5 best practices to improve supply chain resilience

Lessons learned: New realities of non-acute supply chain

The role of supply chain leaders has been extending beyond the hospital and into non-acute care facilities (e.g., clinics, physician offices, long-term care) for some time. However, the COVID-19 pandemic forced a sudden and significant leap in responsibility.

Non-acute facilities found themselves on the frontlines of the pandemic. They faced surges in patient volume and significant demand for personal protective equipment (PPE) and supplies for testing, treatment and vaccination. The support of supply chain management has been critical to the success of these non-acute facilities.

What has supply chain learned from this experience and what best practices will they carry forward?

We recently hosted two virtual forums with U.S. healthcare leaders to learn how they've managed the new realities of the non-acute supply chain. The forums featured three panelists: Sean Poellnitz, vice president of supply chain at Mosaic Life Care in St. Joseph, Mo.; Darrick Adams, director of non-acute supply chain at AdventHealth in Altamonte Springs, Fla.; and Tyler Ross, director of supply chain operations at Novant Health in Charlotte, N.C.

They collectively explored what's worked for their organizations, and what changes can strengthen the resiliency of non-acute supply chains in the future.

Here are five key learnings from the sessions.

1 | Care is shifting & skills must shift with it

The pandemic placed a significant burden on non-acute facilities. It also created an opportunity to accelerate the expansion of care beyond the hospital, which has long been a goal for the healthcare industry.

As supply chain leaders have increasingly supported non-acute facilities, they've realized the need for new strategies, talent and skills to assist this expansion of care. A growing number of organizations are appointing dedicated non-acute supply chain leaders. Among forum participants, 60% reported their organizations had a position dedicated to the non-acute supply chain, with 10% confirming that this was a direct result of their experience during the COVID-19 pandemic.

Poellnitz described the need for supply chain talent that can support shifting care models:

"Do I have the business case to invest in the right talent to support new and emerging healthcare models? The seeds are planted and they're growing. We need to ask the right questions to support long-term growth. What are the partnerships and technologies that will fuel that growth?"

Forum participants pointed to specific skills that non-acute supply chain leaders need: strategic sourcing abilities, lab/diagnostic testing support and capabilities to support new care models, such as hospital at home.

Several participants described their shift to support these new care models. Hospital at home programs, assisted living and independent spaces and services are growing to meet the needs of the community. The mix of products and services these models need are much different from the traditional hospital or skilled nursing facility (SNF). Supply chain teams find themselves contracting with home mobile imaging providers, converting SNF bed licenses for assisted and independent living use, and more to set these care models up for success.

Poellnitz, who worked in transportation and defense supply chain before entering healthcare, says the profession needs people with real world experience regardless of the industry.

"The question is no longer, 'do you have healthcare experience?,' but rather 'can you source products?' If you can source, we need you. It doesn't matter what industry you come from. It's more about finding talent who can get things done."

2 | Trusted relationships serve as a safety net

In the past, the healthcare supply chain was characterized by competition and distrust. Suppliers were seen as trying to get the most money out of providers, while providers were seen as trying to squeeze every last penny out of prices. Healthcare organizations competed for patients and were reluctant to share information.

When the pandemic hit everyone had to put aside their differences for the greater good. As panelist Tyler Ross stated: "It wasn't provider versus supplier but rather everyone coming together to help America win."

Forum participants agreed that the industry must maintain and strengthen these relationships and not fall into old ways of thinking and operating. A new openness in communication can lead to greater supply chain transparency, which will benefit the entire industry.

Panelist Darrick Adams described how this spirit of cooperation helped his organization open its first physician offices for patients aged 65+. They collaborated with their distribution partner to establish a standard list of items they need to open those sites. Now, any time a new site opens, he can bring up that "shopping list", adjust quantities based on the individual site and have the products shipped to the facility.

"Our organization has been active with thinking ahead to what the care landscape will look like," said Adams. "We already have better processes in place through our work with our distribution partner that will help carry us forward."

3 | Preparedness takes visibility and data

As many noticed over the past year, the shift from just in case to just in time inventory management backfired in the face of pandemic supply shortages.

"Overnight it wasn't about us being this lean supply chain anymore because lean is risky," said Poellnitz.

Adams explained how one of his system's 14 medical groups bought huge amounts of a product when COVID-19 hit, leaving the other groups with a drained allocation.

Participants stressed the need for real-time supply chain visibility, including dashboards to help them make informed decisions. Those teams that already had a visible supply chain were more successful in getting the supplies they needed.

Poellnitz's team was frustrated when trying to perform predictive analytics, finding there was "no hard science to it." When he was asked, "do we have supplies?," he realized the real question should be "can we create the right business models to forecast risk?" He is currently working with his finance team to develop dashboards to address this need.

Ross said his team is developing robust planning and redundancies to address shortages as they arise:

"I hope coming out of this we move from traditional just in time methodology for inventory management and product availability. Just in time is important but again we're not retail, so we need some sort of safety valve to absorb disruption."

To prepare supply chains to weather future challenges, the participants agreed that leaders must have a seat at the table to help develop and implement preparedness plans.

4 | Safely expanding the scope of suppliers

When traditional supply sources dried up early in the pandemic, providers began searching for alternatives. There are countless stories of supply chain leaders desperately ordering N95 respirators from unknown companies never to get the products or receiving products that were unusable.

Those in the forum described the challenges they faced and how they turned to distributor partners and other healthcare organizations for guidance on sourcing.

Because manufacturing in China had come to a halt, many providers turned to suppliers onshore or nearshore to the U.S. as more reliable channels. Participants shared stories of local distilleries that produced hand sanitizer, and textile companies shifting production to face masks and gowns. As one participant stated: "The label 'Made in the U.S.A.' has never been so sought after."

Forum participants felt the trend toward a broader domestic supplier portfolio will continue and result in greater supply chain resilience. They called for continued collaboration among providers, suppliers and distributors to share sourcing guidance with one another.

5 | Clinical collaboration is essential

There has been growing talk in healthcare about the need for a clinically integrated supply chain where clinicians and supply chain professionals work closely to make informed product decisions.

The pandemic has encouraged clinical and supply chain integration as these functions work together to address supply shortages, inventory management and substitutions. Supply chain leaders have found themselves engaging with clinicians in offices, clinics and other non-acute sites where they previously had never set foot, offering their expertise, knowledge and connections. Forum participants believe this is a positive move and one that should expand.

In addition, clinical collaboration on product usage may be vital to preventing future shortages. Having supply chain and clinicians work together on guidelines for PPE usage, for example, could help reduce demand by changing clinical behavior.

Conclusion

The COVID-19 pandemic forced many changes in healthcare and accelerated some trends that were already in progress. Relying on non-acute settings for diagnosis and treatment of virus patients highlighted the critical role of these facilities in the care continuum. The importance of non-acute will endure as health systems continue to invest in care sites outside of the hospital.

"Non-acute has been stressed with a lot of change but it is a major growth area for health systems," said Greg Colizzi, vice president of health systems marketing, McKesson, who led the forum. "The pandemic has provided the opportunity for supply chain leaders to identify proven practices throughout the continuum that will help carry us forward."

We're focused on helping supply chain leaders navigate the new realities of the non-acute supply chain. The company's mission is to support a "care-anywhere" approach as the delivery of care continues to evolve - one patient, one product and one partner at a time.

Supply shortages during the pandemic left healthcare supply chain teams scrambling. Some found themselves at the mercy of fraudulent suppliers that failed to deliver or sent unusable items. Avoid risks by asking these questions when vetting a new supplier:

• Does the company have proper FDA registration (product code, certifications, etc.)?
• Can a quality assurance audit of the factory be conducted?
• What are the options in the event of poor product quality or a recall?
• What is the company's level of product liability insurance and indemnification?
• Is there a clear and clean chain of custody (factory direct or broker chain)?
• Will products be inspected before shipment? If so, by whom?
• Are samples - not pictures - available for immediate review?
• Who will the financial transaction be with? Is this a different entity than the stated factory?
• Are there pre-payment requirements?
• What recourse is available if there are product issues or if product is never shipped?
• Who will manage logistics, customs clearance and statewide transportation?   

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