Let’s Start 2021 by Thinking Differently About Healthcare Supply Chain
By Jeff Lawrence
I recently attended a virtual event (aka, the only way we get to see colleagues in 2020) attended by supply chain leaders from multi-location non-acute organizations. As they were discussing some of the challenges they shared in 2020, I noticed they were solving issues differently and taking some interesting routes as they prepared for ’21. Because it’s a good time to share the lessons of this year, I wanted to pass along some of the insights from this discussion.
First – the pain. 2020 was the year supply chain leaders spent unprecedented amounts of time:
- Trying to locate products they need, especially PPE
- Working through product price increases; verifying accurate, updated prices
- Identifying and purchasing from multiple – often untested – vendors, and casting a wider net for sourcing
- Understanding and dealing with allocations, as vendors set item quantities based on pre-COVID purchase volumes
- Working with distributors, who were trying to keep supplies flowing, but with radically different demand parameters
- Attempting to locate organizations with PPE surplus stock they were willing to sell
Supply chain leaders shifted quickly to get field-based solutions in place. The goal was to identify where supplies were located, and document how many eaches of much-needed items were on-hand throughout their enterprise, including remote facilities and storage areas. What were people doing most often? Their processes were pretty similar:
- A person in each remote location takes a clip board and manually counts relevant supplies
- The “counter” enters data (item numbers and on-hand counts for each item) into a smartsheet or Excel spreadsheet
- They upload or email the spreadsheet to corporate supply chain, where enterprise-wide tallies are created, building some degree of visibility to organizational supply levels
This approach applied a band-aid, but concerns were shared that today’s somewhat short-sighted solutions won’t provide the visibility or foresight needed heading into 2021. The supply chain leaders themselves admitted they weren’t experiencing a lot of pain from this process (after all, they aren’t the ones doing the weekly counting). Yet they recognized they were only meeting the most basic needs of supply and inventory management, and weren’t building strength for 2021.
Executives will want more insight from your organization’s data. Because of the urgency of 2020, many healthcare organizations executives haven’t yet asked the hard questions. Heading into ’21 they’ll want to know: What’s our spend by vendor? How many vendors are we using? What’s our spend by category? How are we ensuring we’re paying the right prices? How are we tracking consumption?
Today, it’s PPE but tomorrow it will be vaccines, which by the way, have expiration dates and lot numbers that must be tracked.
How can you start solving for 2021? If I had once piece of advice, it would be to focus on good systems and good data:
- Put technology and processes in place to capture, digest and understand enterprise-level supply intelligence
- Build automation, which will always give you more accuracy and visibility than manual processes
- Ensure you’ve assigned a product category for every item you buy
- Keep building price visibility. This year, most organizations had to simply accept pricing for PPE and other supplies. In ’21, we’ll want systems in place to identify price variations and increases. Build the data to understand which price increases are justifiable and which aren’t
- Networking is alive and well. Your network connections can help you with insights to their challenges, solutions, and maybe even some extra PPE
My 2021 motto is “good data builds good partnerships.” I look forward to seeing you – hopefully in person – in 2021!