Three Tips Toward Smarter Healthcare Supply Chain Management

Digital disruption is arguably one of the most overused terms in business today, but there really is no other equivalent to describe how technology is drastically changing the world. In healthcare, delivering the best care at the best value has become the multi-billion dollar question healthcare providers are looking to technology to help answer.

Supply chain management is another area within healthcare that’s being radically transformed by technology, with increasing opportunities to improve optimization and the flow of goods among manufacturers, purchasers, and providers.

Yet there’s still a lot of work to be done. The healthcare supply chain has typically been fragmented, and this lack of cohesiveness makes it difficult to adapt to fluctuations in supply and demand from different suppliers, group purchasing organizations, and distributors. Add to this the increase in healthcare industry mergers and acquisitions, new types of suppliers and competitors, policy reforms, and even the rise in healthcare consumerism, and the complexity of the supply chain only continues to grow.

One thing’s for sure: as a supply chain leader, you’ll need to advance your skills and knowledge, as well as your organization’s technology, to adapt to healthcare’s changing landscape. Here are some steps you can take.

A new supply chain process calls for a new type of supply chain leader. Research from the Association for Healthcare Resource & Materials Management (AHRMM) and Strategic Marketplace Initiative (SMI) sheds some light on this, revealing that the supply chain leader of the future must be highly skilled in communication, negotiation, and analytics, while also having experience in people management, project management, and technology—not to mention healthcare and supply chain.

One reason for this expanded scope is supply chain management has become increasingly collaborative, requiring more than the traditional responsibilities of solely managing logistics and purchases. As a supply chain leader, you must be able to work with other functions and technical systems to understand the total costs of the supply chain, including the cost of ownership of supplies, procedures, and care. This holistic view encompasses the intersection of cost, quality, and outcomes—what the AHRMM refers to as the CQO movement.

The skills needed to support the CQO movement across the supply chain are changing, and as you work to improve your own skills, you must also be able to find and retain the right talent in your organization to support more efficient processes. One way you can do this is by comparing employee performance and goal attainment with supply chain data to more readily identify the skills and strengths essential for operational excellence and, critically, plan for succession.

Gartner’s research in its June 2018 “Healthcare Provider Supply Chain Outlook, 2018” report reveals there was about a 35 percent turnover among supply chain leaders at 40 health systems over the past 18 to 24 months. To mitigate this, the firm recommends that leaders should “identify people in the organization who can evolve into the leadership role. Empower your direct reports in sourcing, logistics, clinical alignment, and analytics to lead initiatives to orchestrate beyond their functional area to build future leaders.”

Both a surplus or deficit of supplies is often the result of the outdated, inflexible supply chain systems that require healthcare providers to do at least some manual inventory tracking and replenishment. Another big problem area is waste, with ProPublica finding that hospitals routinely toss out brand-new supplies or gently used equipment. Access to real-time data can help identify and stop waste before it happens.

The Global Healthcare Exchange’s “Supply Chain Leaders Survey” found that the top priorities among supply chain leaders were data and analytics for better decision-making and the standardization of data and business processes across the organization. The right technology can improve the purchasing, tracking, and replenishment of supplies, capturing real-time data to make decisions that increase efficiency and value.

In many healthcare organizations, clinical utilization and supply chain information reside in different systems. To break down those silos, adopt a single system that enables you to align your approach with the organization’s overall strategy, process, and metrics. Using a unified system, you can gain insight into costs and usage patterns throughout the entire healthcare system, which in turn reduces shortages and surpluses.

Christiana Care is among the organizations that are adopting a unified system. Rob McMurray, chief financial officer at Christiana Care, explains, “Our Workday supply chain deployment project is really exciting for the organization—it gives us the ability to identify areas of spend control and improvements within an integrated system. So if I can marry finance, supply chain, and HR data in one system, I have a really good outcome.”

Digital disruption is more than a buzzword, and it’s likely that it’s already impacting your healthcare supply chain. To ensure you come out on the positive side of digital disruption, take steps now to transform your supply chain with the right skills and technology, gain real-time insights into your supply chain, and eliminate the system silos that prevent those insights that help move your organization in the right direction.

Watch the webinar replay Healthcare Supply Chain Management of the Future to learn how supply chain leaders at Piedmont Healthcare System and Saint Luke’s Health System are using technology to boost efficiency while lowering costs.