2020 Hindsight: What Healthcare Supply Chains Can Learn from COVID-19

While preparing for pandemics at all times isn’t realistic, financially viable or truly possible, there are ways the healthcare supply chain can both enhance current practices and better prepare for future crises.

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As the world begins to stabilize from the repercussions of the Coronavirus disease (COVID-19) pandemic, virtually every industry is navigating how to better prepare for unexpected situations in the future. From critical personal protective equipment (PPE) shortages to a bumpy vaccine rollout, the pandemic has reignited healthcare supply chain issues that have historically been ignored.

The immense urgency and global scope of the supply chain issues that consumed 2020 were a stark contrast to the efficient, just-in-time inventories that the healthcare industry had previously relied on. Suddenly, everyone needed as much product as possible as fast as possible. When extraordinary circumstances accelerate at a pace that the system is not prepared for, errors inevitably occur, leading to wasted product and breakdowns in areas including PPE, vaccinations and patient care, among other problems.

In an industry that lives are on the line every day, the pandemic has magnified the critical importance of expecting the unexpected and adapting to tough situations. While preparing for pandemics at all times isn’t realistic, financially viable or truly possible, there are ways the healthcare supply chain can both enhance current practices and better prepare for future crises. Now is the time to understand what is needed to keep people safe today and plan for how to keep them secure going forward.

Invest in people over technology

The COVID-19 pandemic reminded us of the undeniable power of human ingenuity. During uncertain times, people prevail when technology fails. It was nurses and doctors helping patients in the hospital, and drivers and pilots delivering critical products to health systems that got us through the crisis. Society often wants to believe that the smartest technical solution will be the best outcome, but when you write an algorithm to provide a predictable flow of goods, and then a pandemic breaks out, the algorithm will always fall short. At the end of the day, it’s the people involved and that provide intelligent solutions.

Hire the best and invest in people, empowering them to accomplish what no one else can. Leverage technology to find and create solutions, and rely on the drive and passion of people to source information, track down answers and get creative when it really matters. A human-powered business is the only way to deliver unconventional, timely and reliable results when technology alone can’t.

To navigate pandemic-like problems and pivot on a dime, supply chain and logistics management companies need forward-thinking people who can problem solve and implement creative ideas on the fly using the resources and technology available to generate solutions on a moment’s notice.

Efficiency isn’t always the most efficient

The pandemic has shed light on the vulnerability of the healthcare supply chain industry’s just-in-time model. This model emphasizes the efficiency of having only what you need, right when you need it, and at the lowest price possible. When cost efficiency alone drives decisions, lower levels of inventory and minimal backup stock are the result. The medical supplier market has become highly concentrated as a result of the ever-increasing focus on cost savings and large volume discounts given by select suppliers. During the pandemic, those few suppliers, mostly based in Asia, couldn't meet the spike in demand for PPE and other healthcare goods, so customers were left without critically needed supplies. To create supply chains with more available sources, more people making the product and more companies in business, customers may have to consider paying slightly higher prices, having more inventory on hand, and working with suppliers closer to home.

Beyond pandemic-related challenges, the just-in-time model leaves health systems vulnerable to a spectrum of time-sensitive emergencies.

Build a logistics team of problem solvers

The public never thinks about logistics and supply chain management until things go wrong. When people need masks or gloves, they don’t immediately consider the people behind the scenes who work to secure the product, handle customs, coordinate movement and expedite timing.