STRATEGIC SOURCING & LOGISTICS still don’t have good demand signals, we


don’t reliably share information freely across all links of the chain and we have a lot of variability. There are places where JIT and stockless can and will work but it won’t work everywhere. Just like healthcare is moving more and more to precision medi- cine and patient-focused outcomes and treatments, we need to bring in a variety of tools and methods to manage our supply chains that support this delivery of care.” Rather than why JIT may no longer work, the real discussion centers on for what it specifically does and does not work. Some have a few ideas.


“While just-in-time inventories can be


cost savers and conveniences on typical days, they are very problematic in a pan- demic or another scenario that sees mas- sive demand surge,” noted James Ludwig, Vice President, Partnerships, Premier Inc. “Experience shows that for products needed in an emergency, a hybrid approach is probably necessary: Buyers carry in- house inventory on a just-in-time basis, while manufacturers and direct sourcing companies take a just-in-case approach, reserving capacity for surge, retaining safety stock, and building rapid replenish- ment channels for restock.” Ludwig cites Premier’s ProvideGx generic


sourcing program as one example where Premier requires manufacturers of critical products to source from multiple, diverse locations and carry adequate amounts of safety stock in exchange for long-term, committed-volume contracts. “In the case of COVID-19, ProvideGx validated that suppliers had four-to-six months of active pharmaceutical ingredients on hand, as well as four-to-six months of finished dose form products,” he said. “With safety stock on hand, it was possible to weather surge demand of more than 150 percent, even as health systems continued ordering just-in- time. This model works for low-margin generic drugs, suggesting it could work equally well for other critical, low-margin items.”


He also indicates that “greater intelligence


andimproved technology can help provid- ers estimate case load surge and automate the prediction of future supply needs. In


this way, ordering is more evidence-based, data-driven and rationalized to align with anticipated caseloads. Such systems exist today and will be crucial for rationalized buying in future emergency events,” he added.


“[JIT] can work for certain items like


drugs and other medical products, but pandemic-related items should have more safety stock, said ames Sembrot, Senior Vice President, U.S. Supply Chain, Cardinal Health. “At Cardinal Health, we’re also increasing safety stock of our raw materials and components used in manufacturing. This deviates from Kanban relationships we normally would have with suppliers and helps insulates us from significant disruptions if there are raw material issues.” Medline Industries isn’t necessarily seeing a shift away from or unwinding from JIT or stockless distribution methods, according to Peter Saviola, Vice President, ogistics and Supply Chain Optimization, but they do see the move to low-unit-of- measure from bulk deliveries continuing as “more of a hybrid approach that comple- ments JIT with a small cache of on-site inventory,” he added.


“Most health systems are now maintain- ing a 30- to 60-day stockpile, and looking to their distribution partners, like Medline, to have inventory available to compensate if, and when, needed. We are seeing this approach being taken across healthcare systems of all sizes – from small to large,” he said. Mike Henry, Managing Partner, Ron Denton & Associates LLC, calls for con- siderable dedicated supply chain soul searching among healthcare organizations to determine JIT’s prospects and relevance. “There’s a risk of conating different and largely unrelated issues here,” he indicated. “JIT, stockless and logical unit of measure programs should be viewed as a means of efficiently moving routine supplies to end use locations while reducing process redun- dancies and friction. These programs in no way preclude the provision for providers to plan for and maintain strategic contin- gency inventory. In fact, these programs can enhance those capabilities by freeing up space and other resources to focus on


contingency inventory and related pro- cesses. Supply Chain professionals should ask themselves: Are there routine tasks that we do every day that could be moved upstream in the supply chain that would free up our resources to focus on higher value activity?”


For JIT to experience a renaissance will require deeper and more intense col- laboration between provider and supplier, according to Jake Crampton, Founder and CEO, edSpeed.


“Even before the pandemic, there were


trust issues on supply availability and workarounds – desk/ceiling stock, for example,” Crampton said. “But acute safety issues like N95 shortages during the early days of COVID-19 touched a nerve, so establishing enough trust to move back to even a new and better JIT model may take some time. Supply chain teams left no stone unturned in their search for PPE for their clinical counterparts and learned many lessons about the need for previously unheard-of contingency planning proto- cols. To return to a JIT model, the supply chain will need to have full transparency with the clinical staff around the rationale for the change and the playbook if another COVID-like event challenges the supply chain in the future.” argaret Steele, Senior Vice President,


edSurg, Vizient Inc., admits that pre- COVID, she heard speculation that up to 70% or hospitals engaged in some degree of just-in-time or low-unit-of-measure ordering.


“Throughout COVID, we heard com- ments that supported the saying, ‘the only trusted inventory was a facility’s owned inventory,’” she said. “While we don’t envision these practices as dead, we do anticipate them evolving. Sequestered or protected inventory creates some additional assurance to those facilities looking to source in this manner. We’ve seen increased requests for dedicated space within a tra- ditional distributor’s warehouse to ensure protections and accurate inventory vis- ibility. Additionally, providers are seeking to secure secondary distribution partners to provide additional avenues in case of stockouts.” HPN


Just-In-Time’s popularity fades in struggle between other, emerging models


As healthcare supply chain professionals debate, discuss and even joke about “Just-In-Case” versus “Just Enough” versus “Just-In-Stock” as potential successors to the beleaguered “Just-In-Time” hyphenated model of low-unit-of-measure (LUM) distribution, Healthcare Purchasing News asked more than a dozen supply chain experts to pontificate about future models and potential solutions.


“With the adoption of analytics and the [consolidated service center] model, hospital supply chains are becoming stronger. I like to think we are moving to a ‘just what is needed’ approach. With demand planning


and forecasting, it gives us the power to be proactive versus retroactive. “More hospitals are getting to that point, but


that is a process too. It takes a culture shift to move from physicians and clinicians driving sup-


18 January 2022 • HEALTHCARE PURCHASING NEWS • hpnonline.com


ply levels based on gut instincts and the fear of running out, to where supply chain can leverage data and analytics to stock what is truly needed.” Cory Turner, CMRP, Senior Director, Healthcare Strategy, Tecsys Inc.


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