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Achieving data-driven supply chain transformation

by Gus Iversen, Editor in Chief | June 01, 2022
Business Affairs
Marlin Doner
From the June 2022 issue of HealthCare Business News magazine

As healthcare embraces cost, quality, and outcomes as drivers of success, the potential for digital technology is easy to appreciate. When data and analytics are driving decision-making, that can bring a higher level of efficiency to every aspect of care, from interpreting radiological exams, to scheduling patients, to optimizing the supply chain.

It’s that last component, the supply chain, that we wanted to discuss with Marlin Doner, vice president of data analytics and product strategy at Prodigo Solutions, a healthcare technology company focused on helping providers achieve financial control and supply chain cost reduction.

HCB News: From a big-picture perspective, how has COVID-19 impacted hospital supply chain leaders?
Marlin Doner: There are three specific areas of impact that have stood out post-pandemic: risk, responsiveness, and resilience. During the pandemic, we saw shortages across many commodities due to surges in demand as well as supply shortages. In the past two years, supply disruptions drove up the cost of patient care by over 18%.

When it comes to risk, supply chain leaders are now evaluating vendor and supplier risk based on where items are being manufactured, the quality, and suitability of products. In the past, they were typically focused on financial risk. Now, they need to consider where the source of supply is, the usability of the product and whether the product will arrive on time. This extends beyond the supply of finished goods, and should also consider the raw materials that go into the finished goods. The further the supply chain reaches out, the more risk and possibility of disruptions you have.

Secondly, for responsiveness, there is now a federal mandate for how much safety stock is being held in reserve by health systems. The federal government has ruled that any products in the strategic national stockpile are not intended for use in any state or any individual hospitals. Therefore, hospitals must have their own stockpiles. Supply chains now need to determine and stock an appropriate number of specific items that would be required to respond in a pandemic. This is a financial burden on health systems that now must be factored into their total cost of operations.

Finally, for resilience, health systems and supply chains now need to anticipate demand based on numerous input variables. Historically, input factors have been straightforward: “What’s my caseload for specific procedures?” Now, they need to consider other factors, such as demand surges that might impact how much inventory to have on hand, or how quickly they can get supplies based on how close the finished goods are to their point of demand. The focus has shifted to evaluating and aligning variable demand with inconsistent supply.

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