Looking backward while waiting for the volcano to blow again
Will pandemic hindsight grant healthcare supply chain foresight?

The ongoing global pandemic involving COVID-19 and its delta variant(s) have taught us much about our lifestyles, our supply chains and ourselves, motivating executives, leaders and professionals in the healthcare supply chain to shed sacred cows and rethink historical and traditional operations going forward.

Many media outlets have chronicled the pandemic’s seemingly chaotic effects on supply and demand for products and services to the point that even healthcare horizon scanners strive to prepare for the next great crisis that threatens to overshadow this one.

Leaders & Luminaries posed a couple of key questions to the Bellwether Community about lessons learned from the pandemic. Specifically, what status quo-oriented operational beliefs, practices and/or rules should Supply Chain be bending – if not breaking – based on what has been learned during the pandemic-afflicted 2020 – and now even throughout 2021?

Brent Johnson, Bellwether Class of 2014
“Healthcare supply chain organizations must be more aggressive in managing their supply chains with increased authority from their organizations. Supply chain must be elevated to the C-suite if it isn’t already. The pandemic gave good justification for this. 

“Future investment into supply chain resources [is needed] including people and technology to assist in improved management of needed strategies.

“Supply chain risk must be managed more closely with attention to where PPE (personal protective equipment) and other critical products are manufactured and by whom. Work more closely with suppliers to manage risk and business continuity. 

“Having knowledge, through improved technology, of inventories across organizations regardless of ownership to help manage critical shortage issues [is also important].” 

Carl Meyer, Bellwether Class of 2019, Vice President, The Wetrich Group
“Eliminate the waste of using value analysis to vet low-spend commodity products that have already been vetted by the provider’s GPO. Pick one of the contracted suppliers and move on, as there are far more important tasks that the time that would have been wasted can be applied to [cover].

“Review Just-In-Time’s appropriateness for items that are in high demand for which there is limited or no inventories at suppliers and distributors.”

Rand Ballard, Chief Customer Officer, Vizient Inc., Founding Sustaining Sponsor
“Just-in-Time (JIT) programs and stockless. And it is clear that having sequestered emergency supplies of PPE in your name and title is critical.”

Fred Crans, Bellwether Class of 2020, Business Development Executive - Healthcare, St. Onge Co.
“Healthcare must become more collaborative. We are not 6,000 stand-alone adversaries involved in win-lose competition. The ‘fight for your stuff, screw everyone else’ methodology that took place when the pandemic struck helped no one. Local, regional and national collaboration need to be a common practice. Best practices need to be shared openly and often.

“Years ago, when I was a supply chain leader at a hospital in Northeast Ohio, I told someone, ‘We will never go out of business over the price of Band-Aids.’ Yet throughout the years, as collaboration became more possible – not just among [healthcare organizations], but with suppliers as well – the adversarial system remained in place. The pandemic should teach us that collaboration, not competition, should be the saving methodology for the industry.”

Steve Kiewiet, FAHRMM, FACHE, COO, CCS Health, and former Chief Commercial Officer, Intalere, Platinum Sustaining Sponsor (2019-2020)
“One belief that I would end is the idea that ‘value analysis’ or product evaluation can only be completed by the clinical team that is delivering care in a specific location. The idea that a nurse, doctor, therapist, etc. in Cleveland, Ohio, cannot possibly provide an effective evaluation of a product or a comparative of one product to another when the product is being used in San Diego is arrogant. It is time for a true national item master – or the medical product equivalent of an NDC in the pharmacy world – where product characteristics, properties, components, etc., are readily available and updated.

“The concept that supply acquisition costs can only be optimized through supply reduction, SKU reduction and market share commitments should be seriously challenged. It is beyond time for the industry to get to point-of-use demand capture with full data transparency up to the raw material provider. Use one – buy one. There are so many more value levers we would be working on together to improve the cost of care.

“The supply chain leader for every healthcare system should be in the C-suite and reporting to the CEO. A fully functional strategic supply chain organization has the ability to significantly impact an organization financially, operationally and strategically. Planning, forecasting, data science, resource management, risk management, customer experience, patient and clinician safety are all core competencies in a healthy supply chain organization.”

Jack Koczela, Future Famers Class of 2020, Director of Services, Supply Chain, Froedtert Health, Bronze Sustaining Sponsor
“We should be challenging our long-held beliefs around sourcing single products for a single purpose. We need to have multiple sources of products for many more ‘commodity’-type items to prevent stockouts and add flexibility to our supply chain. We should be much more willing to experiment with new ideas and act on them quickly.”

Siobhan O’Bara, Senior Vice President, Industry Engagement & Services, GS1 US Healthcare, Silver Sustaining Sponsor
“Many healthcare suppliers traditionally follow a hub-and-spoke supply chain model, with centralized production and distribution. It’s very efficient for manufacturers, but it comes with a degree of risk. During the pandemic we saw disruptions exacerbated by centralized operations, and product availability complicated by the practice of single sourcing. A movement away from this model will help improve the industry’s ability to more efficiently deliver necessary products when and where they are needed.

“To build greater flexibility into your supply chain, you must first double down on master data management and ensure that the product information is complete and accurate. This will help suppliers and healthcare providers pivot quickly when the need arises for product substitutions and other inventory management actions. Second, I think supply chain diversity needs to be considered in place of supply chain streamlining. The hub-and-spoke model is the epitome of a streamlined supply chain, with centralized production, single sourcing, reduced raw materials inventory, efficient QA management and release. But when your single-source model fails – the ramifications are immediate. Moving to a tiered model of multiple sources and sites (which many world class organizations already have) will mitigate those risks.

“We also learned the importance of having deep knowledge and insight into the attribution of medical products. Early in the pandemic, understanding exactly where every component of a medical product came from was essential as suppliers attempted to exclude materials sourced from at-risk and affected regions. When the supply chain is fully aligned on the use of GS1 Standards, this information is available to supply chain partners in a shareable, interoperable format.”

Bob Yokl, Bellwether Class of 2019, Founder and President, SVAH Solutions
“I think sadly what was experienced for supply chain professionals during the initial phases of the pandemic was that there were no rules, equity, fairness and loyalty. Supply chain professionals had to make their own rules, find new partners and alliances to meet their day-to-day supply chain requirement. Moving forward, many supply operational beliefs will be changed out of necessity as we close in on a cure for this plague.”

Leaders & Luminaries then asked, “What did the pandemic-afflicted 2020 teach healthcare industry professionals about themselves – what they do, need to do and should have done?”

JOHNSON: “Managing our staffs from many locations and virtually is a challenge to our norm and we cannot do it effectively. Many over-reacted to buying PPE supplies without knowing the source and/or pricing, i.e., the burning platform effect. Our staff were ‘all-stars’ in most cases, and we didn’t realize it until we saw them in action.” 

MEYER: “Our industry is a tight family. My wife commented a few months ago that I was still functioning and that it had not been a big impact (other than not traveling). I explained to her that our industry (unlike many) is a big family, where we all learn together in educational sessions, as well as from each other in both formal and informal settings. For locations that we travel too frequently, we even know the staff. Like Nick the bartender (R.I.P.) in the Irish Pub at the Marriott Wardman Park who served me for 25 years. [In 2020] I felt like I had gone through a divorce, as while I still had limited interaction and just saw initials on most Zoom calls, (kind of like seeing kids every other week if divorced) the day-to-day learning and personal interactions, the warm handshake, heartfelt hugs and high-fives were gone, and so too was part of who we are and part of what our industry is.

“Suppliers need to refine their Value Proposition into a quickly discernible message that can be delivered concisely to identify the issues facing the provider and how the supplier can help to resolve the issues. Conversely, the providers need to find ways to be able to quickly vet these opportunities and respond back to the suppliers. With limited time and resources, both sides need to improve our processes for the benefit of patients and staff.”

BALLARD: “Vizient established a war room to address critical PPE supplies. I’m extremely proud of all the leaders who stepped up and managed the war room and took care of numerous member requests for PPE supplies.

“I am also very proud the PPE suppliers and the pharmaceutical suppliers whose drugs were in short supply who sequestered PPE and drugs for our members, and in their name, in this COVID environment. We definitely should have done this before COVID hit. 

“Finally, investing in domestic PPE and U.S. suppliers and allowing those suppliers to have long-term purchase order commitments is something we should do and set aside in case the borders close.”

CRANS: “What we should have learned is that the approach I call the ‘Process of Heroic Intervention’ – the art of pulling the proverbial rabbit out of the hat we employ every day to get things done without blowing the system up – does not work that well when a disaster that affects the entire country strikes. We probably learned that we worked heroically, spilled blood, sweat and tears and – mostly – made it through the process alive in May and June, only to have an even bigger calamity strike in September.

“We learned that we want to believe, and that our optimism sometimes slows our focus and commitment to taking action quickly. We should have learned that we should have had a plan in place. We should have been more knowledgeable about where our healthcare organizations’ revenue comes from. We should have known which items are ALWAYS going to be essential in a pandemic, and we should have had detailed plans in place, not only for supply acquisition, but for alternative patient care sites. We should have learned that, while no smoke has been coming out of the volcano since the H1N1 pandemic of 2009, the volcano is still there and one day it will blow again. And we should have learned that in pandemics, science should always trump politics.

“Sadly, we did not learn what we could have learned in 2009. Perhaps we will learn this time. However, if the past is any predictor of the future, we will probably slip back to where we were in January of 2020.

“Let’s hope I’m wrong.”

KIEWIET: “We should have applied lessons learned from Hurricane Maria. We should have tested and replenished the national stockpile regularly. We learned that we can effectively manage and lead in a work from home environment. We learned that selling is still personal, and you can still sell in a pandemic. We learned that the concept of work-life balance is flawed in this century. Work isn’t necessarily a 9-to-5, Monday-to-Friday concept. Work and life happen at all hours and all days and are interspersed with each other.

“We learned that business travel will be changed – maybe forever. The concept of flying several people into to meet with someone for a couple of hours isn’t necessarily money well spent. I do see conferences (once it is safe) becoming more valuable than meetings at one location with one customer.

“We should re-evaluate the role and design of a corporate office. I believe people still will need and want a place to go, a place to have meetings, etc. Maybe there are no more dedicated offices and instead several private and open offices that are available for daily or hourly use. Much more investments into building high-technology meeting rooms with better video conferencing equipment and collaboration technology.

We should become more involved in our communities and do everything we can to help those who are and have been disproportionately impacted by the pandemic. We should enjoy a great bucket list vacation when everything is safe again. We should demand every healthcare supplier comply with GS1 data standards as a condition of doing business. We should do more business (when possible) with local and minority-owned businesses. We should embrace change and work every day to master our profession and be relevant in the future.”

KOCZELA: “We learned that acting extremely quickly on limited information is far preferable to waiting until we have all of the information we would like to have. We learned that our organizations, industry, and our nation need us desperately and value the work we do every day! We learned that collaborative work with our existing suppliers, and new partners, created many new creative opportunities. We should have partnered more closely with federal, state and local government agencies to understand their impact on the healthcare supply chain.”

O’BARA: “I think the pandemic taught us, on a personal level, the value of kindness, patience and generosity. We learned that we are more resilient – personally and professionally – than we realized. Based on technical and business process investments, industries have been able to become more nimble and more responsive than expected. And the critical importance of supply chain has come to the forefront.

“The world has been watching pharmaceutical companies and government entities collaborating to save lives, developing vaccines in record time. We are reminded every day how important it is for the healthcare industry to earn and protect public trust, for which accurate and transparent information is crucial. And since this COVID-19 vaccination rollout is perhaps the most challenging and complex supply chain operation ever attempted worldwide, leveraging current best practices (e.g., embracing global standards) and ensuring that all stakeholders are working together will be critical.”

YOKL: “The lesson learned during the pandemic is that no hospital, system or IDN is an island. To survive you need to you need to collaborate, cooperate and join with like organizations to overcome any adversity that you face. And don’t look for local, state or the federal government for solutions. Too often, they are the problem.”