Making Strides Toward Visibility
The COVID-19 pandemic amplified the critical need for excellent end-to-end supply chain visibility, industry leaders agreed during the Health Industry Distributors Association’s 4th annual Supply Chain Visibility Conference. More than 60 healthcare supply chain experts from 34 organizations — including health systems, GPOs, manufacturers, distributors, and government partners — gathered to discuss best practices and shared learnings from the public health emergency.
They addressed the need for greater resiliency throughout every facet of the healthcare supply chain, from sourcing raw materials to the delivery of supplies. The Supply Chain Visibility Conference resulted from the work of HIDA’s Healthcare Supply Chain Collaborative. The Collaborative’s mission is to transform the healthcare supply chain through best practices for processes and data. Collaborative participants meet annually to share new ideas about improving healthcare industry contract administration, e-commerce, and demand planning practices.
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7 Key Takeaways
- Building trust with trading partners is a cornerstone of sharing information and communicating effectively.
- Collaboration among supply chain stakeholders will help the nation navigate out of pandemic-induced challenges such as transportation delays and worker shortages.
- Talent within the healthcare supply chain must be encouraged and cultivated.
- Data sharing creates an integrated supply chain, builds stronger partnerships, and enables scalability.
- Visibility begins with a product’s raw materials and country of origin and ends with the patient.
- Visibility depends on trading partners’ adoption of standards for reporting and formatting.
- Allocation is a powerful tool that must be supported by clear communication between trading partners, upstream and downstream.
Industry Thought Leaders Share Their Insights On Pandemic Effects On Supply Chain Visibility Today And In The Future
How Has The Pandemic Shaped Your Definition Of Supply Chain Visibility?
What Top Action Should Healthcare Supply Chain Stakeholders Take To Advance Visibility And Why?
Making Strides Toward Visibility — One Bot At A Time
At HIDA’s Supply Chain Visibility Conference, Peter Bennett, VP U.S. Demand and Supply Planning, Cardinal Health, outlined a new tech-driven initiative that improves the customer experience.
Cardinal Health: Integrated Augmented Intelligence Architecture
Major AI Initiative To Improve Accuracy For Customer Deliveries
Cardinal Health creates data dashboards and control towers through three AI features, helping create a “source of truth” for product and order status.
- Enterprise data and analytics application to collect and curate large data sets.
- Leveraging AI to pull in data and information around-the-clock from external sources such as supplier websites. Cardinal Health asks vendors to access their sites with bots, and occasionally will have to work with a supplier to update their website so the technology can work.
- Digital data and data intelligence reviews that inform the Cardinal Health team if the information is accurate, cleansing the data to make it scalable. The data can spot delivery trends too and then react. For example, if a supplier is almost always off by three days.
Key Learnings From The AI Roll-Out
- Establish executive buy-in and sponsorship early — not just the IT Department buy-in
- Understand timing and situation awareness
- Seed innovation funds (minimally for first year)
- Storytelling is critical (explain art of possible and benefits)
- Establish pull from business units vs. push
- Invest in partnerships with product vendors to understand capabilities and limitations
- Create a full-stack team that offers speed and agility
- Establish Non-Functional Requirements (NFRs) and business continuity plans early
VP U.S. Demand and Supply Planning
“We’re leveraging data and analytics to build an integrated supply chain that gives end-to-end visibility, predicts supply disruptions, increases speed and response, and reduces manual touch.”
COVID-19 Puts A New Set Of Lenses On ‘Visibility’
Supply chain visibility morphed into something new during the pandemic, explained Dr. David Dobrzykowski, a supply chain expert with the University of Arkansas.
- COVID has not been limited by geography and duration such as a plant fire or a blizzard. That has created huge visibility challenges.
- The pandemic has amplified that data is the currency of today. It became imperative to share key product data throughout the supply chain since the onset of COVID-19 to ensure products were getting to key locations quickly. There are lots of contracts without legal review that have data sharing provisions in them. How can we use data to build stronger partnerships?
- The industry has struggled with creating a visibility strategy because healthcare supply chains are uniquely complex. He noted that HIDA’s Healthcare Supply Chain Collaborative addresses that by focusing on challenges such as resilience, pricing accuracy, and product information management.
Dr. David Dobrzykowski
University of Arkansas
Association for Supply Chain Management
Peter Bolstorff, EVP for Corporate Development, Association for Supply Chain Management, polled conference participants to find out their top critical focus areas. Here’s what they said.
- Demand planning
- Data management and integrity
- Supplier flexibility
“Which digital capabilities drive outcomes to your competitive advantage? Connected customers, synchronized planning and intelligent supply.”
Owens & Minor
VP of Supplier and Portfolio Management Charlotte Perkins is part of a team at Owens & Minor that regularly monitors issues related to raw materials and country of origin to proactively address any challenges that may arise related to healthcare supplies. The team tracks the movement of commodities and the impact of extreme weather events, among other things, to help boost supply chain visibility.
“It’s our job to make sure caregivers have what they need for patient care.”
Strategies For Adopting Best Practices In Allocation
A process integral to managing healthcare product supply — especially during a pandemic — took center stage at the Healthcare Supply Chain Collaborative’s 2022 Supply Chain Visibility Conference.
Medline’s Ryan Haley and Vizient’s Chad Mitchell discussed new allocation best practices that address information sharing, allocation calculations and processes, and specific challenges in allocation management. Their discussion expanded on workgroup recommendations published in the white paper “Allocations: Best Practices For Conserving Medical Supplies During Shortages”, available on HIDA.org.
- Proactive Communications
Encourage all supply chain stakeholders to share information and understand the effect when information about product supply levels travels from the manufacturer to the distributor to the customer. Haley and Mitchell discussed the workgroup recommendation that a manufacturer should announce an allocation to distributor partners first, allowing the distributor 48 hours to prepare before announcing the allocation to customers and GPOs.
- Align On Allocation Implementation Processes
Make sure a distributor’s allocation is aligned with manufacturer partners. Ask what are the SKUs, time period, percentage and how does a manufacturer partner plan on communicating the allocation. Distributors need to know if there is a “hotspot” location in dire need of a product to help facilitate getting product there.
- Measure Fill Rate From The Manufacturer To The Distributor To The Customer
Pre-pandemic there was not a laser focus on fill rate, but now all stakeholders are looking at it daily. Everyone needs to understand where supply is improving and to identify gaps.
- Collaborate To Address Escalations
The best scenario is to let data drive all decisions, which helps avoid emotions and unnecessary finger-pointing. When something is off track with the numbers, it’s important to get all parties aligned and talking.
- Prepare An “Exception-Based” Process Ahead Of Time
If a provider customer doesn’t have a historical demand for gloves and gowns but suddenly needs them, for example, make sure a distributor or manufacturer can activate a process that will get the caregiver the supplies they need, quickly.
Find more HIDA resources on healthcare supply chain visibility here.
This article features in the May/June 2022 edition of Healthcare Distribution & Supply Chain