Enduring challenges require new approaches.
April 2023 – The Journal of Healthcare Contracting
By Linda Rouse O’Neill, Vice President, Supply Chain Policy & Executive Branch Relations
When it comes to supply chains, there is no “new normal.” That was the biggest takeaway of HIDA’s recent Supply Chain Visibility Conference in Cape Coral, Florida. Despite the end of the COVID-19 public health emergency and an easing of supply chain delays at U.S. ports, every link in the supply chain remains potentially fragile. The threat of transportation challenges and disruptions are here to stay, and require new approaches in our industry.
New Acceptance of Uncertainty. Transportation experts warned that disruptions to global shipping will persist. Furthermore, the medical supply chain may never return to pre-pandemic standards such as just-in-time delivery. Stakeholders must adapt to a new “not-normal.” The pandemic was a rollercoaster in terms of demand, with exceptionally high levels for two years, followed by a sudden collapse in the fourth quarter of 2022. Shipping rates are likely to decrease while cancellations are likely to increase.
New Applications of Technology. Conference presentations highlighted ways that tech solutions are increasing supplychain visibility, from tracking shipments as they cross the ocean to sharing inventory levels at various locations. At the conference, one of the presenters shared their experience with a data-driven software company to create a crisis-averting, patient care–elevating healthcare supply chain ecosystem. As a result, they are better equipped to anticipate product shortages
and make informed decisions on substitutions.
New Approach to Demand Planning. Demand planning must include market analysis and awareness of external factors, such as shortages of raw materials. Historical data about patterns or production and consumption are no longer accurate predictors of usage for medical supplies. Data sharing across the entire supply chain ecosystem can lead to more accurate forecasting. Forward-thinking health systems are embarking on major initiatives to increase resilience by better understanding product criticality and risk. Additionally, they are identifying clinically acceptable substitutes for key items. Some provider supply chain leaders are collaborating with their suppliers to ensure these initiatives result in fewer back
orders and stockouts.
New Partnerships with Stakeholders. Collaboration between the federal government and industry is stronger than ever. Conference participants included leaders from the White House Office of Science and Technology Policy, Strategic National Stockpile, HHS Administration for Strategic Preparedness and Response, and Food and Drug Administration. This level of collaboration underscores the ongoing commitment to maintain the strong lines of communication that were forged between the public and private sectors during the pandemic.
Most importantly, the key issue facing the medical supply chain is one of diligence. All stakeholders – suppliers, providers, distributors and government partners – must approach the issue of supply chain fragility with a renewed sense of urgency. Implementing key lessons from COVID-19 is critical to mitigating and preventing the next supply disruption. The industry should not be knocked off course again.