Speaking of Supply Chain

The “Next Normal” – Moving Toward Business Recovery
4 Things SMI Members are Talking About Now

Nancy AndersonBy Nancy Anderson, Associate Executive Director, SMI

“What’s keeping you up at night,” was the question asked during a recent huddle call of SMI members as COVID-19 cases surge amid looming uncertainly around critical supplies. Members discussed the “next normal” and shared buyer and seller perspectives that supply chain trading partners don’t always get to hear from each other.

From this discussion, it become apparent that SMI members are talking about 4 major themes:

  • Sourcing, Selection, Shortages
  • Relationship Management
  • Modeling & Data Transparency
  • Government Engagement

Sourcing, Selection, Shortages

There are lots of creative discussions going on relative to sourcing and product selection as we move into the “next normal”.  From a provider perspective, members are talking about how to approach sourcing and product selection. They are considering how to adapt the flexibility of clinicians relative to product choice that has happened during the pandemic into a longer-term sourcing strategy focused on “source to spec” with key required product specifications rather than “source to preference.”  One provider posed the question “if this product was acceptable during the pandemic, why can’t it be our choice long term?”  Central to this approach will be achieving lower product cost with better outcomes, and analytics will be an even more important part of decision making than pre-pandemic.  Providers are also considering options to come together with other organizations locally or regionally to make bulk purchasing and storage more cost effective. 

As providers look at their ROI from a cost and outcomes perspective, suppliers will also be looking at their selling practices and adapting to this “next normal”. One supplier even noted that their organization has hired a health economist to help them understand how providers define value and help the supplier turn that value into an ROI.  Members are also concerned about product supply shortages during the coming months as we experience potential resurgence of the disease on our way to full recovery.  Providers shared frustration around convincing the C-Suite that they have enough PPE in inventory, and they expressed concern about storage and inventory turns.  Transparency with suppliers in filling orders and shipping is also still a concern that needs to be addressed as providers are still dealing with some issues where supply is “wobbly”.  Ultimately, it goes without saying that as we move through additional stages of this crisis, reliability of supply is critical to ensure the safety of staff and high-quality care for patients.

Relationship Management

Members also talked about the “next normal” and the impact on relationships.  Providers indicated that the pandemic has strengthened relationships with clinicians and resulted in better definition of clinical protocols.  That said, there is concern among both providers and suppliers relative to virtual interactions and an interest in getting back to at least some face-to-face meetings as soon as possible to maintain and strengthen those relationships.  While virtual relationships have offered some benefit, both providers and suppliers believe that they can’t replace the direct interpersonal exchange of an in-person meeting.  SMI members believe that the “next normal” will be a hybrid approach of the current, fully virtual interactions and a return to at least some in person meetings.

As we work to manage the morale, spirit, and connections of our teammates, we are also both encouraged and concerned about the flexibility that virtual working is creating.  While it does open up a whole new world of potential staff members for recruiting outside of our normal hiring area, it also exposes our current staff to the option of being recruited to work for companies located elsewhere. And as budget issues loom, we may have new positions created and others eliminated.  As leaders, we agreed it’s incumbent upon us to lead with clarity and purpose to keep all of our teams motivated and on track.  It’s a complex new world in so many ways and staffing and talent management is no exception.

Modeling & Data Transparency

As we move through the recovery phase of the pandemic, modeling will be critical to success.  Being able to think through possible scenarios and put together plans to address them is key to being prepared for the future state of healthcare and for future crises of any size and type.  SMI members talked about the need for improved analytics and better transparency between trading partners to facilitate faster problem solving as our businesses recover from this pandemic. The financial impact of COVID on all the players in the healthcare supply chain - providers, manufacturers, and distributors - is a related topic of great concern to SMI members.  Members in all sectors are dealing with financial challenges that are resulting in budget cuts, and models of how the “next normal” looks will be crucial to help us plan for success.  Modeling will help us all figure out the best options to cope with the challenges that we will face in the future.

Government Engagement

The need for engagement with the government was a key topic of conversation.  The recovery and migration to the “next normal” must include dialogue and problem solving between the government and private sector with hospitals and suppliers at the core of that connection.  Members do believe an effective national stockpile must be part of our planning and infrastructure going forward, and they believe it will happen most successfully as part of a private-public partnership based on strong collaboration. 

Regarding government engagement, SMI members also discussed the process of vaccines and how best to prepare.   Unfortunately at this point, there are more questions than answers, but both suppliers and providers have a role to play here, as the government looks to make, distribute, and administer the vaccine to the right people in the right sequence,  This could lead to a future SMI sprint initiative next quarter.

Members are tasked with all this change as they continue to address the needs of their organizations while serving clinicians and patients. Mergers and growth continue, and new IT systems are going in, all while we struggle with lost productivity and slowed progress on key initiatives we had going pre-pandemic.  We need to stay the course and focus on a future supply chain that is agile and resilient making sure we don’t lose the lessons of the pandemic.  Overall, SMI members believe that, in many ways, we will be better off after the pandemic than we were before, as we’ve certainly strengthened our ability to respond to a pandemic or other crisis.  We will create the “next normal,” by listening to each other and working together.

As always, we welcome your comments and suggestions.

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