STRATEGIC SOURCING & LOGISTICS Tom Redding, Senior Managing


Director, Healthcare Services, St. Onge Co., echoes the irrationality of decisions under duress. “We all know that humans are predict- ably unpredictable, yet we continue to think of ways to change human behavior to allow for better control of supply chains,” he said. “Successful supply chains have a clear understanding of their customer’s needs, wants and demands, and orga- nize activities to create end-to-end alignment. The issues around raw material sourcing, to ship- ping, to labor shortages is becoming the norm. The only way to manage


Tom Redding


through the various constraints is to better understand the demand side of the equa- tion, including variability and customer lead time sensitivities. If we have a clearer picture on the expected demand, then supply chain leaders will be able to assess where changes are needed to substitute products, consolidate products to meet the needs of their customer.”


The pandemic not only has challenged supply chain among hospitals but also the companies that provide products and technology services to those hospi- tals, according to Michael DeLuca, Executive Vice President, Operations, Prodigo Solutions Inc. “The past 18 months have put Prodigo’s tech-


Michael DeLuca


nology to the test,” DeLuca noted. “As we faced COVID-19 head on, our main priority was supporting our clients’ hos- pitals behind the scenes while they were unusually strained, just trying to execute on their day-to-day tasks. Our strategic partnership with our healthcare clients shed light on the hurdles that clinical staff, physicians and administration face every day when making the best decision, in that moment, for their specific organization. DeLuca sees supply chain’s reliability


as integral to healthcare service delivery and essential patient care. “Healthcare supply chain has grown by leaps and bounds and now has an increas- ingly crucial role in enhancing patient care and supply preparedness as the industry charges forward,” he said. “[It’s] what Prodigo sees as the linchpin in creating a long-term solution is resilience. It’s a resil- ient  exible, adaptable, reactive  supply chain that will in turn resolve this host of challenges and disruptions. Forming resilience into the healthcare supply


chain is critical in predicting disruptions, not reacting to them. A resilient supply chain will lessen the burden of external challenges and sort out those existing. Healthcare supply chain isn’t an easy egg to crack, so the first step towards resiliency is to surround yourself with technology leaders and industry experts. We need to act right, and act now.”


Balancing risk for reward Whether anyone agrees or likes it, supply chain represents a risky business due in part to a global reach motivated by eco- nomic advantage and should be managed as such, according to Steve Kiewiet, FAHRMM, FACHE, Chief Operations Officer (COO), CCS Medical, and Immediate Past Chair, AHRMM. “The linchpin here is the need to re-think how we evaluate supply chain risk and how the C-Suite evaluated the success of the supply chain orga- nization,” Kiewiet said. “We are in our current situation because supply chains and organizations became obsessed with lowering invoice cost of goods and services. Every contract renewal came with pressure to reduce the price and still maintain service and quality. This unrelenting pressure forced manufac- turers to find lower and lower costs for production and raw materials. The result being that the supply became more and more extended to China and other remote countries with the elimination of redun- dant sources for goods.” Kiewiet is familiar with the push and pull of supply and demand with a decade-long service record as a Navy Hospital Corpsman who then served as a paramedic, then spent a number of a years in sales and operations for a variety of companies that included PSS World Medical Inc. and Cardinal Health before leading Supply Chain operations at BJC HealthCare and then Chief Commercial Officer at Intalere, which was acquired by Vizient last year. “It is time to re-educate and re-orient ourselves and our C-Suites around the virtues of balancing cost and risk,” he continued. “We need to find other ways to make healthcare more affordable without simply asking suppliers to charge less. Focus on the total cost of care and the total cost of supplies and services. For example, in a total cost, balanced scorecard equa- tion, it is better to pay more for some goods and services that are produced in your community? Maybe. The point being


Steve Kiewiet


that supply chain need to be measured by more than one metric and not every metric should be cost-focused.”


Peter Saviola, Vice President, Logistics


and Supply Chain Optimization, Medline Industries, hesitates to attribute current supply chain woes to a single cause. “There isn’t necessarily one linchpin


that needs to be solved first, but rather multiple weak links that should be addressed simultane- ously,” Saviola insisted. “Things like fuel cost uc- tuation, government intervention and panic buying are common reoc-


Peter Saviola


curring challenges in the supply chain, and the supply chain typically can account for these issues. However, what the indus- try is experiencing now is a supply chain that is completely out of balance, compo- nents of the supply chain are out of sync – for example not enough empty shipping containers to load goods to, and once goods are loaded there’s not enough empty trailer chassis to place the full con- tainers on, and so on. On top of all of this is an overall industry labor shortage that expands across all components of the sup- ply chain. This may be the most pressing issue when it comes to course correcting the overall supply chain.”


Jim Mullins, Senior Vice President, Global Supply Chain, Henry Schein Inc., homes in on the labor shortage as having the greatest impact to the supply chain. “Labor impacts every part of the supply chain from manufacturing, warehouse workers, truck drivers and port employ- ees,” he said. “The labor participation rate has declined since the begin-


Jim Mullins


ning of the pandemic, and this has wors- ened the supply chain shortages. Contributing factors to the labor shortage include, mismatch in skills and openings, wages, COVID-19 health concerns, gen- eral healthcare needs, early retirement and other sources of friction in the market.” And where that labor crunch is most acute should be the target to tackle, according to James Sembrot, Senior Vice President, U.S. Supply Chain, Cardinal Health Inc. “Our priority should be


on the ports and related issues with trucking,”


James Sembrot


Sembrot urged. “We must improve the scheduling software, and we need support


hpnonline.com • HEALTHCARE PURCHASING NEWS • January 2022 13


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