By Valerie Dimond

One lesson that healthcare supply chain professionals are learning from COVID-19 is that it might be time to look outside the bottom-line box. Some procurement experts are revising what used to be a common goal for most: keep it lean. Implementing low unit of measure (LUM) and just-in-time initiatives — practices that have been shown to optimize inventory levels, improve clinical efficiencies, and reduce waste and spending — might not be the answer in times of trouble. Reversing that move isn’t a guarantee that interruptions won’t ever occur, but it could reduce serious inventory problems during a crisis.

“COVID-19 has broken the global supply chain and it will be disrupted for at least many more months,” said Doug Bowen, vice president of supply chain services at Banner Health, a nonprofit integrated delivery network based in Phoenix, which operates 28 hospitals, three academic medical centers and other services in six states. “Those health systems with just-in-time deliveries from their distributor found out how quickly that model can fail due to low inventory. Banner evaluated the opportunity to implement LUM and we declined in order to provide more safety stock for the healthcare operations.”

Also, while demand planning certainly makes sense for achieving successful outcomes, healthcare’s changing landscape can make the task difficult. “Today’s healthcare supply chain is forced to make decisions in an ambiguous and uncertain environment,” said Bowen. “Banner created a corporate dashboard using patient census and predictive modeling to provide insight into days on hand of PPE supplies and a host of other COVID-19 topics. In supply chain, we use both the traditional days-on-hand method and the predictive method. This provides two views of situational awareness so we can make the most informed decision to support the healthcare operations.”

Using a vertical supply chain strategy, Banner also relies on a consolidated service center to provide self-distribution, self-contracting, and self-manufacturing of surgical packs. Having a 200,000 square foot distribution center has been central to their effort and serves as the health system’s “workhorse” during COVID-19 and other unexpected events.

“Banner’s distribution center is not just a tactic, it is the business model for our supply chain,” said Bowen, whose division is currently ranked in the Top 10, nationally, in the Gartner Healthcare Supply Chain Top 25. Also critical is Banner’s Emergency Operations Center (EOC) and a network of teams they established to work with stakeholders and develop strategies for managing various needs. For example, Banner’s chief clinical officer chaired a special team named the PPE Cabinet.

“Since the dangerously short supply of PPE was the No. 1 problem to solve, this topic became the first item on the agenda every day,” said Bowen. “Just like other health systems, we had extreme challenges getting PPE (N95 masks, procedure masks, isolation gowns, gloves, and face shields) and literally thousands of other items.”

Finding solutions
Following CDC guidelines, conservation efforts were also made by healthcare workers to keep N95 masks functioning longer, which reduced daily consumption by more than 50 percent and a move Bowen suggests other healthcare facilities take to keep national supply more robust. However, getting buy-in is also key to sustainment. “Create a culture where supply chain is everyone’s business, where conservation and good stewardship are promoted and valued.”

Other initiatives included partnering with a local clothing manufacturer to make reusable isolation gowns and implementing fabric masks. They also worked with Arizona State University to get 3D printed face shields and had access to the University’s web-based PPE Resource Network, which matches hospital needs with possible solutions.

Banner now has a “play book” they can turn to, and have also established new supplier relationships they can depend on. “The pandemic shines a bright light on the strengths and weaknesses of the supply chain information systems,” said Bowen. “Now is the time to evaluate the supply chain infrastructure to make needed improvements and to ensure it is prepared for the future demands.

“We have a bias for action; we try possible solutions, make mistakes, learn quickly from it, and continue the improvement process until we are satisfied with the solution,” continued Bowen. “Having a trusted team full of seasoned leaders that excel in a variety of skill sets allows for deep delegation of authority and responsibility to make decisions quickly and act upon them, which is exactly what is needed to successfully respond to a crisis such as COVID-19.”

It’s a structure that his department developed 18 years ago and counting — a vertical supply chain system that is “data-driven, disciplined in cost controls, and results oriented,” asserted Bowen. “We have not spent any time revising our strategy since then.”