The power of optimization: Supply chain strategies hospitals can't afford to ignore in 2023

During the pandemic, product disruptions were the norm for healthcare supply chain teams. Many organizations didn't have the analytics or technologies necessary to analyze problems and develop solutions. Today, supply chain leaders at hospitals and health systems face additional challenges due to talent shortages and rampant inflation.

During a February Becker's Hospital Review webinar sponsored by Cardinal HealthTM Presource® Procedural Pack Solutions, two supply chain leaders discussed their top strategic priorities in 2023 and how they are partnering with vendors to achieve their business objectives. These leaders were:

  • Mike Holland, Vice President of Supply Chain, OhioHealth in Columbus, Ohio
  • Derrick Williams, Vice President of Supply Chain Operations, Indiana University Health in Indianapolis

Three key takeaways were:

1. To keep a seat at the C-suite table, supply chain leaders are doubling down on data and analytics. During the pandemic, supply chain teams had frequent exposure and visibility at the highest organizational levels. To maintain this position, supply chain leaders are focusing on analytics to support sound financial and clinical decision-making. "We are going back to the basics of building analytics so we can have quantitative discussions with our leaders. These conversations underscore the value of the supply chain team," Mr. Williams said.

Cardinal Health is helping hospitals and health systems with these efforts. "We've done a lot of work with Cardinal [Health] so we can see upstream in the supply chain and respond to things more proactively," Mr. Holland said. "As a result of that partnership, disruptions continue to go down on our priority list."

2. Proactive communication between supply chain and clinical teams enhances patient safety. Although supply chain teams strive to prevent back orders, substitute products are sometimes inevitable. The key to mitigating risk is understanding when substitutions are coming and proactively communicating with clinicians. "Patient safety comes into play when we have a back order," Mr. Williams said. "Either clinicians are unable to care for patients, or if we substitute a different product, providers must participate in clinical education. By communicating proactively about these changes, clinicians can respond more effectively."

OhioHealth's supply chain team conducts daily huddles with care teams to discuss substitute products, but it is also piloting a technology-based approach to provide more dynamic information to clinicians. "Given the staffing gaps in the clinical environment, the worst thing we can do is have a rotating offering of products. When we bring in a substitute, we add a brightly colored QR code that clinical staff can scan with their smartphone. This brings up a video they can watch about how to use the product," Mr. Holland said.

3. Technology solutions are increasing supply chain efficiency and reducing costs. RFID-based inventory management technology from Cardinal Health™ WaveMark™ Solutions gives supply chain teams complete visibility of products from the moment they enter the building to point of use and through the charge process. “WaveMark is a technology we are doubling down on. For example, in our heart and vascular procedural space in our flagship hospital, we have seen 6 times return every year,” Mr. Holland said. In addition, OhioHealth and Indiana University Health are both using OptiFreight® Logistics to reduce shipping costs. "This integrated partnership is almost like a GPO for freight," Mr. Holland said. "Over the past year, we saved nearly $4 million, which more than offset the inflation we saw in our logistics costs."

Many feel that the pandemic jolted the healthcare supply chain out of the 20th century and has catapulted it into a more innovative environment. "We want to take the lessons learned from COVID and use them to inform our five-year strategy," Mr. Williams said. "As part of that work, we are taking a deep dive into how supplier relations can help us optimize and transform the supply chain of the future."

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