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Five strategies for building a more resilient supply chain

by Lauren Dubinsky, Senior Reporter | March 05, 2021
From the March 2021 issue of HealthCare Business News magazine

The solution is a more resilient supply chain, and the first stepping stone to getting there is building a strong strategic sourcing process. This involves developing processes for identifying opportunities, gathering requirements, engaging with stakeholders, identifying the suppliers, gathering the bids, and negotiating the agreements.

“Most healthcare supply chain teams have the skills, but may not have leveraged them extensively as they relied on GPO contracts,” said Lohkamp. “Often organizations haven't invested in the tools to really simplify and manage the process.”

However, the pandemic has pushed organizations to reinvest in strong strategic sourcing practices to source PPE directly and contract directly with manufacturers both in the U.S. and overseas.

In addition to that, the “just in time” replenishment strategy needs to be replaced with a more balanced approach. This strategy has helped reduce costs but has left little room to adjust when the global supply chain is disrupted, explained Lohkamp.

He predicts although there will still be a place for the “just in time” approach, there will be a move toward safety stocking, warehousing, and inventory distribution. It may increase costs, but it will give hospitals greater control over supply in those categories.

Another important stepping stone is developing the skills and techniques to adopt demand planning and manage supplier risks. This includes tracking electronic transactions, recalls and price exceptions, and hosting quarterly business reviews with strategic partners to coordinate strategic activities.

“By tying this understanding of total supply chain to events like natural disasters, we can start to anticipate potential breakdowns in supply and then start putting together plans to develop alternative sources that can be quickly leveraged in time of need,” said Lohkamp.

Lastly, the industry needs to focus on developing more advanced supply chain analytics to identify opportunities and measure effectiveness. These analytics tools need to be able to combine data from core supply chain systems, electronic medical records, external benchmarks, and even inventory availability information from suppliers.

He concluded the session with a call to action for organizations to sit down and determine what is truly meaningful to their leadership. That will ultimately help to identify ways to better manage their supply chain operation.

“Given the elevated status of supply chain today, this is the perfect opportunity to use analytics and data to drive more strategic collaboration and demonstrate the impact of supply chain on the overall business,” said Lohkamp. “We know it will take a lot of work, but it will have long-term impacts, not just for your organization, but also for the rest of your extended supply chain.”

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