The COVID-19 pandemic has sent shockwaves throughout the global healthcare system. And it has revealed some structural weaknesses in the process. Healthcare supply chain teams have felt pressure like never before.
Some of this pressure, related to the never-ending scramble for sourcing Personal Protective Equipment (PPE), was perhaps inevitable. But some of it can be traced to ways that supply chain wasn’t generally prepared for an emergency scenario like this one.
As hospitals and their supply chain teams emerge from coronavirus emergency mode, it’s important to learn the necessary lessons so that the next emergency – whether it’s a hurricane, tornado, or earthquake – doesn’t cause the same level of disruption.
Below, we’ll outline exactly how you can empower sourcing teams to never miss a beat in the next emergency.
The Traditional Supply Chain Pattern
The traditional supply chain team in a midsized hospital consists of a director of materials management, perhaps an operations manager, and an analyst or two. It’s a lean team.
When COVID-19 first emerged, everyone on that team was suddenly tasked with sourcing PPE. It was all hands on deck, and other responsibilities got neglected. Faced with the need for creative sourcing, team members needed to vet new vendors and manufacturers to ensure their goods met the hospital’s needs. It became supply chain’s job to fend off the scammers and to engage in highly unusual buying practices. One hospital even spent upwards of $250k at Gander Mountain, an outdoor goods retailer.
This by itself wasn’t a problem. But the pandemic revealed other problems with the traditional supply chain pattern, showing several ways that the existing model was insufficient during an emergency.
Sourcing Problems Revealed
At the start of the COVID-19 emergency, sourcing dollars were mostly rerouted to PPE. This makes sense: taking care of patients and keeping hospital staff safe are (and should be) top priorities. But sourcing initiatives can’t stay on the back burner forever. The fact that they got put there reveals a capacity problem in supply chain.
Additionally, most supply chain professionals don’t have clinical experience. The few that do generally moved on from that role some time ago. Additionally, since they aren’t practicing medicine, there can be at times a disconnect between supply chain and clinicians.
Most importantly, there’s a problem of management vision. Creative thinking about hiring and resource allocation in supply chain could solve many of these challenges, as we’ll outline below.
How To Empower Your Sourcing Team In An Emergency
With this context established, let’s look how you can empower your sourcing team to continue performing well during an emergency:
1. Have Dedicated Sourcing Team Members
Putting in place dedicated sourcing team members is the most significant way to create a resilient, emergency-proof team.
Drew Mays, Director of Customer Success at Curvo, comments: “All the challenges we saw at the onset of COVID-19 got me wondering: what keeps hospitals from building a supply chain team that would never miss a beat? What’s stopping supply chain teams from being emergency-proof? I believe it can be done if hospital administrators are willing to think creatively and proactively about resource allocation.”
In this new model, hospitals maintain permanent, dedicated personnel for both supply chain and operations. Then, in addition to those, they create a separate sourcing team (even if it’s just one person), i.e. a strategic sourcing manager, sourcing specialist.
During a pandemic or other emergency, this sourcing team’s job doesn’t change. They still execute contracts, run projects, and make sure items aren’t falling off contract. They may additionally watch for price-gouging as they are already watching for price creep.
Whatever happens to supply chain and operations – whether it’s a mad dash for PPE like we’re seeing right now or some other unforeseen future obstacle – the sourcing manager or sourcing specialist continues these vital tasks, uninterrupted.
2. Drive Departmental Cost Savings
Recommending that hospitals staff up a department in a moment when they are losing money may seem wildly tone deaf or at least counterintuitive, we realize. But in the long term the move will pay off.
For one, contracts would be signed on time, keeping costs in check. You wouldn’t deal with unexpected price increases like most hospitals have been facing this year.
Imagine being in a position to continue driving savings during a pandemic. If the new headcount would offset its own costs in savings, this move would be a no-brainer. It just requires some creative and forward thinking from leadership.
This isn’t just hypothetical, either.
Tony Arnold, Manager of Purchasing and Strategic Sourcing, Supply Chain at St. Charles, was already in this kind of role before COVID-19 hit:“I’m a big proponent of having a dedicated sourcing specialist as part of a hospital’s supply chain team because I’ve lived through the success of it. I was in this role when COVID-19 hit, and I was able to continue working on sourcing projects virtually unimpeded. We’re on much better footing than we would’ve been without someone in this position.”
3. Modernize Supply Chain Vendor Relationships by Using Virtual Meetings
The traditional relationship between supply chain and vendors has been very personal. It involves many face-to-face meetings, sitting across the table from each other. Or at least, it did. COVID-19 is forcing all meetings to go virtual, including supply chain-vendor meetings.
One hidden benefit here is opportunity cost. By not having to wait on a vendor to physically travel to your location, your team could see faster movement on locking in pricing and other vendor negotiations. In order to execute successful virtual meetings between vendors and supply chain, it’s key to make sure the right tools and software are in place to set these video conferencing meetings up for success.
4. Engage Physicians
There never seems to be enough time for supply chain to engage with physicians. Both parties are exceedingly busy, and yet this engagement is critical for success. During an emergency like COVID-19, many physicians have found themselves with free time as their surgeries were canceled.
For supply chain teams with sufficient capacity heading into an emergency, a time of crisis could be the perfect time to engage on a deeper level with physicians. St. Charles, for example, started reviewing costs with physicians earlier this year. Given the situation, Tony made far more progress far more quickly with his physicians than is typical.
There are plenty of ways to maximize physician engagement when electives are limited or on hold. It’s a great time to look at utilization patterns and cost differences between physicians. In a time where hospitals are losing money due to elective procedures being on hold, physicians may be particularly savings conscious. In other words, right now, you may have the ear of the physicians to a degree that would be unheard of pre-COVID.
5. Establish New Regulations, New Standards of Readiness
COVID-19 caught hospitals (and the whole world) off guard. The PPE stockpiles that hospitals and governments had on hand at the beginning of 2020 were drastically insufficient for a pandemic of this magnitude. And while it’s understandable that hospitals were – to a degree – caught unprepared, we must be prepared for the next event.
Now is the time to put plans in place so that your healthcare organization is better prepared for the next emergency. Already, some states have put new guidelines in place requiring a 90-day PPE stockpile before a hospital can resume elective procedures.
Following minimum state guidelines is a place to start, but your hospital may choose a higher standard. Now may not seem like the best time to have those conversations, given the pressures of the moment. But the conversations must happen.
6. Embrace Virtual Work Where Possible
One of the big struggles we saw during the early days of COVID-19 was the challenge that many had transitioning to virtual work or work from home. Granted, much of healthcare cannot be done from home. But much of supply chain can. Hospitals are being forced to learn how to do this better, and it’s important to retain the lessons learned.
The next emergency likely won’t be a pandemic. It could even be a natural disaster, like a tornado. By having processes in place now for how to transition effectively to remote work, your team will be ready for whatever happens next.
Some employees may even value the ability to work from home some or all of the time, even under normal circumstances.
A Sourcing Technology Partner to Help You Through Better or Worse
COVID-19 has created many new challenges throughout the healthcare industry. At the same time, those healthcare organizations and supply chain teams that learn from these challenges will be better positioned for whatever challenge comes next.
Curvo excels in partnering with hospitals and health systems to help lighten the load while teeing up savings. Let us show you how Curvo can help.