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the impact of inflation, VPL analyzed more than 20 million healthcare shipments across multiple carriers using its Data Analytics and Visualization software, he notes. “Since 2019, national carriers have seen an increase in fuel costs between 167% and 241%. Overall, the average fuel surcharge cost has risen by 160% in the last five years. Furthermore, our data shows the average cost of shipment has increased up to 89%. These insights highlight the substantial effects of inflation on fuel costs and aver- age shipment expenses, emphasizing the importance of using data-driven solutions to help get visibility into these charges to optimize cost efficiency and improve bud- get decision making,” he added. Seif also lists burgeoning workforce chal- lenges, including staff shortages, issues related to employee retention and turnover, skill gaps, and the prevalence of work- force burnout.


“A study we conducted a few years ago revealed that a simple phone call from a buyer to a supplier, inquiring about ship- ment status, took an average of over 20 minutes,” he indicated. “We found that buyers may spend 50% or more of their day tracking down shipment statuses, while clinical staff may allocate 10% or more of their day to the same task. One of our customers conducted an internal study that found it costs $45 to track and trace a shipment for a purchase order. The cost impact is high. A health system that pro- cesses 120,000 purchase orders (POs) per year could be spending $5.4 million worth of time chasing down the status of the order. These pain points highlight the urgent need for improved processes and solutions in healthcare logistics – such as real-time visibility into order status and automating mundane tasks.”


Addressing the Achilles heel Mark Speight, COO and partner, Caduceus Medical Logistics, quotes British World War II Gen. Omar Bradley as having the proper mindset. “Amateurs talk strategy. Professionals talk logistics,” he reiter- ated and also declares that “fuel and labor costs are skyrocketing.” Consequently, healthcare organizations should refocus internally.


Mark Speight


“Healthcare providers should consider performing periodic system-wide assess- ments of same-day delivery needs and then optimize the requirements using comput- erized multi-constraint optimization,” Speight advised. “Candidly, the initial assessment can be a time-consuming and daunting task, as each delivery requirement


must be thoroughly understood and doc- umented to ensure effective optimization. Minutes matter, doors lock, overtime accu- mulates. However, when executed cor- rectly, we have observed savings of up to 10% through consolidation and reduced resource utilization. Subsequent quarterly or biannual optimization is indicated to combat bloat increase operational efficiency and, in collaboration with providers, seek creative solutions.”


Tom Redding, senior managing director, Healthcare Services, St. Onge Co., warns about what healthcare providers and sup- ply chain don’t see. “Healthcare providers have many blind spots (e.g., shipping visibility, track and trace, regulatory compliance, temperature monitoring, etc.) when it comes to the ever-complex web of moving materials


Tom Redding


from the manufacturer to the point of use,” Redding indicated. “As we all experience on a daily basis, shipping is the Achilles heel to effectively running an operation. Healthcare providers are no different and are spending considerable resources to address disruptions in deliveries. For example, some healthcare providers are building stronger relationships with their suppliers to drive better visibility to lead times and where products are manufac- turers to anticipate potential shipping dis- ruptions. Until healthcare providers shift from being a customer to being a partner, shipping visibility will be limited.” Relying on third-party shipping compa- nies has its pros and cons when it comes to buffering demand variability and min- imizing disruption for the supply chain, according to Redding. “In short, it could increase costs and create more complexity, but it does offer significant benefits for organizations that don’t have the scale to ‘buffer’ inventory on their own to minimize disruptions in manufacturing and/or transportation.”


Even in a “post-pandemic” environ-


ment, healthcare providers will continue to encounter freight/shipping challenges that may jeopardize access to goods and services and will need to be thoughtful about building in contingencies where they can, insists Cory Turner, CMRP, senior


direc-


tor, Healthcare Strategy & Product Marketing, Tecsys. “In our work with health systems, establish- ing a consolidated service center (CSC) is an import-


navigate disruptions in the flow of goods,” he indicated. “By centralizing resource allocation, optimizing the network and enabling real-time visibility, a CSC empow- ers healthcare providers to adapt and respond efficiently, accommodating spot shortages to essential goods and services, even under challenging circumstances.”


Making haste against waste While the pandemic may officially be over, Jake Crampton, CEO, MedSpeed, still sees its lasting impact reverberating through the industry, leaving behind profound aftershocks. “In the face of ongoing supply chain shortages and constrained budgets, healthcare executives have prioritized waste reduction more than ever before,” he observed. “Nothing can afford to go to waste. The significance of logistics has always been paramount for maintain- ing agility, but in these critical times, it has become absolutely imperative to facilitate the sharing of limited resources among facilities, encompassing supplies, phar- maceuticals, and equipment.” Labor shortages remain problematic, too,


Jake Crampton


especially among the clinical set, according to Crampton.


“With nurses in short supply, and more leaving the profession every day, help- ing clinicians to operate at the top of their license is critical,” he said. “According to a recent American Nurse survey, 87% said that medical courier deliveries — or lack thereof — impacted their work weekly. Those findings were echoed in another recent survey from CAP Today, which found 86% of lab professionals were unable to provide timely and accurate results for patients at least once a month due to cou- rier issues. An efficient and reliable logistics infrastructure is necessary to weather the labor shortage storm.” Three preventable or mitigable challenges fac- ing healthcare organiza- tions come to the mind of Norman Brouillette, senior vice president, Supply Chain Solutions, Retail, Tech & Health, Ryder System. They are “the lack of visibility across the supply chain, the need for guaranteed truck capacity with professional drivers with track records for dependable, on-time deliveries, and impacts of the worsening warehouse labor shortage,” he said.


Norman Brouillette Cory Turner


ant part of solving for that, as it provides a greater degree of flexibility needed to


Ron Devitt, founding partner, DeSpir, singles out the transportation sector as key, particularly among haulers.


hpnonline.com • HEALTHCARE PURCHASING NEWS • August 2023 35


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