Top Challenges for Healthcare Supply Chains During Pandemics

Since the COVID-19 outbreak, healthcare systems have been under severe stress. Rapid mobility of resources and personnel became the need of the hour. During this time, we have faced acute shortages of essential medical consumables, protective equipment, etc.Worldwide, countries are struggling to meet the volatile demand and in turn, encountering sourcing & logistical issues. What led to such issues and what can we do to reduce the cost to drive efficiency for the future and be prepared for ever changing healthcare dynamics?

Inaccurate inventory data

One of the biggest problems for managing medical supplies stems from poor visibility into hospitals’ inventory. During my conversations with Procurement Heads of some of the leading hospitals worldwide, the problem synonymous to all emerged around inaccurate inventory management despite many of them having top-of-the-range medical devices. Their dependency on legacy software for managing the inventory, procurement, logistics, and other operations complicates the process. There were cases reported from reputable medical institutions when during the COVID-19 peak days in-hospital software systems suffered severe performance issues and even ran out of disk space to store patients’ data.

As a result, in many cases hospitals didn’t know exactly how many ventilators and other critical medical supplies like life saving drugs and oxygen concentrators they had at a given moment, nor how many they were going to need. After figuring that out, the next challenge was to share it with a proper distributor or reporting it to their city’s or state’s authority. This process of taking inventory and sharing up-to-date data had to be performed continuously in order to optimize relocation of scarce medical supplies across different hospitals. As a result, the influx of inaccurate data was practically derailing the planning effort for hardly-hit cities and regions. For example, hospitals in India failed to assess their medical requirements to deal with the second wave of Covid resulting in a larger problem for customers and the government authorities. To simply put, they were unprepared.

This myopic refusal to put their support operations on technology rails should be a wake-up call for medical institutions. It is time for them to look into the modern cloud-based platforms for managing assets, operations, and staff. Tracking inventory should not be a time-consuming routine for medical organizations.

Making sense of inventory data

Even if the hospitals have accurate access to inventory, their systems are broken which cripples them in making sense of existing inventory data to come up with projections. Let us understand that hospital demand fulfilment is a slow process. It can take months for a demand to be fulfilled given stringent regulations, cross-border restrictions, pricing concerns, and availability. A poor process management can lead to a significant increase in procurement expenses and also a chance to under-deliver on quality medical care promises to patients. What hospitals need today is a cloud based platform to help them not just look at the present inventory but also take into consideration the historic trends, as well as real time demand analysis to project the future requirements.

Broken supply chains

Hospitals are overly dependent on distributors and third-party logistics. Their procurement process is inflexible to quickly adapt to a crisis. Similarly to inventory management, procurement and supply chain management should become a higher priority for medical institutions, especially since they are not specialized in these activities.

The best approach is to eliminate unnecessary manual operations and streamline the flow of data all along. As a medical service provider, you may specifically focus on integrating your inventory and procurement solutions as the first step. If you can easily connect to a demand source or your city’s medical supply warehouse, you will be able to create and receive your orders faster, cheaper, and with full visibility.

Hoarding

It is a common practice among medical institutions to hoard supplies to meet uncertain situations. However, if there’s a clear shortage of critical supplies, such as ventilators, in a certain hotspot, we simply cannot afford them to sit idle in a warehouse elsewhere. One part of the problem takes us back to the gaps in automated inventory management.

That said, hoarding is not typically a hospital level problem. Medical supplies may be more often stockpiled at a manufacturer’s, or distributor’s warehouse while hospitals need them right now. Sometimes hoarding happens due to poor logistics or lack of prioritization for critical supplies delivery. This is why supply chain innovations should be an end-to-end endeavour. This will not just help in effective movement of supplies, but also help command the right price and avoid inventory loss. A recent example of this is the Government of India reporting 8.8% inventory loss of Covid vaccines in Tamil Nadu due to improper inventory management processes. States were simply not able to manage the sourcing, distribution, and execution, all at the same time.

Delayed supplies allocation

The COVID-19 situation has taught us that a rapid response to ever-changing dynamics of the virus spread largely depends on accurate data modeling. Such projections allow governments to make more informed decisions on where to allocate supplies. However, there are two more prerequisites to a well-coordinated allocation of medical supplies across the country. The first is having valid data on the current inventory at different medical sites and their actual need. Hospitals have to be able to quickly collect and send that data to authorities, which yet again brings us back to using cloud solutions for inventory management. In fact, hospitals need to totally reprioritize their supply chain management capabilities if they are to be prepared for similar types of emergencies in the future.

The second is managing complex logistics of relocating supplies between different sites. By using modern fleet management and cargo tracking capabilities, distributors should be able to provide near real-time data on supplies relocation to authorities and medical institutions. 

Lack of transparency in bidding processes

There were multiple incidents during the COVID-19 chaos when orders were not fulfilled due to undercover bidding processes. Full visibility into order fulfillment and delivery should be an important requirement for distributors to get access to critical medical supplies.

The problem of cities, provinces or states bidding against each other for medical supplies can be also relieved to some extent with the help of automation.

Slow repurposing of manufacturing facilities

It’s hardly possible to have enough medical supplies for every type of emergency. That’s where manufacturing companies should be able to step up to the plate and produce what’s necessary in larger numbers. In practice, we’ve seen that some countries had very limited capabilities to repurpose their existing factories and produce enough quantities of even basic PPEs, let alone medical equipment. In the case of heavy shortages, no supply chain management can save the day. To ramp up production fast, it is vital to make provisions for more adaptable manufacturing processes.

Lack of innovation

It is of strategic importance to develop high-tech manufacturing and adopt innovations that can potentially protect entire countries during a global emergency, including well-integrated supply chains between hospitals, logistics operators, and factories.

You can’t be fully prepared for every crisis but you can be agile and resilient to quickly bounce back after getting a blow. This is achieved through great management practices, strong connections with other parties in your business ecosystem, but also by using modern technology. In the final analysis, technology makes you more competitive on a global scale and allows building prosperity, expertise, and skills that all come into play at a darker hour.

Vamstar, with its global marketplace and tender discovery model offers a cloud based offering to suppliers as well as hospitals to engage with respective stakeholders on a real time basis. For example, suppliers can transparently access demand across 80+ countries, plan new market launches, get access to open tenders, and price their products competitively. On the other hand, hospitals get visibility to real time supply of essential medical consumables & devices from top suppliers across the globe. To know more about Vamstar, visit www.vamstar.io