How health systems can build supply chains for the future

Health system supply chains are facing a turbulent landscape. To keep pace with emerging challenges, supply chains and their leaders need an updated road map and navigation system.

During a November webinar hosted by Becker's Healthcare and sponsored by Cardinal Health, supply chain leaders discussed the impact of trends in the healthcare industry and what steps can be taken to best prepare supply chains for the future. Panelists included: 

  • Paul Farnin, director of Supply Chain Solutions, Cardinal Health
  • Bill Moir, senior vice president of Supply Chain Management, Henry Ford Health System 
  • Joe Walsh, founder, Supply Chain Sherpas

Four key takeaways:

  1. The reimagined supply chain is built around four pillars. They are:

    1. New measures of success. Supply chains ensure continuity of supply, ideation, innovation, commercialization, clinical quality improvement, patient engagement, productivity increases and revenue optimization. "We can no longer allow ourselves to be reduced to a cost savings department. The new measure of success is not how much supply chains can save, but how much value they create given the investment made into them," Mr. Walsh said.

    2. Improved alignment. Supply chain management is a function unto itself and deserves to be regarded at the same level as the CFO, CMO and CEO functions.

    3. New and improved strategies. At an operational level, updated strategies are needed for dynamic sourcing, risk and event monitoring, network design, demand sensing and demand planning. At an organizational level, sustainability, diversity and fostering collaborative relationships with manufacturers and distributors call for new approaches.

    4. A full focus on talent management. The central issues of this pillar are recruiting the right leaders and team members, developing the talent for today's problems and tomorrow's challenges and retaining that talent through compensation and engagement.

  2. Supply chains of the future will drive value beyond traditional expectations. Getting the right product to the right place at the right time at the right cost will have to be complemented with value-based techniques. These techniques may stem from innovative applications of data and analytics to better inform supply chain operations or from extending supply chains into new areas. "With the hospital at home concept becoming increasingly attractive to patients and communities, supply chains are perfectly positioned to deliver care to the last mile," Mr. Moir said.

  3. Future-proofing supply chains depends on supplier diversity. This dependency has been brought into focus by the current supply shortages across many industries, including healthcare. Awarding business to a greater number of diverse vendors will not only safeguard against such scarcity in the future, but also drive competition, improve quality outcomes, inject wealth into economically disadvantaged communities and advance the health and well-being of communities served by health systems. "Supplier diversity is actually a benefit to the organization, not just another thing you have to do," Mr. Moir said.

  4. Data analytics are key to making supply chains more resilient. Equipping supply chains with data analytics capabilities can streamline product sourcing decisions and improve inventory visibility and planning. "Many of us are looking for a greater level of automation as it pertains to product availability and substitution, which can help clinicians with decision-making," Mr. Farnin said. "Historically, we've helped hospitals look at inventory within their four walls, but physicians also need data to analyze what they might need going forward." 

As supply chain leaders across the industry face growing challenges, incorporating new measures, functions and capabilities will help further elevate their value to health systems.

To learn more about Cardinal Health's supply chain resources, click here.

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