DC Velocity - April 2017

64 DC VELOCITY APRIL 2017 www.dcvelocity.com 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 nurs-
es 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 that the sup-
ply 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.