The US supply chain has shown major vulnerabilities during the pandemic. Long reliant on a just-in-time (JIT) approach to stockpiling, the industry began to feel the pinch when demand exceeded availability. The result has been major shortages, inventory and a ripple effect that many supply chain experts have been predicting for years. To make matters worse, medical supplies were at the center of massive shortages, leading to limited availability of personal protective equipment (PPE) and other essential items for frontline healthcare workers.
It’s easy to look back and say what should have been done. But companies must prepare for the future, by addressing systemic challenges. Now is the time to adopt strategies that set health facilities up for success, whether there is a surplus or a shortage of essential medical supplies.
As COVID-19 spread around the world, the medical supply chain began to scramble. It quickly became apparent that the JIT delivery model that many hospitals, especially smaller rural facilities, had adopted could not withstand high demand during a catastrophic pandemic. Stories of frontline workers reusing PPE supplies or even making their own have captured national attention and led to a wake-up call throughout the supply chain.
So how did this happen? Along with hospitals not having a stockpile of supplies to fall back on, other supply chain factors were also fueling the problem. Manufacturers, distributors, and group purchasing organizations (GPOs) relied on a single source for supplies and materials, and when those vendors were forced to close, it resulted in shortages down the line. The lack of supplier diversity has wreaked havoc within the industry, forcing many to rethink the partners they rely on and the strategies they use to stock essential supplies.
Unfortunately, there’s no way to tell when or where the next global crisis will occur, but if 2020 has taught us anything, it’s that a crisis can strike when you least expect it. As supply chain industry leaders, we must prepare and implement the strategic lessons of the past to conquer the future.
Storing medical supplies presents a variety of challenges, but there are a few instances when it makes sense for hospitals to have excess stock on hand. Just as consumers stock up on paper towels, toilet paper, and non-perishable food, hospitals can maintain a repository of in-demand supplies with extended expiration dates and fewer complex storage requirements. This includes masks, gloves and gowns which are always in demand and do not require refrigeration to stock. Additionally, PPE protects frontline workers and, as we’ve seen with COVID-19, keeping them healthy during a pandemic is crucial to fighting a silent killer like a highly contagious virus.
Beyond everyday essentials like PPE, it’s difficult for hospitals to stockpile medical supplies. This is largely because it is impossible to predict which products will be in short supply. Still, there are tactics that can be implemented to help hospitals be better prepared without having to stockpile.
The best way to prepare for future global disasters is to ask manufacturers, distributors and GPOs how they are preparing for the next shortage. Their responses should center on diversifying sources of supply to overcome potential shortages, as well as adopting proactive initiatives to supplement products when they are or will be in high demand.
If we’ve learned anything from recent supply chain shortages, it’s that suppliers shouldn’t depend on a single source for goods. Rather, they should have multiple options for sourcing materials and supplies to ensure a steady flow through the supply chain.
Throughout the ups and downs of the past two years, the US supply chain has proven its resilience by pivoting and innovating to create new partnerships and reinvent existing ones. From sourcing to manufacturing to transporting supplies, there are operational and economic efficiencies to be gained when finding the right supply chain partners.
Mike Palazzini is Executive Vice President of Operations at triose.