When the pandemic began in March 2020, the first logistics system to reveal its cracks was healthcare supply chain. Essential personal protective equipment, such as gloves, masks, and gowns were in short supply as sick patients began flooding hospital wards. Now that the dust is settling, healthcare executives are having a look back at lessons learned and a look ahead at how to make their supply chains more robust for the future.
A recent survey of healthcare executives conducted by McKinsey found that, for the most part, the pandemic served to improve the status of the healthcare supply chain in overall operations. Where most executives considered it transactional prior to the pandemic, they now recognize its strategic value. Three-quarters of the respondents expect that the supply chain will take on an increasingly strategic role as time goes on.
To ensure that healthcare supply chains stay out of the fray of future disruptions, it’s essential that the industry elevate the role of supply chain leaders, appointing chief supply chain officers in hospitals and other organizations. These C-level leaders will need a seat at the table to ensure that medical supplies and medications make it end-to-end, from manufacturers to patients.
A chief issue that all healthcare supply chain leaders face in this current moment is medicine shortages. Partly to blame for the shortages is the fact that the industry hasn’t had universal product codes, or a universal language, to communicate in an effective and efficient manner. Some organizations within the healthcare industry are working on developing a universal language to complement barcodes, however. Johnson & Johnson, for instance, has added unique device identifiers (UDIs) to over 70,000 medical devices. These tags work alongside barcodes and will help the company streamline supply chain processes. It will also facilitate rapid product recalls should they be necessary.
A Proactive Healthcare Supply Chain
Another struggle the healthcare industry has had is operating in a reactive versus proactive mode. A recent report suggested that a high-performing healthcare supply chain could save up to 10 percent if it flipped that equation, which would result in reduced spending. A Gartner report points to the top supply chain performers in the healthcare supply industry and gave high marks to the Cleveland Clinic for implementing a resiliency program. Another high-ranking organization developed an algorithm to track back-ordered items, along with the ability to warn about upcoming shortages.
Another target area for supply chain improvement in healthcare is better engagement between executives and clinicians during contracting cycles. High-performing supply chains have demonstrated that when clinicians play an integral role, they lead to improvements in several key areas. They can share insights on suppliers, the flow of supplies, and quality. The best outcomes result from formal collaboration between the executives and clinicians, rather than informal. Roles within a healthcare organization that deserve additional space at the table include the chief medical officer, chief nursing officer, and chief clinical officer.
When the supply chain operates at its best, healthcare organizations don’t have to operate from a reactive stance. When carried out properly, a strategic approach will go a long way to preventing future disruptions. Contact OPSdesign today for all your supply chain consulting needs.
