HIDA Supply Chain Visibility attendees in 2022

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

  1. Building trust with trading partners is a cornerstone of sharing information and communicating effectively.
  2. Collaboration among supply chain stakeholders will help the nation navigate out of pandemic-induced challenges such as transportation delays and worker shortages.
  3. Talent within the healthcare supply chain must be encouraged and cultivated.
  4. Data sharing creates an integrated supply chain, builds stronger partnerships, and enables scalability.
  5. Visibility begins with a product’s raw materials and country of origin and ends with the patient.
  6. Visibility depends on trading partners’ adoption of standards for reporting and formatting.
  7. 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

Andy Hamilton

Andy Hamilton
Executive Director of Supply Chain
Multicare Health System

Holly Farrell

Holly Farrell
Senior Leader, Global Procurement
McKesson Medical-Surgical

Dana Frank

Dana Frank
Director, National Accounts
Concordance Healthcare Solutions

How Has The Pandemic Shaped Your Definition Of Supply Chain Visibility?

Andy Hamilton

Andy Hamilton, Multicare Health System: The COVID-19 pandemic required supply chains to think differently to insulate supply disruptions through a wide range of events that create delays and ultimately can impact patient care. There is a need to partner with our suppliers to truly understand the risks that lie with the supply chain (from sourcing raw materials to delivery of finished goods) and how we develop strategies together to mitigate those risks. This visibility and transparency need encompasses the entire span of the supply chain and will take time for this to develop within our industry.

Holly Farrell

Holly Farrell, McKesson Medical-Surgical: What was working in the past doesn’t work now. We need to be more reliant on sharing information and collaboration. Ongoing communication across all parties is even more important now that logistics, raw material shortages, and cost increases can quickly result in overall supply chain delays around the world. Clear communication across all channels allows for proactive decision making to reduce disruptions.

Dana Frank

Dana Frank, Concordance Healthcare Solutions: Before the pandemic, supply chain visibiIity focused on upstream and downstream inventories. With the pandemic, visibility was shining a light on all facets of our supply chain. In the manufacturing world, it was who can flex? Who can be creative? Who can think in a non-traditional way? Who can go the extra mile for providing patients their needed medical products? On the distributor side, it is much of the same in terms of how creative can distributors possibly be to find solid solutions and product options for our customers and their patients.

What Top Action Should Healthcare Supply Chain Stakeholders Take To Advance Visibility And Why?

Andy Hamilton

Andy Hamilton, Multicare Health System: Tier 1 mapping our medical supply chain will provide the visibility required for all stakeholders to understand which areas are at the highest risk. Understanding where these risks lie will allow healthcare providers to work with their supplier partners to ensure there are solid business continuity plans. This work needs to go beyond tier 1 mapping. This will help to ensure broader visibility, as there are a variety of disruptions that can impact the supply chain directly or indirectly.

Holly Farrell

Holly Farrell, McKesson Medical-Surgical: Understanding not only where and how a final product is produced; instead drilling down to the components and raw materials necessary for complete production. In the past two years, supply chain issues have been less about being able to produce a product and more about the availability of the raw materials to start production. It’s also about diversification of suppliers and country of origin. Now is the time to qualify new sources with due diligence to ensure we are providing legitimate, quality products rather than during a crisis, when unqualified sources start to enter the marketplace.

Dana Frank

Dana Frank, Concordance Healthcare Solutions: I think that all stakeholders need to use accurate data to judge every part of the supply chain and see who came through in this time of need and who was truly resourceful. Those are the companies that we need to more fully join forces with, as we move forward to understand and build long, trusting collaborative partnerships. These types of alliances will advance the process of visibility.

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.

  1. Enterprise data and analytics application to collect and curate large data sets.
  2. 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.
  3. 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
Peter Bennett

Peter Bennett
VP U.S. Demand and Supply Planning
Cardinal Health

“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.
David Dobrzykowski

Dr. David Dobrzykowski
University of Arkansas

Peter Bolstorff

Peter Bolstorff
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.

  1. Demand planning
  2. Data management and integrity
  3. Supplier flexibility

“Which digital capabilities drive outcomes to your competitive advantage? Connected customers, synchronized planning and intelligent supply.”

Charlotte Perkins

Charlotte Perkins
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

Ryan Haley, Medline and Chad Mitchell, Vizient
Chad Mitchell, Vizient and Ryan Haley, Medline

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.

Their Recommendations:
  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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™ magazine.
Making Strides Toward Visibility