A few months ago, while working on an ERP implementation for a large hospital, one of the directors on the supply chain team was abruptly pulled away. A key supplier admitted that one of their contractors was manufacturing in a facility not registered with the FDA and surgical gowns they manufactured may not be sterile. Considering this emergency, I was ready to postpone the meeting. But the team quickly agreed that we needed to complete this requirement gathering session. We needed to move forward and make progress on this project. After all, this supply chain disruption was exactly the type of challenge that our new solution would be able to handle more swiftly and accurately than their aging system could.
Due to the complexity of hospitals’ supply chains, clinically impactful disruptions are more common than most people expect. In addition to having multiple locations, departments, and business units to account for, hospital supply chains are further complicated by the range and types of products involved and the different requirements for handling them. For example, pharmacy products are highly regulated and therefore require accurate end-to-end tracking and management to ensure compliance. Countless products are subject to safety recalls – like the one that pulled our supply chain director away. Mismanagement of these supply chain complexities can result in situations in which doctors and nurses are unable to carry out their mission as caregivers.
According to a Cardinal Health survey from 2017, 18% of hospital employees have heard of a patient being harmed due to a supply shortage, and 25% knew of expired or recalled products being used to treat patients. Inefficiencies and functional gaps in aging supply chain management systems are causing patients to receive less than desirable care. The same Cardinal Health survey showed that 20% of a physician's time at work is consumed by supply chain tasks rather than caring for patients or working on research. Hospitals in America could save $24.5 billion annually or approximately $11 million per hospital each year by eliminating supply chain inefficiencies. To generate these estimates, hospitals with high performing supply chains were compared with all others, which proves that these savings are realistic and attainable without sacrificing overall hospital performance.
Every day, Supply Chain Management errors hinder doctors and nurses’ ability to effectively treat patients. With these issues occurring with such frequency even during normal operations, it is not hard to imagine the widespread Supply Chain challenges that would occur during a crisis, especially a global one. Today, amid a pandemic, hospitals must function as efficiently as possible. Doctors and nurses want to focus their attention on patient care rather than the availability of supplies, but this is not always possible.
The COVID-19 pandemic dramatically disrupted the medical supply chain. Demand for masks, antibiotics, and other supplies skyrocketed as medical staff, first responders, and average citizens all attempt to protect themselves from exposure to the virus. At the same time, the supply of these items has plummeted. China, the world’s largest supplier of masks, was forced to close factories to prevent the virus’s spread. These factory closings in China have limited the supply of antibiotic components to India, which is the world’s primary producer of antibiotics. As Indian government officials attempt to handle the pandemic in their own country, they have begun to restrict the number of antibiotics that are exported. To make up for the lack of supplies available to be imported, American companies stepped up, put their normal business operations on hold, and began making ventilators and masks using any available supplies and equipment. Medical Supply Chain Management systems must be able to adapt to these unusual circumstances to procure the appropriate amount of supplies based on the changing demand and sourcing from new or unusual vendors. While the supply shortages caused by COVID-19 have grabbed media attention recently, the reality is that supply chain management issues existed in healthcare long before the pandemic forced them into the spotlight.
Hospitals must be able to overcome challenges and respond quickly and effectively during a crisis to provide the best care for those affected. People are getting dangerously ill and dying from coronavirus. Caring for patients and saving lives must be the priority for doctors and nurses. But they cannot devote their full attention to patient care unless they first have confidence in the integrity of the supply chain, certainty about the availability of drugs, PPE and other equipment, and confidence in the accuracy of the data that manages it all. The supply chain must be managed effectively by a Supply Chain Management System to allow doctors and nurses to focus on patient care with assurance that they will have the necessary and proper supplies to do so.
We continue to move forward with the hospital ERP implementation, even amid this pandemic. Virtually, I am still working alongside my colleagues in the hospital system, testing new scenarios, and working through evolving requirements. I am lucky to be on a team like this, uniquely positioned to follow the stay at home orders while still contributing to the future of healthcare. Together, we are transforming the enterprise and putting a supply chain solution in place that will prepare the hospitals for the next challenge. This work will ensure that at the go-live date doctors and nurses will be able to trust that the supply chain is being managed effectively, reducing the risk of mishaps, and accelerating the response to health emergencies. This current pandemic proves just how significant the work we are doing is and why it is essential for us to continue working on the project. When the new Oracle Cloud implementation goes live, the hospital will find itself not only with streamlined reporting, supply and demand predictions, and supplier regulations but also with reduced operating costs.
Hospital supply chain management systems must be able to handle complexities, whether those complexities come from a global pandemic or regular daily activities. Premier migrates the data that drives these systems and ensures that they will function as efficiently and accurately as possible. With these systems in place, doctors and nurses can provide the high standard of care that we all hope for with the peace of mind that they will have the supplies needed to do so. While the recent pandemic highlighted the challenges facing healthcare supply chain management systems, these challenges existed all along. For hospitals to provide the best possible patient care, they must have an effective supply chain management system. Understanding the clinical impact of an SCM solution continues to motivate my team and I to keep working hard, especially through the COVID-19 pandemic. We know that when the project is complete it will make a real impact to alleviate stress and reduce extra work for doctors and nurses. Simultaneously patients will receive better care because of streamlined operations. Because of our efforts to migrate to Oracle Cloud, the hospital will be in a better position to manage the next supply chain disruption. Our Premier team is proud to work on a project that will have such a long-lasting, positive impact.
Marzouk, Shaden, and Scott Nelson. “The Biggest Untapped Resource at Your Hospital? Your Supply Chain.” Cardinal Health: Healthcare Solutions, Logistics & Supplies, Cardinal Health, 14 Feb. 2017, www.cardinalhealth.com/en/essential-insights/the-biggest-untapped-resource-at-your-hospital--your-supply-chai.html.
Marzouk, Shaden, and Scott Nelson. “The Biggest Untapped Resource at Your Hospital? Your Supply Chain.” Cardinal Health: Healthcare Solutions, Logistics & Supplies, Cardinal Health, 14 Feb. 2017, www.cardinalhealth.com/en/essential-insights/the-biggest-untapped-resource-at-your-hospital--your-supply-chai.html.
Austin, Rob. “Hospitals' Supply Chain Savings Opportunity Jumps to $25.4 Billion a Year.” Guidehouse, 18 Oct. 2018, guidehouse.com/insights/healthcare/2018/supply-chain-analysis?utm_source=pr&utm_campaign=sc18.
