Sep 28, 2021

How to make a more sustainable healthcare supply chain

Supplychain
COVID19
Automation
Sustainability
5 min
How to make a more resilient healthcare supply chain
Kevin Sample at GHX Europe how healthcare's supply chain can become more sustainable

The COVID-19 pandemic made medical waste more visible than ever due to the use of single use plastic and the need to dispose of PPE after one use. Here Kevin Sample, Senior Consulting and Business Development Manager at GHX Europe, a provider of automation software, discusses the sustainability of the global healthcare supply chain. 

What issues with supply chains did the pandemic highlight? 

It highlighted several weaknesses in the healthcare sector’s approach to supply chain management. From delivery delays to shortages of critical supplies during the unprecedented spike in demand for PPE, it was apparent that vital information was not being routinely shared between suppliers and providers.

In particular, the struggle to increase the supply of necessary equipment to healthcare providers exposed some clear challenges in the just-in-time (JIT) model traditionally used by hospitals. This model delivers just enough materials to meet demand over days, weeks or months, and whilst this method can minimise waste and the need to store excessive amounts of materials on site, it also meant healthcare providers had little room to adapt to a sudden sharp increase in demand.

During COVID-19, this inflexibility coupled with poor visibility across the supply chain made it difficult to identify when, or even if, the right amount of goods would arrive.

We now acutely understand the inherent risks in this approach, with COVID-19 highlighting the limitations of the JIT model when faced with an emergency which requires products to be delivered quickly and at scale. 

What is supply chain visualisation?

COVID-19 exposed weaknesses where there was a lack of clear visibility in hospital supply chains, which made it difficult to identify when, or even if, goods would arrive. This meant that supply chains couldn’t tackle issues until they caused a problem, with the most obvious example being the PPE shortages at the beginning of the pandemic.

Perhaps the most important impact of COVID-19 on the healthcare supply chain will be improving supply chain visibility (SCV). Better SCV means that components, equipment and products can be tracked from manufacturer to consumer, with logistical information shared to reduce errors, promote quick responses and allow for the reshaping of demand or redirection of supplies.

With a deeper understanding of how their supply partners are managing risk, providers can make sourcing and contracting decisions to minimise potential supply chain disruptions. So, if a consultant can see that there’s a shortage in titanium, for example, they might postpone any elective joint replacement surgeries and instead schedule other operations that don’t require that material. 

How can supply chains become resilient for future pandemics? 

The pandemic has already led to a restructuring of the global healthcare supply chain, including the implementation of new systems such as digital track-and-trace. In order for healthcare supply chains to sustain resiliency, increased digitalisation needs to continue evolving across all healthcare settings, especially as pandemic events become more likely due to increased globalisation. 

Post-pandemic, we will almost certainly see the digitalisation of inventory management and requisitioning become more common. Digital inventory management and requisition systems enable a smart, standardised list of products to be created, meaning that hospitals can easily locate stock, monitor transit conditions and connect inventory to an automated database for routine replenishment, reporting and invoicing — all with minimal human input.

What are the key benefits of digitalising the supply chain? 

The value of supply chain technology has never been clearer, and in my industry, I’ve seen how it enabled healthcare providers to respond to fast changing situations. By digitalising inventory management, the most critical items can be replenished automatically when stock levels dip too low.

This has several benefits, from providing increased control and visibility to improving efficiency by allowing frontline staff to spend more time with patients rather than having to manually record and update inventory records. By integrating this with a streamlined inventory check system and using technology such as held barcode scanners, clinical staff can automatically update stock levels as and when they use medical equipment.  
 
How is this balanced with improving sustainability?

The key starting point is data. The pandemic accentuated the importance of data's role in healthcare and now procurement teams need to continue focusing on collecting, maintaining, and properly analysing reliable, reproducible, and secure data. This needs to cover everything from stock levels in hospitals to manufacturing output, so that healthcare providers can better manage inventory levels and predict disruptions. 

Technology has already put us on a path to knowing precisely what patients need, when they need it, and the best medical product or prescription based on an individual’s unique makeup. If the healthcare supply chain can continue embracing collaborative planning, forecasting, and replenishment, there will be an increased visibility across the supply chain for all trading partners longer term. 

How can businesses ensure they are making best use of this data?

If this information is routinely shared, and the data is interpreted and actioned across the supply chain, it can enable trend tracking and quicker responses to errors so hospitals can get ahead of consumption surges, reduce shortage risks, minimise disruptions and address real-time needs with increased agility. 

Predicting demand in this way means that hospitals can be prepared for changes while reducing the substantial amount of waste and needless expired hospital inventory. The more data and insight you have, the better the recommendations and results, leading to faster and more accurate decision-making, reducing waste, cutting costs, and improving the standard of care. 

Once this data is collected, it can be used to automate business processes which improves efficiency and eliminates waste. Using inventory data, stock usage and levels can be monitored in real time to track when a piece of medical equipment is used and automatically generate purchase orders when stock falls below a certain threshold.

Inventory tracking and using data for demand forecasting enables providers, suppliers, and manufacturers to see how much inventory they have, and how much they need on a simple, single platform. This means they can anticipate needs across the health system and manage stock levels to maintain sufficient resources, whilst avoiding over stocking which can result in unnecessary waste.  

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