Global integrated healthcare services and products distribution company Cardinal Health has released findings of a recent Hospital Supply Chain Survey and the results once again reinforce the need for far more supply chain management focused efficiencies among hospitals, along with broader stakeholder alignment across healthcare delivery supply chains.  _DSC0083

The survey, conducted in late October 2016 included responses from slightly over 400 doctors, nurses, service line leaders or supply chain administrators. What especially caught our Supply Chain Matters interest were the findings indicating that 57 percent of physicians did not have the right products needed during a planned procedure. The study highlighted that one in four hospital staff have observed or heard of an expired product being used on a patient and 18 percent have observed or heard of a patient being harmed due to a lack of necessary supplies at the right time. The responses further indicate that nearly 20 percent of front-line caregiver time is consumed by supply chain management expediting or follow-up which then amplifies further to service line and other administrators.

A fundamental tenet of our community is that the supply chain exists to serve the needs of the end-customer, and in the case of healthcare, patients and frontline caregivers. Ladies and gentlemen of the healthcare focused supply chain community- these findings point to continuing systemic issues in your supply chain processes and they well should be garnering added calls-to-action.

Then again, from our lens, it is yet another indicator of the current stakeholder misalignments across healthcare supply chains. While most care givers, those on the front lines for delivering quality patient care and managing healthcare delivery costs, believe that the seamless operation of the supply chain is critically important, the other supply chain participants seemed aligned to other conflicting interests.

For the first time, we included pharmaceutical and drug supply chains in our industry-specific predictions for 2017. The principal reasons were twofold and somewhat inter-related. The increasingly global reach of the industry’s various supply chains is adding continued possibilities for risk and disruption. According to the U.S. Department of Commerce, the United States is now the biggest importer of pharmaceuticals from other countries. Pharmaceutical and drug production is now global in scope. Incidents of counterfeit drugs and medicines have been a constant challenge and lately, conformance to generally accepted production practices have become troublesome. Second, within the U.S. especially, there remains an enormous groundswell of political and social backlash directed at what is perceived as artificially high and inflated pricing stemming from conflicting buyer self-interests across the industry’s extended supply chain. Pharmacy Benefit Managers (PBM’s) negotiate pharmaceutical and drug prices on behalf of heath insurance plans and de-facto now include a far higher share of control over the supply network. The latter challenge alone is beyond explanation in a single blog commentary.

Latest Survey Responses

Survey responses from this latest Cardinal sponsored survey indicate a fair to poor rating among 52 percent of respondents for having the right product when needed, 53 percent indicate a fair to poor rating for the ability to keep track of recalled products or tracking product expirations, and 56 percent a fair to poor rating for the ability to manage inventory volumes. The full details of this hospital supply chain survey report can be downloaded at this Cardinal Health web link.

Let us be blunt and to the point. Processes for supporting timely supply of right product with the ability to manage updated and timely product information have proven business process solutions that have been acquired both in healthcare process pilots and from many other industries. Likewise, the technology needed to support accurate and timely product data is available today in either new product labeling, active item-level chip or other Internet of Things (IoT) enabling technology.  The missing element seems to always come back to the alignment of stakeholders across the extended supply chain and to leveraging process and technology investments consistently across the healthcare supply chain. Buying influence is a big determinant as well, especially when state and federal government are factored as buyer influences.

Frontline care givers should not be having to constantly manage supply and inventory tasks and similarly, hospital supply chain administrators should be allocating time to occasional supply and demand alignment exceptions. As the survey responses and the Cardinal report findings reinforce, such time is better freed-up for patient time.  Once more, today’s integrated supply chain planning and customer fulfillment systems are up to the task for planning healthcare supply needs.

We agree completely with the conclusion that improvements are long overdue and they are centered on the current conflicting stake holding interests. However, supply chain inventory management is basic and has proven solutions.

Again, by our lens, hospital teams should be viewing these challenges as both local supply chain management education and in external supply chain network-wide process alignment perspectives. Seek out supply chain management business process and technology experts for education. Work with your major supply distributors and PBM’s on the most efficient and cost affordable means to align with existing automated supply response management processes that link both manufacturers, distributors, and your local facilities in extended supply chain inventory supply visibility.  As we have noted in a prior Supply Chain Matters commentary, Cardinal Health supports its own supply chain innovation laboratory. Likewise, other distributors and manufacturers are willing to collaborate on overall supply chain visibility and addressing more automated local supply chain processes and decision-making needs.

This blog and this Editor is willing to do our part in broadening industry education and in visibility to new, more cost affordable technology or business practices. However, we as healthcare consumers, along with frontline healthcare providers need to be far more vocal in influencing the broader industry that local supply chain management supply and decision-making needs need to be far more intelligent and far more simplified for hospitals and services providers.

Bob Ferrari

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