Minding targeted future-ready supply chain prep

Sept. 28, 2021

Healthcare Purchasing News asked more than a dozen supply chain executives to share how their companies are guiding and helping their provider customers to become more future-ready with their supply chain operations through future-minded practices, processes or products. Their stories range from customer case studies to product development.

“During the peak of the pandemic, we worked diligently to improve our analytics to broaden the visibility into the inventory contained within a hospital or health system. One of our customers, a large health system on the East coast, implemented our system to gain visibility into what inventory they had on-hand, how fast they were going through it, when they might stock out, and how it was being used. They needed to do this across all of their hospitals to give staff the ability to key in an item, to instantly see it across the health system and then to drill down into that item by hospital and stocking location.

“The end goal of this was to reposition inventory within their health system to avoid costly stockouts that were putting patients and staff at risk. The client was able to achieve this without the investment in costly data warehousing tools and hiring staff to build reports. Jump Technologies was key to this process by providing the simple point-of-use technology that was integrated into the client’s Infor ERP platform. Today, the integration of our platform gives them confidence that they will have future systemwide visibility into the inventory they have and how they are using it, so that they can react quickly to avoid stockouts that impact patient and staff safety.”

John Freund, Jump Technologies   

“GHX and Expression Networks recently announced their vision for improving national emergency response through the use of predictive analytics. [Editor’s Note: See https://hpnonline.com/sourcing-logistics/21233937]Predictive analytics can help inform planning, demand forecasting, distribution strategies and real-time emergency response. The engine GHX and Expression Networks are building is intended to help the government better identify where and when surges are happening with near real-time visibility and inform decisions such as how and where to deploy the Strategic National Stockpile (SNS) repository.

“On the same topic, Owens & Minor also recently debuted its new online emergency tracker to support their customers in the event of natural disasters as well as other unforeseen circumstances that threaten to disrupt the supply chain. [Editor’s Note: See https://hpnonline.com/21234617]

“The key to both initiatives is leveraging robust data sets to drive data-driven decisions and improve supply chain agility and resiliency.”

Chris Luoma, GHX 

“[It’s] the creation of a digital supply chain that utilizes a trusted platform to share data across the point of manufacturing to the point of care, ultimately supporting improved patient care, reduced waste and increased staff satisfaction. This investment in a centralized, system-wide management process and a clinically integrated strategy supported by data and analytics provides bi-directional access to insights previously unavailable to providers and manufacturers.”

Shawn McBride, Cardinal Health WaveMark 

“A leading manufacturer of over-the-counter (OTC) pharmaceuticals and consumer healthcare products serving virtually every major retailer in the U.S. with operations encompassing 12 warehouses and 1.2 million sq. ft. of space in California, Florida, New York and South Carolina, delivers approximately 50,000 shipments a year to well-known retailers and wholesalers, such as Walgreens, Target, BJ’s Wholesale and Rite-Aid Pharmacy.

“Its transportation team was working in a decentralized manner, with carrier routing decisions being made by staff at each of its locations that were relying on multiple, non-integrated systems to manage their work. The company’s existing system provided carrier rating support with limited load and mode planning for LTL (less-than truckload) and truckload shipments but lacked small parcel rating and shipping capabilities. Additionally, the system did not provide carrier times-in-transit to support accurate delivery planning. Freight audit and invoicing was handled on two disparate systems, which resulted in extra steps to merge invoicing data for analysis.

“The company chose Logistyx TME with its multi-carrier parcel shipping network and Business Intelligence to improve shipping capabilities, workflow, and business decisioning. This choice paid major dividends:

• Recovered $1.5 million in transportation savings

• Centralized shipping on a single platform for all modes, managing 30+ carriers with real-time data visibility for enhanced decision making

• Enabled the upload of all order and shipping data to a central dashboard

• Enabled planning to be managed by two staff members instead of five, allowing the company to allocate resources to other lead roles and curtailing the need to add staff to fill those roles

• Eliminated the need for the A/P department to process 50,000 carrier invoices a year

“This is just one example of many companies, healthcare or otherwise, recognizing a need to modernize and improve their shipping operations to address inherent fulfillment challenges that existed before the pandemic but that take center stage any time disruptions wreak havoc on supply chains.”

Ken Fleming, Logistyx 

“The feedback from our members, suppliers and our advisory councils has been abundantly clear – we need to think differently to revolutionize and tech-enable the procure-to-pay space (P2P) to drive efficiencies that can scale. The average provider nationally sees error rates between 5 and 15% with respect to their invoices. As one example, these errors alone led to nearly $10 million in overcharges for a provider that historically used platforms that the industry has apathetically accepted as the gold standard. Extrapolated across the U.S. healthcare industry, this equates to somewhere between $4 billion and $6 billion in invoice-specific errors that should never have occurred. This issue commands industrywide attention, and Premier is answering the call.

“Backed by Premier’s AI-driven technology capabilities, we’ve developed the Remitra P2P platform that seamlessly automates healthcare financial processes to reduce waste and save time for both healthcare providers and suppliers. 

“From contract compliance to order input, price validation, delivery verification, order reconciliation and payment, Remitra consolidates and digitizes every step into a cloud-based platform that integrates with any enterprise resource planning system (ERP). Despite being owned by Premier, it is GPO-agnostic. It harnesses the power of AI to automate and digitize the entire accounts payable and accounts receivable flow increasing efficiencies and improving visibility into a health system’s total spend, while allowing suppliers to intelligently regain control of accounts receivable. 

“Innovative, healthcare-specific purchasing and payment solutions are poised for continued growth as organizations across the industry are seeing significant success in drastically improving​ cash flow​, labor efficiencies and supply chain integrity.”

Chaun Powell, Premier Inc. 

“In early 2021 Resilinc launched a Predictive Purchase Order On-Time Delivery tool. The artificial intelligence (AI)-powered tool predicts how a supplier will perform – in the face of disruption – by analyzing past events and on-time delivery data. Armed with this data, organizations can plan for and mitigate risk before disaster strikes, protecting continuity of supply and avoiding execution delays.”

Bindiya Vakil, Resilinc 

“AI has huge potential in the market, and it’s something we’re implementing to see the whole supply chain from beginning to end. This technology is crucial, especially amid a crisis like a pandemic, as it lets you understand and anticipate problems before they happen and causes less disruption to operations and overall better customer service.

“Additionally, domestic sourcing to avoid global shipping and transportation challenges is critical in the time we’re facing today. While this can be most costly, with uncertainty in China and the aging workforce with the younger generation not as robust, we have to employ better options domestically or in Mexico. Relying on ships to bring us 80% of our products is and ‘all eggs in one basket’ approach, and in times of need, having to air freight key items can put you in a bind.”

Pete Brennan, Cardinal Health

“As it relates to demand management and developing a flexible and adaptable supply chain inventory deployment strategy, we recently completed a project with a large health system that was exploring options to better leverage its network through active demand and inventory management. 

“The charter of the effort was to develop an inventory deployment strategy to actively determine what products and inventory levels should be stored locally at each hospital and centrally. To truly define the inventory strategy, it was imperative to get a clear understanding of the demand channels & profiles and how it may vary throughout the network and over time.   This included understanding how the point-of-care inventory levels created the potential for STAT supply orders during off-hours.

“Recognizing the demand varied by site, including what items were stocked at each site, created its own unique challenges to develop an inventory deployment strategy that was driven by demand management. The outcome of the project was to develop a dashboard that incorporated the following:

• Inventory purchase orders

• Storeroom issues (routine and STAT orders)

• Storeroom fill-kill rate

• Distributor and manufacturer fill rates

• Unit-of-measure requirements

• Product criticality

• Product commonality

• Product category

“The dashboard was real-time and could be leveraged at a pre-defined interval to assess if the inventory deployment strategy was still appropriate. If changes were suggested, the dashboard would identify where the product should be stocked and the inventory level to account for changes in product availability and variability in demand.  

“The secondary benefit for the dashboard was to potentially identify where similar products could be standardized to streamline the inventory deployment strategy to ensure product availability.”

Tom Redding, St. Onge Co. 

“In fact, we work with health systems across North America to implement solutions that stitch together process and technology in what we refer to as clinically integrated supply chain operations. Mary Washington Healthcare, for example, is outfitting its nursing and procedural areas (operating rooms, catheterization labs and interventional radiology rooms) with technology designed for clinically integrated workflows in each area; these technologies include a combination of enabling software, RFID and bar-code technology, handhelds, mobile devices and embedded [user interfaces]. By leveraging motley process technologies at the point of use, we help design workflows that ease the burden on clinical personnel in performing supply chain-related tasks while strengthening the quality of inventory data so materials management can service their customer, the clinical staff, better.

“In the healthcare industry, we are admittedly a little shy when it comes to bleeding edge technologies. We want the kinks to be ironed out before we introduce them into a process that, at the end of the day, impacts patients. But proven and industry-tested technologies like mobile, RFID and bar code are very much mainstream, and now it’s about integrating them meaningfully. To me, that means laying the groundwork for process-oriented automation that lets different stakeholders focus on what their primary objectives are, whether that’s operations, clinical, financial or otherwise.”

Cory Turner, Tecsys Inc. 

“At Terso, we’ve been centered around implementing RFID-enabled cabinets, refrigerators and freezers to control critical medical inventory and implants for more than 16 years. We recently announced the placement in our 1,000th healthcare facility, which we’re very proud of. However, one solution that we’ve recently deployed which had a more ‘operational’ benefit was our work in tracking surgical loaner kits through their processing cycle with RFID. This solution has allowed operational staff know at what stage of its journey a particular kit is at, and if it is in high demand, allow it to be processed and turned more quickly, increasing its utilization rate and enabling it to be at the location where it’s most needed.”

Jason Rosemurgy, Terso Solutions 

“Supply assurance is a simple concept and not new, per se, but the way to accomplish that has changed significantly. The usual and customary practice of looking at par usage, and having some additional manufacturer/distributor allocation available, just does not work in a dynamic environment of the likes we have seen throughout this pandemic. To address the challenge differently, healthcare organizations have put a significant emphasis on predictive analytics to gain a better understanding of what products will experience high usage and how many will be needed by which parts of their organization. Additionally, many of these organizations have successfully implemented RFID technology to track and manage products at multiple locations within their network minimizing overstocking at specific locations.”

David Gillan, Vizient 

“Wearable technology, including wrist-worn computers, finger-worn scanners and voice-directed wearables are widely used throughout the healthcare supply chain. More recently, we’re seeing companies combine wearable technology with autonomous mobile robots (AMRs), which are a type of ‘cobot’ designed to improve productivity and order response time. Wearable technology optimizes the interactions between the pickers and material handlers. By integrating AMRs into the workflows, companies can remove non-value-added travel time from the process. The effect is to improve response time, increase throughput and to reduce the overall physical effort required from the pickers. This helps reduce fatigue and improve job satisfaction for the workers.”

Mark Wheeler,  Zebra Technologies 

“There has been a significant increase in the desire and need to reduce the effort required in the supply chain. There’s a lack of supply chain systemization that has put pressure on staff to balance supply maintenance and patient care. As a result, clinicians spend more time locating supplies. Healthcare systems are looking for product delivery methodologies that require less touch points and are more streamlined. For many health systems today we provide ‘Put-Away-Ready’ deliveries, which is typically department-specific orders delivered on carts by internal delivery route. Products are unboxed and shipped in totes on carts that can be wheeled directly to their final destination at the facility and are ready to be placed directly on shelves. We use a cart that connects to a robot for some health systems to help streamline and simplify the labor effort required for the ‘dock-to-stock’ process.”

Peter Saviola, Medline 

“McKesson’s global sourcing team consists of more than 100 employees, working across 250 factory locations, committed to meeting with suppliers, understanding the flow of materials and production activities, and monitoring conditions at the point of manufacturing to ensure quality standards. 

“We were well positioned – even before the pandemic – to provide our customers with this level of global quality control and are proud to continue that dedication as we have shifted our operations and strategic sourcing efforts to support a more diverse product/supplier portfolio. 

“We have a strong supplier on-boarding process in place, vetting many of our overseas suppliers and products that are a part of our McKesson brands portfolio, including routine, rigorous on-site inspections of several manufacturer sources. Our Top 200 manufacturers are also held accountable with a monthly scorecard that measures their performance on inventory, electronic data interchange (EDI), contract administration, trade payables and other master data categories.    

“Our goal is to provide our customers with high-quality products from socially responsible suppliers. Due to our strong due diligence and vetting processes, we’ve maintained our quality control commitment to our customers and their patients.”

Greg Colizzi, McKesson Medical-Surgical 

“Volatile market dynamics and poor demand visibility make it increasingly difficult for organizations to sense and respond to changing customer needs. Collaborative planning, forecasting and replenishment (CPFR) provides a framework for improved demand visibility and responsiveness.

“Customer collaboration is frequently driven by other parts of the organization, with the supply chain only responsible for execution or for ad hoc activities. Failure to link between customer collaboration and the S&OP (Sales and Operations Planning) process hinders getting the benefits of collaborative planning with customers and puts the relationship with customers at risk.

“Establishing a CPFR process requires time and effort to build an ongoing relationship and a successful process. Investments can be seen ineffective if there is no clear roadmap and a continuous improvement process to build this two-way relationship.

“We establish the CPFR process with key customers by following a structured framework that includes a segmentation strategy and aligns the organization objectives and desired business outcomes of both businesses. This approach leverages customer market insights by utilizing the CPFR process outcomes within the S&OP and S&OE processes. It also builds a win-win relationship with customers by following and implementing a mutual continuous improvement CPFR process. Overall, this leads to improved and more consistent service levels, proactive and predictive inventory health, and optimizes product formulary and spend.”

Pete Bennett, Cardinal Health

“The ‘invisible supply chain’ is a compelling subject that we obsess over on behalf of our customers. No one likes to stop, assess the quantity they need, carefully review a detailed description, insert a payment method, and track an order to ensure they received what they delivered. At Amazon Business, we love providing an experience where our customers have the supply they need, in the right specifications and quantity, without requiring overly complicated management.

“Organizations will always need orchestrators of supply selection and accountability behind the scenes – but end-users have an opportunity to immerse themselves into their work requirements without having to manage supply chain at the same time. While auto-reorder hardware and software are a beneficial technology today, they are often blunt tools for its future potential. Amazon has had forays into auto-reordering (e.g., Dash Smart Shelf, Subscribe and Save, ERP API triggers), but it’s exciting to envision how the ‘invisible supply chain’ will evolve for both personal and professional use.”

Bill Kopitke, General Manager, Amazon Business Healthcare

“Data is at the core of our business. With the availability of cloud services, BroadJump development focused on leveraging Human in the Loop Machine Learning (HILML) to efficiently scale the processing and enrichments of the data our clients provide. Unlike pharmacy where NDC creates a standard product identification code across multiple hospitals, there is no such standard in supplies or services. This lack of standardization causes significant issues when trying to combine data across multiple hospitals, or to do comparative analytics across healthcare systems.

“We focus a significant amount of our development efforts on utilizing AI, HILML and mathematical algorithms to assist our data quality team in identifying anomalies and outliers in the data. By utilizing these technologies, we’ve greatly reduced the amount of data that must be manually reviewed, allowing us to scale our solution, and to spend our time focusing on producing high quality, enriched data that can be used throughout our solutions. This data powers solutions that our clients have utilized to drive over $200 million out of their non-labor expenses in 2021 alone.”

Greg Corban, BroadJump 

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].