SPECIAL FOCUS
kind of technology-driven visibility allows companies to conduct what-if analyses for different regions and work with suppliers in these regions preemptively to protect supply lines.”
This strategy shouldn’t break the bank as others might, Vakil insists.
“The investment required in supply chain
monitoring and mapping is considerably lower than some of the other technologies – 3-D printing, for example, requires millions of dollars in investment – but provides an almost immediate ROI. What’s more, map- ping and monitoring capabilities already exist, and for a few hundred thousand dol- lars, you can have a thoroughly mapped supply chain.” Up next Artifi cial intelligence (AI). “AI has tremendous potential to impact
the global supply chain,” Vakil continued. “It can do this by taking over time-consuming and error-prone manual work. AI can more effi ciently predict demand, improve delivery times, reduce costs and take over customer support roles. When it comes to supply chain monitoring and risk mitigation, AI is able to scan through millions of news sources to identify disruptive events and from there, identify the region or suppliers that could potentially be impacted. “To ensure supply chain resiliency, com- panies need to be able to detect problems promptly, understand the impact and act quickly,” she added. “The way to achieve this is by leveraging AI and machine learn- ing to ultimately reach a level of automation where decisions are made, based on data by machines, in a split second.” Completing the trinity? Predictive analytics. “Much like AI, predictive analytics can and is having a positive impact on the supply chain,” Vakil said. “When it comes to sup- ply chain risk management, with predictive risk capabilities, organizations can prepare in advance to avoid allocations and idle pro- duction lines, as well as protect their Order Fulfi llment Cycle Time and Perfect Order Fulfi llment Metric, ultimately saving tens of millions of dollars.” It’s all about timing, according to Vakil. “In a typical supply chain disruption scenario, all mitigation activity happens after the dis- ruption occurs; the chances of recovery are signifi cantly reduced,” she noted. “By lever- aging predictive analytics, companies can get alerts about a new, potentially disruptive event anywhere in the world, predict impact likelihood, predict which suppliers are most at risk of delivering late and by how long, identify how affected suppliers will perform and propose a risk-mitigation action plan.” But Vakil remains realistic about what’s really fi rst and foremost on supply chain
minds: Distribution strategies that involve multi-sourcing and safety stock access as well as domestic sourcing to avoid global shipping and transport challenges.
“For healthcare systems that relied on one primary supplier for their main products, COVID likely halted production facilities at one or several points, leaving the orga- nization scrambling,” she said. “This is why we’re currently seeing procurement professionals working closely with sup- pliers. A 2021 Gartner study revealed that companies are very actively investing in more profound and more collaborative sup- plier relationships. According to the report, 77% of companies said they are investing in the short term for supplier relationship and resiliency.
“The shift to domestic sourcing is currently happening as well, with many companies investing in manufacturing PPE and other products in the United States,” she continued. “COVID-19-induced supply chain disrup- tions in China – which led to the inability for the U.S. to receive critical shipments of PPE – brought the conversation mainstream. However, there have been growing business reasons to have a diversifi ed strategy since well before the pandemic: Rising labor costs, human rights issues, tariffs and geopolitics are all playing a role.”
Chris Luoma, Senior Vice President, Global
Product Management, GHX, maintains his own longer-term triple aim with shorter-term dual tar- gets hitting the ground fi rst. Luoma recommends
healthcare organizations modernize data manage- ment practices by creating a solid foundation of data that is continuously updated to improve operational efficiency and performance. “This is particularly important as hospitals and health systems could face a total revenue loss between $53 and $122 billion this year due to the pandemic,” he said. “They simply can’t afford to make decisions founded on bad data.” Healthcare providers also must leverage tools and approaches to help minimize and avoid supply chain disruption, such as predictive analytics and sharing data with the organization – between supply chain, fi nancial and clinical teams and with other local healthcare providers, he suggests. Further, they must implement technolo- gies, such as bar codes, smart labels, robotic process automation (RPA) and AI to help automate manual and tedious processes, according to Luoma. This, in turn, will enable highly skilled supply chain professionals to focus on more value-added tasks like patient care transformation, he adds.
Chris Luoma
Realistically, however, Luoma believes supply chain professionals will rally around two areas: Revamping distribution practices and tapping into the power of RPA, because the others require the creation of “net-new infrastructure” that involve resources and time, both in short supply.
“The industry is looking for quick wins after the setbacks it experienced throughout COVID, and these actions can help deliver,” he assured.
“On the distribution side, providers are exploring how to better avoid stockouts or backorders that affect or delay patient care without carrying costly, excess inventory. The most common strategies are leveraging multiple distributors and requiring alloca- tions,” Luoma said. “However, we’ve also seen the creation of regional collaboratives where geographically close providers trade supplies to help build up safety stock. Living stockpiles are also being explored and there has been renewed interest in domestic pro- duction, such as HCA Healthcare’s venture with A Plus International. And providers have become their own manufacturing source, such as Ochsner Health, which will now make its own PPE.
“On the technology side, RPA isn’t new to the healthcare supply chain, but COVID has undoubtedly accelerated the need to automate,” he continued. “We saw fi rsthand the crippling effects of a rigid infrastructure that was unable to quickly pivot when opera- tions had to move virtually. As the healthcare supply chain focuses on improving agility and resiliency, there is a lot of conversa- tion around digitization and the need to improve quality, operational effi ciency and productivity. This is why RPA is one of the fastest-growing software markets.” Shawn McBride, Vice President and General
Manager, Cardinal Health WaveMark Supply Management Workfl ow Solutions, opts for three approaches that should be among the fi rst to be adopted during the ongoing pandemic but be enabled two other priorities. Radiofrequency identification (RFID) represents the “most effective” tool to auto- mate signifi cant data capture, according to McBride. “It also enables workfl ows that support clinical and supply chain teams to capture and document product disposition throughout the supply lifecycle from receipt to use,” he noted. “This turns your supply chain into a strategic asset with accurate, real- time data, and gives you access to insights that support decision making.”
With more intensive reliance on automa- tion comes the need for data protection, McBride insists. “Cybersecurity software is a requirement to operate in today’s digital world and to ensure business resilience,” he
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