March 30, 2017
Column | outbound

When good needs to be better

Health care supply chains have some weak links. A new study suggests a digital fix.

By Mitch Mac Donald

All supply chains matter. All supply chains are important. Some, though, might be a bit more important than others.

As for why, it's all about the potential consequences of a supply chain disruption. For instance, if a retailer experiences a disruption, it might mean that a shipment of high-demand items gets delayed. Big deal. You can wait a day or so for that new, must-have smartphone to reappear on store shelves or the retailer's website.

Perhaps a bit more problematic is a supply chain disruption that results in the late arrival of materials needed for manufacturing. Yes, the line might be shut down. Yes, the company will lose some money, but still, no one is going to die (save for the possibility of the CFO's having a heart attack!).

When we say some supply chains matter more than others, we aren't speaking of consumers' inconvenience or a company's loss of revenue. We are instead talking of the vast and complex supply chains that serve the health care industry. In this sector, a supply chain problem can indeed be a matter of life and death.

So it might seem reassuring to hear that most of the U.S. health care professionals who took part in a recent survey by Dublin, Ohio-based Cardinal Health described their supply chains as at least "good." However, the story is a bit more complicated than that. When you start to dig into the results of the study, which was conducted among 403 hospital staff and decision makers, it becomes clear that hospital inventory management practices leave a lot to be desired. Despite their relatively rosy assessment of their supply chain processes, one in four hospital staff have seen or heard of expired product being used on a patient, and 18 percent have seen or heard of a patient being harmed due to a lack of necessary supplies. Not so good.

Perhaps not surprisingly, the study concludes that better hospital supply chain management would lead to better quality of care. "Supply chain management is not only a key business tool, but an essential component in supporting patient safety and care," said Shaden Marzouk, chief medical officer at Cardinal Health, in a press release. "Our survey found that many hospitals are experiencing patient safety issues that could be prevented through supply chain improvements."

The survey also found that supply chain tasks are affecting frontline clinicians. Physicians and nurses currently spend, on average, nearly 20 percent of their workweek on supply chain and inventory management. If they could reallocate this time, more than half said that they would spend this time with patients, while others said they would focus on research and education or training new staff.

These findings point to the critical need for a modern supply chain that is beyond "good." In fact, more than half of hospital staff strongly agree that better supply chain management leads to better quality of care and supports patient safety. They also largely believe the supply chain is critically important in addressing cost, quality, and patient satisfaction.

One solution to the challenge is supply chain automation and analytics, Cardinal said. The survey revealed nearly one-third of respondents haven't implemented a new inventory management system in at least six years, and another 25 percent don't know if it's ever been done. In fact, 78 percent are manually counting inventory in some parts of their supply chain, and only 17 percent have implemented an automated technology system to track products and inventory in real time.

"In a field like health care, driven by science and technological innovation, advanced inventory systems are the next frontier for improving care," said Scott Nelson, senior vice president of supply chain at Cardinal Health, in the release.

Let's hope the next frontier makes "good" even better.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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