Dated : July 6, 2020
As Bill Gates had foreseen, and rightly so, a certain Microbes are the cause for the global catastrophe we are in now ! And in the frontline of this battle is our Healthcare Sector. Now more than ever, we feel the need to empower our Healthcare system to be prepared for such catastrophes !
Let’s zoom out and take a look at what we have got …
THE PERSONNEL & RESOURCES AT STAKE
Healthcare supply chains are made up of patients, providers, payers, and suppliers. Different products these supply chains support are
Covid-19 has put Global Healthcare Supply Chains under pressure. To list down a few challenges…
THE SCARCITY & DEPENDENCIES
THE BIG QUESTION!
Commonly, the health care supply chain takes a fragmented & “fire-fighting” approach and the hospitals work in silos. How do we better equip ourselves for future disruptions such as this ?
In the Covid-19 outbreak, these Healthcare supply chains are on a mission. They are supporting clinicians in diagnosis, treatment, and prevention. However, as the crisis is still looming large, healthcare supply chains need to answer following question –
“How to sustain global supply of critical diagnostic kits, drugs, medical supplies, and equipment to treat patients in the wake of supply chain disruption?”
The answer to this question is further complicated by the actions taken to protect the interest of a region / nation such as restrictions on export of PPE. In future, this will force supply chains to build local suppliers to mitigate the risks. However, given the current situation, only short-term reactive measures can answer this question.
Apart from this, to improve the current situation of Healthcare supply chains, it is important to build resilience to mitigate the supply chain disruption created by the Covid 19 event, which is hard to anticipate and has high impact risk. Supply chains can be prepared with a set of Proactive and Reactive measures.
Healthy Reserves –
To be resilient, on a short-term basis – as a reactive measure, supply chains can build healthy reserves of parts with high recovery time.
Wherever Healthcare supply chains are competing against other supply chains for supplies, the supply may be ensured prioritization. To give an example, the production of N95 masks is hampered by the availability of melt-blown, nonwoven fabric. It is important to note that the healthcare products community competes with the consumer goods industry for this melt-blown non-woven fabric, as it is a key input into products such as diapers and sanitary napkins. In the case of shortage of fabric, based on N95 mask demand and rationing principle of inventory allocation, suppliers can act in favor of the medical product supply chain. This is also a short-term reactive measure.
Adding Redundancies –
In the long term, the supply chain can consider adding redundancy in the process. Redundancy can be in the form of stockpiling of inventory, implementing multi-sourcing strategies, and/or maintaining a contingency workforce.
Alternate Sourcing for Modular Products –
Apart from this, in the long term, supply chain resilience can be increased by introducing modularity in product design. Though Integrated products are very efficient but creating an alternate source for Integrated products is difficult. Whereas creating an alternate source for modular products is comparatively easy. This modularity can be used to increase the resilience of supply chains in the healthcare industry.
TECHNOLOGY TO THE RESCUE
While many healthcare supply chains have been able to meet demand from existing inventory, it is critical that companies use enabler IT applications like Supplier Segmentation and Scenario Modelling to fully understand their supply chains and identify their top products facing potential supply issues, with a perspective on next few months, taking into account potential, more aggressive scenarios. This involves,
Real-time Inventory Levels – Understanding inventory levels in full supply chain and adjusting to new reality
What-if Scenarios in minutes and not days! – Pressure testing supply chains with aggressive downside supply chain scenarios
Immediate Alternatives – Ramping up production at alternate source that are already in place
Allocations – Implementing an allocation process for affected products (for example – rationing)
Faster Initiatives – Initiating search for additional / alternate suppliers for critical APIs, raw materials or components.
Present day IT Applications enable real-time collaborations among departments, ensuring data update across the organization and keeping everyone aligned. This in turn, fast-tracks approvals, consents and decision making in Organisations. Decision making becomes easier when we have real-time data and analysis on hand.
A Supplier Segmentation and Network Optimization Apps, built using Enterprise Performance Management solutions can help Healthcare supply chains to become more resilient.
Supply chains across the globe have been disrupted. World economies are shrinking as nature gives out a stern message to mankind! Did any forecasting models pickup this unprecedented turbulence we are facing today(#COVID19)?
While the information flows within Supply chains are intact, money and material flows are severely impacted. Certain products have a sudden spike in demand while others have a sudden fall. It is a similar situation on the supply side; excess inventory of certain goods while we have severe shortages for others.
Most people started questioning the much talked about concepts of supply chain management like Lean, JIT, Outsourced manufacturing, etc. which were considered innovations at some point. There is this debate about whether Supply chains should be lean or agile or both. Demand and Supply variations are headwinds for any organization’s supply chain and most of it could be beyond their control. Many large enterprises have failed due to supply chain issues.
Having worked on many supply chain implementations across the globe, we have learned a lot from our experiences. We have seen what had worked and what did not. So, How do we build efficient supply chains that can be resilient? How do you vaccinate your supply chains so that they can withstand disruptions due to such pandemics or natural calamities?
Our prescription is simple.. it is a three-stage booster dose:
Booster 1: Create End to End visibility & Enhance collaboration.
All departments within your organization should have a unified view of all the plans within your organization.
There should be a seamless, reliable and transparent collaboration between all the stakeholders including your distributors and suppliers.
Regular cadence meetings to review market dynamics and internal constraints.
Booster 2: Implement Early Warning & Control Systems (EWACS) within your supply chains.
Large volumes of data are being generated every single day. This needs to be put to use for building prediction and prescription analytical models.
Setup standard KPIs across business departments and track anomalies in real-time. Run what-if scenarios to constantly evaluate the expected outcome.
Whenever anomalies are detected, quickly constitute task forces, empower them to make smart decisions like strategic sourcing, demand realignment, etc. that can minimize business impact.
Booster 3: Simplify your processes
Entangled business processes mean so much bureaucracy and so much more delay in decision making. Always stick to simplified/standard business processes and remove any unwanted process overheads.
Automation of all possible repetitive tasks so that focus can be qualitative actions
Periodically evaluate and refresh your core processes like new product introductions, network optimizations, planning, etc. for any further improvements based on industry best practices.
IT applications have a major role to play in keeping your supply chains nimble and resilient. They act as enablers helping in your preparedness. New generation Enterprise Performance Management solutions like Jedox have many great features and when implemented can truly help organisations be prepared for such disruptions.