January 23, 2024- During respiratory season, unsteady demand and the erratic nature of seasonal viruses and illnesses makes demand planning and inventory management of critical products such as diagnostic tests a major challenge. With high demand and limited supply of these products, many providers need the same products at the same time, and issues like supply constraints, backorders and product allocations can run rampant. Secondary issues like lot number tracking and product dating can also be a risk, as organizations that bring in extra inventory during respiratory season face the possibility of having to throw away expired product.
According to Paul Farnin, Director of Customer Solutions Team at Cardinal Health, unpredictable seasonal planning takes collaboration between providers, labs, supply chain, and distributors using historical data to identify potential patient volumes and formulary needs for the season.
“In this age of data, a major component to respiratory season is both access to data and ability to convert that data into information. Hospitals are investing money into technology and automation, and on the other side of the equation, customers are getting more savvy in understanding data usage,” said Farnin.
“There is an art that goes with the science when it comes to anticipating needs.”
Some hospitals and health systems have made the decision to self-distribute in the pursuit of greater control and resiliency. Self-distribution, which encompasses anything from buying select products directly from manufacturers to the use of consolidated service centers (CSC) and even sophisticated distribution facilities, is an established trend that gained heightened visibility during the pandemic, as many organizations assumed distribution responsibilities and the related costs to ensure critical supply of products like personal protective equipment (PPE).
Read more in the latest issue of The Journal of Healthcare Contracting.