Five Strategies To Mitigate Supply Chain Risk From Future Pandemics

By Karen Conway, vice president of healthcare value, GHX.

Karen Conway

The disruption wrought by COVID-19 is unmatched in recent history. While the lasting implications have yet to be fully understood, the limitations of the global healthcare supply chain have been exposed. While it is impossible to predict when another crisis will hit, there are steps healthcare organizations can take now to mitigate future risk.

1. Collaborate with Key Stakeholders on Continuity Plans

Excellent crisis management begins with pre-planning. Bring together key internal stakeholders, such as clinical, financial, risk management and operational leaders, as well as external contributors, including public health agencies, local government officials, distributors and manufacturers. Pre-planning builds relationships and trust as participants anticipate needs, identify necessary resources and develop contingency plans.

2. Create Evidence-Based Protocols for Supply Utilization with Clinicians

There is a growing body of evidence surrounding the safe and sustainable use of personal protective equipment (PPE) and other critical resources, including scenarios in which alternative products or protocols may be required when demand exceeds the capacity of traditional sources. This evidence can support advance work with clinicians to determine how and when to source comparable alternative products or implement conservation measures. Pre-planning will help reduce clinician stress when changes are required during times of crisis.

3. Recognize Risks Associated with Current Supply Chain Practices

COVID-19 has called into question reliance on Just-In-Time (JIT) inventory practices, which are pervasive across most supply chains as hospitals seek to reduce costs. JIT delivers products on an as needed basis in contrast to keeping large quantities on hand. This can increase risk when there are upstream supply disruptions or unanticipated spikes in demand. COVID-19 has led supply chain leaders to rethink the risks associated with JIT and consider how improved inventory visibility and demand planning across the supply chain can enhance the ability to respond quickly to avoid potential shortages.

4. Understand and Prioritize Vendors That Minimize Supply Risk

To avoid severe supply disruptions during crisis situations, actively engage with vendors to understand what steps they have taken to minimize their own upstream risks and if they are willing to provide advance warning of potential shortages. Consider these factors, in addition to both clinical evidence and price, when evaluating vendors for comparable products in the same category.

5. Consider Supply Chain Dependencies When Returning to Elective Surgeries and Procedures

With finances constrained by the demands of COVID-19, many hospitals are eager to resume higher revenue-producing procedures. Any return to “normal” must include determining the resources needed for both COVID and non-COVID care. Hospitals should consult with vendors about their ability to meet expanding demand, as well as consider the ability to ramp up testing for both patients and staff and the potential use of outpatient and non-acute facilities to isolate non-COVID patients.

Final Thoughts

While nearly impossible for the healthcare industry to anticipate all the specific needs in the event of a pandemic or other crisis, the strategies above strengthen underlying capabilities to minimize risk and improve flexibility to respond effectively. Existing, strong relationships supported by data to detect and respond to problems are fundamental to effective emergency preparedness that will protect the health of patients and caregivers, as well as the financial viability of the organizations upon which our health system depends.

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