A group to discuss the healthcare supply chain and how to more effectively source reliable and sustainable... View more
A group to discuss the healthcare supply chain and how to more effectively source reliable and sustainable products, technology and services.
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Out to Sea – Supply Chain
Out to Sea – Supply Chain
As the world adapts to the changes brought on by COVID-19, supply chain and it’s functions have been continuously in the news: shortages in toilet paper due to panic buying and hoarding, the massive global demand surge for personal protective equipment (PPE), reports of food shortages, complicated ultra-cold storage networks for vaccines and now the Ever Given container ship that is wedged in the Suez Canal that is costing an estimated $10 billion in trade every day according to the New York Times. For an eye opening live map that shows shipping vessels currently at sea, check out Marine Traffic. The world relies on these trade routes and when a critical path such as the Suez Canal is blocked, the results are felt worldwide.
Supply chain, although a new term coined in the 1980’s, has been around for thousands of years. Rome, the first city to reach a population of 1 million in 133 A.D, had developed complex routes trade routes to supply its population with necessities. Historians believe that Rome was capable of importing over 2 million gallons of olive oil annually and over 200,000 tonnes of grain a year to keep its inhabitants fed.
Fast forward to today’s world where we are equipped with vast data sets, a clear understanding of the world geography, and computers that can assist to help quickly analyze data to help make informed decisions. Today’s world is impressed with the “work from anywhere” mentality, but the world of supply chain exists in physical products. Anyone who watches out the window of their residence will likely see Amazon trucks delivering to their doorstep. Next day delivery no longer impresses people and same day or 2-hour delivery in certain markets are becoming more prevalent.
Healthcare supply chains are tasked with keeping enough stock on hand to handle any emergency that walks through the door, but as recent events have unfolded these teams must adapt and evolve. A hospital contains thousands, if not tens of thousands, of unique items that are critical for the clinical teams to provide care for their patients. These supplies account for the highest expense behind labor with estimates of 15-40% of all expenses and continue to increase. Supply chain and its operations touches every operating unit in a hospital. Standardization is needed and data must be used to help organize the flow of materials.
To further complicate matters, healthcare systems have adapted a single-use “disposable” mentality in which a supply is used once and then disposed of. Spend some time watching freight being unloaded in your hospital, in one aspect there is a sense of security knowing that these products will help save lives and improve patient health, and yet on the converse side almost every single one of these products will be used once and then discarded to spend the next thousand of years in a landfill. We must move to a more circular economy and cannot continue to use raw materials and resources in a way that promotes a “one and done” usage pattern.
Blue sterilization wrap has become another product category affected by shortages and rolling back-orders and allocations. This wrap has been known to be one of the bulkiest waste materials coming from the surgical suites and yet is a material that can be recycled. Circular Blu is one organization that is reclaiming this wrap in order to make new supplies.
Healthcare supply chains must work with clinical teams to build forecasting and demand planning into their operations. To build resiliency there must be improvements in the communication upstream to distributors and manufacturers and likewise manufacturers must improve transparency in their supply lines. The solution is transparency and advanced data-sharing to improve operations. Unfortunately, the healthcare supply chain continues to face challenges, but with decisions that are based in data and demand forecasting, these teams can evolve into a more strategic partner.
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