David Hargraves has a well-rounded view of the U.S healthcare supply chain. While working in a previous role at UPMC for nine years, Hargraves helped set up a distribution center that’s still in use today. By bringing products in bulk to the DC, the IDN hoped to create greater efficiencies logistically, lower costs with manufacturers and enhance a greater service level with the acute hospitals. But what Hargraves took away from that experience is that while self-distribution made sense for the large acute facilities, that wasn’t always the case with the non-acute sites.
“I’ll say this, with one notable exception, no one that I’m aware of does full self-distribution, meaning every item at every level to every facility,” he said. “It’s not economically viable. With the size of the warehouse you’d need to stock every single SKU … it’s just not possible. All IDNs are hybrid to some degree.”
In a podcast with The Journal of Healthcare Contracting, Hargraves discussed best practices for servicing acute and non-acute facilities.