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Beyond recalls: The other types of supply-chain disruptions we must address in healthcare

November 17, 2023
Business Affairs
Guillermo Ramas
By Guillermo Ramas

In the past 15 years, there has been a surge in the number of medical device recalls and a staggering increase in the number of affected units. At the same time, the process to manage medical supply recalls has not improved over time. In fact, it has become more inefficient, slow, and cumbersome.

But that’s only the tip of the iceberg when it comes to supply chain management challenges for hospitals. Recalls are difficult enough to manage from a provider perspective. Other supply chain disruptions can have just as big of an impact on a hospital’s ability to care for patients, and yet they’re going largely unaddressed from a transparency and technology standpoint. These disruptions include:

● Product shortages, which can arise for a number of reasons
● Backorders, due to production problems or shipping and distribution challenges
● SKU consolidations, in which manufacturers decide to concentrate production capabilities on a reduced number of products due to demand and profitability issues
● Market withdrawals, in which companies cease offering certain products or an entire catalog, sometimes regionally and sometimes across the board

Without a doubt, the healthcare supply chain is still suffering the effects of the COVID-19 pandemic, with a significant increase in all of the above disruptions when compared with pre-COVID days. Each and every one of these disruptions have consequences: In some cases, it might mean not being able to deliver proper care to a patient. In other cases, it can translate into canceled or rescheduled procedures. At the same time, to compensate for some of these issues, the sourcing team might decide to raise stock levels, which can lead to additional waste in a system that can simply bear no more.

The price of today’s insufficient, manual process
The current provider process for dealing with supply chain disruptions varies by organization and is almost always very manual in nature. For device recalls, manufacturers and distributors send out paper alerts. Providers then respond to these alerts and subsequently report back to the manufacturer or distributor, who in turn notify the FDA.

When it comes to other types of disruptions, the process is even less predictable and streamlined.

For example, backorders are typically communicated through EDI when the order from the hospital is processed. Now, once that happens, the process requires the sourcing team to start trying to figure out whether the backorder is an issue that will last two days, two weeks, two months—or more. Doing so requires phone calls, emails, and a lot of back and forth, as well as simultaneously figuring out if the hospital already has approved alternate products that the sourcing team can procure or if they need to identify some alternates and have Clinical Quality Value Analysis (CQVA) approve them.

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