Just in place

Nov. 23, 2020

Certainly you’ve heard the joke by now that defined much of the pandemic-stricken 2020 for those in supply chain.

It goes like this: What did the materials manager say when he jumped out of the closet? SUPPLIES!

Let the pun-like double entendre sink in for a moment. If you get it, shhh! Don’t tell anyone - not a PPE out of you! If you’ve never heard this one before, don’t worry … I made it up.

Supply chain leaders and professionals definitely needed to demonstrate their creativity this past year.

A growing number already have as we’ve profiled throughout the year, including the award-winning HPN Hall of Fame team at M Health Fairview led by LeAnn Born; the award-winning HPN Hall of Fame team at Dartmouth-Hitchcock led by Curtis Lancaster; his compatriots across the border at University of Vermont Health Network led by Charlie Miceli; and scores of others at HonorHealth, Geisinger, CHRISTUS, Banner, INTEGRIS, St. Luke’s and UPMC just to name a few.

One of the key questions emerging from the shortage and backordering of supplies is what the pandemic reactions will do to stockless, modified stockless and just-in-time (JIT) distribution and inventory models. How will they be redefined? Or discontinued? Replaced? With what?

How about just-in-place (JIP) distribution and inventory?

Back in the 1960s, Charles Housley, the healthcare supply chain Hall of Famer (Bellwether Class of 2008) boasted about the benefits of stockless distribution at his hospital. The running joke at the time by critics? His distributor’s warehouse resided across the street from his hospital.

Insert the pandemic-motivated laugh track used in empty sports stadia now.

Still, under JIP distribution, this model shouldn’t be so far-fetched. In fact, it’s nothing more than a hub-and-spoke concept on antiviral steroids.

More than five decades ago, unless a distributor inked a lucrative long-term deal with a hospital it made little financial sense to pepper the landscape with warehouses or even “pop-up” storerooms akin to those retail outlets that sell discounted Halloween costumes from recently vacated buildings.

These days, however, with the proliferation of Amazon and its effects on FedEx and UPS, along with that successful retail Halloween model (e.g., Spirit Halloween, Halloween City) and further development of online commerce as well as the consolidation of distributors, it makes a bit more sense.

With the JIP model, the distributors could become the product and service heroes that providers need when demand far outpaces supply, courtesy of a panic-stricken public and a lack of planning. Further, the distributors politically can reinforce local and regional stockpiles and use information technology to rotate stock around to scores of public and private provider organizations that will reduce obsolescence and waste (think expiry dates).

John Gaida, another healthcare supply chain Hall of Famer (Bellwether Class of 2018), once invested in a vacated department store facility to use for his hospital system as an “off-site” warehouse.

Bottom line? The model’s been around for decades. Someone just needs to dust it off, polish the chrome, install a few enhancements and update it for the 21st century. It’s doable. And at this point, decidedly needed.

Need a pick-me-up? Start humming a personalized version of R.E.M.’s famous song with a twist … “It’s the end of the year as we know it … and I feel fiiiiine!”

Then click on SMI’s nod to the healthcare supply chain on October 7 by Christine Dean and Nancy Anderson (“Honoring You – Our Healthcare Supply Chain Heroes,” https://www.smisupplychain.com/draft-sosc?tmpl=component) as well as what Bellwether League posted back on March 20 (“Hall of Fame for Healthcare Supply Chain Leadership salutes everyone doing their part, making a difference,”  (http://www.bellwetherleague.org/media.html).

Contrary to critical belief, the supply chain isn’t broke. Nor is it a joke. The supply chain merely needs to bend, and supply chain leaders just need to be ahead of the curve.

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].