taking steps to improve the transparency, efficiency and agility of the healthcare supply chain based on the lessons gleaned to date.

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The COVID-19 pandemic exposed the shortcomings of our nation’s Just-in-Time healthcare supply chain. An ongoing survey of leading U.S. supplier and provider organizations conducted by Global Healthcare Exchange, LLC (GHX), found that while COVID-19 continues to strain healthcare systems and resources, supply chain professionals are already taking steps to improve the transparency, efficiency and agility of the healthcare supply chain based on the lessons gleaned to date. 

As the number of COVID-19 cases surged, the unpredictability surrounding demand for, and subsequent availability of, critical supplies was unprecedented. Provider organizations were vying for a finite supply of personal protective equipment (PPE) and ventilators, while distributors and manufacturers tried to decipher actual demand as hospitals and health systems placed large, duplicate orders with multiple suppliers in hopes of accruing enough supplies. Adding to the complexity, many U.S. healthcare organizations struggled with processing rapidly changing information, policies and protocols. In addition, hospitals and health systems were challenged to vet non-traditional suppliers, evaluate the quality and cost of alternate products and set up emergency facilities – all while caring for patients. 

Survey respondents outlined six key lessons drawn to date and outlined the steps required to create a moreresilient system for sourcing supplies.

1. Develop more rigorous crisis preparedness plans. 

While many hospitals have plans for local surges or events, few had plans in place to address a global pandemic. Respondents expressed a need for more collaborative, industry-wide pre-planning to anticipate needs and identify resources during a crisis. This level of planning also helps establish a ready line of communication within the organization, as well as external contributors, including public health agencies and local government officials.  

2. Make the necessary investments in data to enable predictive analytics. 

As the pandemic intensified, access to timely, accurate product data was limited. Organizations were left to rely on historical supply chain data to anticipate demand. Respondents say the industry must invest in establishing trustworthy sources of product data that will provide visibility and transparency in real-time, as well as feed reliable predictive models to enable greater flexibility. This, in turn, will help support bi-directional visibility across the entire supply chain. Providers, suppliers and distributors should be able to share data on raw materials, current inventory, utilization rates and predicted surges in demand.  

3. Improve collaboration at the local and national levels. 

COVID-19 saw unprecedented levels of collaboration across hospital departments, especially among clinical, supply chain and infection control teams. Specifically, clinical-supply chain collaboration was critical in revising protocols, reviewing inventory levels and demand and identifying clinically and functionally acceptable product substitutes. Fostering continued cross-functional collaboration around protocols, guidelines and contingency plans will create more agile, resilient teams.

4. Create PPE stockpiles. 

The majority of respondents encourage hospitals and health systems to build a healthy inventory of PPE. This could include new approaches, such as stockpiling in collaboration with other regional provider organizations to ensure adequate levels of supply in the event of a crisis, or working with distributors to keep ample supplies on hand.  

5. Increase the focus on domestic manufacturing. 

The majority of respondents believe increased domestic manufacturing of medical supplies is essential to build resiliency in the healthcare supply chain, citing it would help to alleviate PPE shortages, bidding wars and other challenges in the future.

6. Maintain a roster of trusted, non-traditional suppliers.

The vetting of non-traditional suppliers and testing of alternate products was a time-consuming process during COVID-19. While sentiment around the value of non-traditional suppliers was mixed, roughly half of respondents say maintaining relationships with proven non-traditional suppliers will strengthen contingency plans and recommend developing long-term relationships with these vendors, using trusted data to build standardized substitution lists.