Healthcare Supply Chain Leaders Must Build Resiliency

Eric O'Daffer

The global pandemic continues to place an enormous strain on healthcare systems around the world. Nearly all providers were caught off guard by the resulting demand for PPE products, many of which have been typically considered commodities, sourced at the lowest price available globally that met desired standards.
When the coronavirus outbreak first occurred, the challenges of protecting staff and testing patients caused many healthcare providers to hold all non-essential procedures, impacting the availability and economics of providing care. Eight months into the pandemic, many healthcare providers are still struggling to source essential protective equipment like gloves which were not as large an issue initially. While not all manufactured products were impacted, the pandemic should serve as a wake-up call for the need for supply chain resiliency.
When considering a course of action for building greater resiliency there are four aspects that healthcare supply chain leaders need to focus on.

According to Gartner data, 70% of healthcare providers indicate they have full responsibility for demand forecasting (Gartner Org Design Survey 2020). Yet the maturity of this capability is still woefully low. To gain visibility into demand through point of use inventory management tools requires a systemwide investment on behalf of the providers along with the ability for distributors and manufacturers to use that data to support improved service. To achieve maximum benefit, demand forecasting needs to be interconnected and interdependent to the healthcare supply chain.
As healthcare providers know all too well having experienced shortages of critical supplies such as PPE and ventilators, global supply chains are fragile networks. To establish greater supply chain resiliency, healthcare providers need a diverse strategy incorporating multi-sourcing, nearshoring and manufacturing elements that can all work together in segmented mission-critical product categories. This will involve trade-offs with the contractual, low cost globally sourced models that incent line item savings at the expense of supply chain agility.