Building Resiliency

A new nonprofit healthcare supply chain association aims to champion standards and best practices.

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November 2022 – The Journal of Healthcare Contracting

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From Jesse Schafer’s vantage point as a senior manager of business continuity at the Mayo Clinic, supply chain resiliency is keenly needed in healthcare. “It’s a complex issue too difficult to solve individually,” he said. “There are cultural, operational, and economic barriers.”

When asked what’s missing in the supply chain regarding resiliency and transparency, Schafer said standards, incentives, and culture.

1. “There are too many solutions in the market. As such, trading partners cannot scale nor sustain the approach.”
2. “Historically, price drives purchasing decisions. In a post pandemic world, providers are more often seeking to evaluate supplier resiliency as a key factor in sourcing decisions.” 
3. “There is a lack of trust when sharing resiliency data between trading partners, and a corresponding lack of clarity in how the data will be used.” 

To help break down those gaps, a group of healthcare supply chain provider and supplier stakeholders recently formed the Healthcare Industry Resilience Collaborative (HIRC), a nonprofit healthcare supply chain association that champions standards and best practices in supply chain resiliency.

The vision of HIRC is to create a more transparent and resilient supply chain through collaboration between providers, suppliers, and industry partners, said Schafer, executive director for HIRC. “We work as a community to develop and align to sensible standards and a one-to-many approach.”

Members convene in a variety of monthly engagements, including: member calls to share best practices, key initiatives to develop industry solutions, best practice groups to share lessons learned, and online forums to enrich the community know-how. Monthly market watch articles and collaborative research are additional resources provided. “Membership provides access to a community of thought leaders focused on clear goals and deliverables in resiliency,” Schafer said.

Focus areas

Resiliency is a common challenge across healthcare stakeholders, Schafer said. “It’s present at all stages of the supply life cycle. As such, the interface between providers and suppliers is critical to tackling opportunities and barriers. When problems and solutions are addressed collaboratively, the resulting solutions are far more effective. To solve for resiliency, it must be addressed as a common goal.”

HIRC’s focus areas include standardizing resiliency key performance indicators; creating a framework to measure attributes through scorecarding; and increasing supply chain visibility for greater continuity of critical supplies. The organization also focuses on risk assessment and increased transparency through data sharing.

“Each standard offers a one-to-many approach that’s easy for trading partners to engage and enables discussions to progress to greater insights and actionability,” said Schafer. “Additional focus areas include resiliency KPI and resiliency technology.”

In 2023, key initiatives may include:

• Supplier resiliency certification – an evidenced-based certification that demonstrates supplier business continuity management proficiency
• Resiliency database – an AI and community curated platform to track critical healthcare items, supply disruptions, and suitable alternative products
• Supply disruption market watch – an AI and community curated platform to identify the most relevant and actionable supply disruption intel across the industry.

Better outcomes for all

Tom Harvieux, chief supply chain officer at BJC HealthCare, and board member and chair-elect of HIRC, said healthcare supply chains have historically been built around low cost, which proved to be a significant weakness during the recent pandemic and subsequent global supply chain shortages. “Improving resiliency and end to end visibility is critical to not letting the past repeat itself,” he said.

Resiliency in healthcare is about delivering the right products and services at the right time and place, as well as delivering better outcomes for patients, said Joe Robinson, vice president, enterprise risk & continuity at Medtronic, and board member of HIRC. Since the COVID era began, supply chains around the world have experienced a wide variety of challenges, shocks, and disruptions. “Now, more than ever, we need a community partnership focused on reducing these impacts to the medical supply chain,” Robinson said. “Medical providers and suppliers must work together to improve patient outcomes and drive improvements within the supply chain. That is exactly what HIRC is doing.”

HIRC was formed by Mayo Clinic and Spectrum Health before the COVID pandemic but gained broad industry support coming out of the challenges of the past three years. Jim Francis, chief supply chain officer at Mayo Clinic, helped drive the launch of HIRC. “Mayo Clinic Supply Chain Management Division is pleased to support the efforts of HIRC and looks forward to participating in its mission of increasing the resiliency of the supply chain,” Francis said.

 Lessons learned through the pandemic and on-going supply disruptions present the most opportune time to address transformational needs of the supply chain, he said. “This industry collaborative presents the best opportunity to address needed changes as an industry rather than on an individual provider and/or industry partner basis,” Francis said.

“HIRC is uniquely positioned to create a common place for suppliers, providers, GPOs, industry forums, and academics to work in transparent and open dialog,” Harvieux said. “This is how we collectively will change and improve healthcare resiliency.”

Robinson said HIRC is a true collaborative partnership that aligns suppliers and providers with the common goal of improving patient outcomes. “We focus on standardizing our approach to resilience, creating consistent and repeatable resilience expectations between suppliers and providers,” he said. “Our members create scale for the healthcare community and this scale leads to a future of more consistent supply expectations, once again leading to better outcomes for patients.”

Harvieux said you can expect to see HIRC continue to grow membership and to continue to develop well thought out, cross industry standards that are widely adopted as a common framework for resiliency discussions and formal improvement work between trading partners. “While lots has been done, HIRC is really starting to hit its stride!”