The U.S. supply chain has shown major vulnerabilities during the pandemic. Long reliant on a just-in-time approach (JIT) to inventory stocking, the industry began to feel the pinch when demand exceeded availability. The result was major shortages, stockpiling and a ripple effect that many supply chain experts had been predicting for years. To make matters worse, medical supplies were at the center of massive shortages, leading to limited availability of personal protective equipment (PPE) and other essential items for frontline healthcare workers.
It's easy to look back and say what should have been done. But companies must prepare for the future, by addressing systemic challenges. Now is the time to embrace strategies that set healthcare facilities up for success, regardless of whether there’s a surplus or shortage of crucial medical supplies.
As COVID-19 spread around the world, the medical supply chain began to scramble. It quickly became apparent that the JIT delivery model that many hospitals, especially smaller, rural facilities, had adopted, couldn’t withstand elevated demand during a catastrophic pandemic. Stories of frontline workers re-using PPE supplies or even making their own gained national attention and led to an awakening throughout the supply chain.
So how did this happen? Besides hospitals not having an inventory of supplies to fall back on, there were also other factors in the supply chain fueling the problem. Manufacturers, distributors and group purchasing organizations (GPOs) had been relying on a single source for supplies and materials, and when those suppliers were forced to close, the result was shortages down the line. The lack of supplier diversity created havoc within the industry, forcing many to rethink the partners they rely on, and the strategies they use to stock essential supplies.
Unfortunately, there’s no way of knowing when and where the next global crisis will occur, but if 2020 taught us one thing, it is that a crisis can strike when we least expect it. As leaders in the supply chain industry, we must prepare and put strategic lessons from the past into play to conquer the future.
Stockpiling medical supplies comes with a variety of challenges, but there are a few instances when it makes sense for hospitals to have excess inventory on hand. Just as consumers stock up on paper towels, toilet paper and non-perishables, hospitals can maintain a repository of in-demand supplies with extended expiration dates and fewer complex storage requirements. This includes masks, gloves, and gowns that are always in demand and don’t require refrigeration to be stored. What’s more, PPE protects frontline workers, and as we’ve seen with COVID-19, keeping them healthy during a pandemic is crucial when fighting a silent killer like a highly contagious virus.
Beyond everyday essentials like PPE, it’s difficult for hospitals to stockpile medical supplies. This is in large part because it’s impossible to predict which products will be in short supply. Still, there are tactics that can be implemented to help hospitals be more prepared without having to stockpile.
The best way to prepare for future global disasters is to ask manufacturers, distributors and GPOs how they’re getting ready for the next shortage. Their answers should be centered around diversifying sources for supplies to overcome potential shortages, as well as adopting proactive initiatives to supplement products when they are, or will be, in high demand.
If we’ve learned anything from the recent supply chain shortages, it’s that suppliers shouldn’t be dependent on one source for goods. Rather, they should have multiple options for sourcing materials and supplies to ensure a consistent flow into the supply chain.
Throughout the ups and downs of the last two years, the U.S. supply chain has proved its resilience by pivoting and innovating to create new partnerships and reinvent existing ones. From sourcing to manufacturing to transporting supplies, there are operational and cost efficiencies to be gained when seeking out the right supply chain partners.
Mike Palazzini is executive vice president of operations at Triose.
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