Prepare your supply chain for the future with a contingency stock plan

Supply chain is the heart of the health system, it’s important for your facility to be prepared for future inventory management obstacles.

The ongoing COVID-19 pandemic and supply challenges have shown the need for contingency stock plans that allow you to continue delivering quality patient care while navigating inventory crises. This involves the need for determining your most important supplies for contingency stock scenarios, locating sufficient space, and getting the right support for your logistical needs. 

Different contingency stock scenarios could include pandemics or natural disasters. Personal Protective Equipment (PPE) will be in high demand in pandemic scenarios. Stay prepared by understanding your facility’s PPE utilization rate using the Centers for Disease Control (CDC) PPE Burn Rate Calculator. When facing a natural disaster, follow the CDC’s blueprints on its Natural Disaster and Severe Weather web page to best respond to earthquakes, floods, and more. Whatever the contingency stock scenario, be sure to establish your high demand items and how much to have on hand.

It is also imperative to locate sufficient space for your contingency stock, and plan for space needed for up to 90 days of inventory on hand (DIOH). The COVID-19 pandemic has led to many states mandating a 14-90 DIOH for PPE. Also understand if your products require special storage, such as temperature and / or humidity control. Be sure your warehouse can support these product specific needs

The third focus of your contingency stock plan should be to get the right support when it comes to logistical planning and managing. Your contingency stock center requires inventory management to run like a distribution center, including the addition of labor, systems, and transportation to facilitate the center. Working with a healthcare distributor can give you an advantage, as they have full knowledge of healthcare logistics, which is crucial when navigating the dynamic supply chain. They can also work on your side to identify solutions when specific supplies challenges arise.

To assist with contingency stock planning, Cardinal Health launched Strategic Stock Solution, now a critical blueprint for pandemic preparedness which gives customers flexibility with a two-tiered approach to expertly managing supply storage. With one of the largest distribution networks in the U.S., Cardinal Health is home to 36 distribution centers reaching the entirety of the United States within hours. The two-tiered solution allows fast-moving products to be stored at local distribution center and slower-moving products to be stored at national stocking location. Upon customer request, those products can be shipped within 72 hours of request, utilizing Cardinal Health’s OptiFreight® Logistics business, a premier logistics provider that helps ship critical supplies out faster and connects with carriers when shipments face delays.  

Strategic Stock Solution can also be an extension of the ValueLink™ solution, allowing customers to access their Customer Owned Inventory (COI) and distributed items in a logical unit of measure, and receive it in their department specific tote on their next scheduled truck. Sara Nunez, Director, Distribution Marketing, Cardinal Health said, "We were able to develop this solution quickly due to our expertise and offerings already in place, from product distribution and storage to shipping. We connected these under one umbrella to manage everything from point of purchase to the moment the supplies are used in a healthcare setting."

Based on customer data from the first COVID-19 outbreak, Cardinal Health created a pandemic blueprint with 44 products that experienced significant demand spikes during COVID-19, all grouped into four major categories based on use:

  • Treat (artificial airway accessories, bronchoscopes, ventilator accessories, nebulizer accessories and more);
  • Protect (wipes, hand sanitizer, lab coats, eye shields/visors, isolation gowns and more);
  • Diagnose (medical thermometers, swab collection, pulse oximeter units and more) and
  • Vaccinate (syringes, needles and more).

Nunez shares, "This blueprint means that supply chain leaders can easily see what their hospitals or health systems will need in times of emergency – they no longer have to guess what will be in greatest demand.”

Strategic Stock Solution has increased customers’ supply chain resiliency, efficiency, and proactive supply chain visibility. It also has prepared customers for the ongoing manufacturer backorders and manufacturer product allocations the healthcare industry continues to face. "This solution goes far beyond addressing the challenges of how to handle PPE," said Nunez. "It's a critical innovation for the healthcare industry and can dramatically improve the health care supply chain."

Read more on how Cardinal Health launched a business solution for the next public health emergency here, and view the Strategic Stock Solution webpage to see how it can improve efficiency within your facility’s supply chain.

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