How to Build a More Resilient Healthcare Supply Chain
Healthcare supply chains have been one of the dominant news stories this year, not just within the supply chain industry but right across mainstream news sources around the world. The healthcare industry has relied on a Just-in-Time (JIT) distribution model for more than a decade but, whilst this helped the industry control costs and reduce waste, the processes and technology supporting JIT were simply unable to meet the demands placed upon it during the pandemic. COVID-19 has, without a doubt, challenged the industry to reconsider its definition of supply chain resiliency. Based on insight from a tumultuous year, here are four areas the healthcare industry needs to focus on to build a more resilient supply chain to deal with future health emergencies.
Streamline and digitise essential procurement processes
Everybody knows that manual procurement processes involving paper, email and fax documentation slow supply chain activity, especially during unexpected peak demand. Yet some processes are still yet to catch-up to the latest technology.
At the height of the crisis, manual processes led to lack of clarity on order status, anticipated delivery timeframes and supply allocation needs. Providers who had previously invested in automation were more capable of understanding these factors that drove care delivery and purchasing decisions.
Now is the time to implement a complete transaction management strategy to streamline provider/supplier communications in a compliant fashion and automate order placement, confirmation and payment processes. Not only does streamlining transaction management save time, lower risk and reduce manual error, but it also offers greater visibility into the status of orders and supplies, supports remote working environments and creates a foundation of data to drive planning and allocation algorithms.
Use data and automation to ensure sufficient supplies of critical PPE and medication
As healthcare suppliers and providers look to minimise risk and learn lessons from the pandemic, many are focusing heavily on data and automation to ensure they are adequately prepared for future spikes in demand for critical supplies.
New requirements set by providers’ supply chain teams include having access to current and consistent item-level detail on products including item cost, on-hand inventory levels and standardised substitutions. In support of this, they are building alternative supplier lists and virtualised item masters that are then integrated into their IT systems. These lists are integrated into flexible cloud-based systems that make it easy to quickly pivot and procure the same or equivalent products from new vendors. From an automation perspective, they’re prioritising processes that create the foundational data to power demand planning models and secure collaboration with everyone from supply chain administrators to value analysis teams, in order to make data-driven decisions quickly.
Ultimately, these data requirements, coupled with automation, help guide purchasing decisions that balance the best interest of patients with supply chain resiliency and potential financial impacts.
Establish and enforce effective facility access procedures
This is one area that has become harder due to the pandemic. Protocols are highly fluid based on evolving government mandates as well as the types of facility and its associated entry requirements. All of these factors affect how, when and where providers and suppliers interact.
Healthcare providers should evaluate the effectiveness of their current facilities access procedures and lessons learned earlier this year. It is critical that they update their policies to reflect COVID-19 requirements and make sure they’re easily accessible online to avoid any confusion when vendors arrive. Leading providers are deploying a mix of health check attestations, temperature screening and mobile capabilities to be prepared to quickly shift gears in order to respond to any changing dynamics presented by health crises.
Prepare your financial system for crisis
Earlier this year, cancelled surgical procedures due to COVID-19 put financial pressure on healthcare providers. Additionally, higher demand for PPE led to unexpected costs. As healthcare providers and their suppliers have noted, proper planning relative to supplier payment processing and working capital is critical to ensuring operational integrity. Armed with knowledge and experience, providers are preparing their financial systems, and should be looking to use technology to facilitate the exchange of payments in a more expedient fashion – one that creates a balanced financial equation for both providers and suppliers.
Many in the industry admit that a more resilient supply chain comes at a higher cost, but by leveraging financial automation, providers and suppliers can offset some of this increase. For example, by adopting electronic invoicing, healthcare suppliers and providers can facilitate remote working environments, provide greater visibility into payment liabilities and ensure payables meet invoice deadlines to avoid any hold-ups in product delivery. As the pandemic continues into the new year, this method will also offer vital touch-free alternatives to the traditional paper and pen methods.
Suppliers and providers should also look to expanded payment options such as dynamic discounting and variations on credit cards for more flexible and efficient management of cash and capital. The flexibility of expanded payment options can make a big difference in a time of crisis to both providers and suppliers.
Building More Resilient Healthcare Supply Chains is Achievable Now
The supply chain will continue to evolve and respond to the needs of healthcare providers and suppliers. The pandemic has taught the healthcare sector a number of lessons and, if it takes note of the need for digitalised, automated supply chains now, the industry will emerge from COVID-19 with a more resilient supply chain ready to take on any future medical challenges.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.