State of the Union — Supply Chain 2015

Last week I watched the State of the Union speech by the president. As established by Article II, Section 3 of the Constitution: “He (the President) shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.”

Prior to 1934, the manner and regularity in which the update was given has varied. Beginning with FDR, the State of the Union speech became an annual event given before a Joint Session on Congress—usually in January or February.

And Jan. 20th was the day the annual speech was to be given. Coincidentally, I began working on my article for this month’s newsletter that same day, and in doing so I thought I might take a look at the State of the Healthcare Supply Chain. To do that, I thought I would take a look at where we are in 2015, compared to where we were 37 years ago, in 1978.

Why 1978?

Because that is when Aspen Press published the seminal early work on what today is known as Supply Chain: Hospital Materiel Management, by Charles E. Housley. I decided I would take a look at the book and see where we are now as compared to where we were then.

As I opened the book, I saw an inscription on the inside cover. It read: “After all is said and done, there is more said than done. Best wishes, Charles Housley.” My first thought was, “I don’t remember Charles signing my copy of the book.” Then I remembered that I actually lost my original copy and got my current one from a friend a few years back. The second thing I thought was, “I didn’t know Charles that well, and he certainly is a bright guy, but he couldn’t have been the genesis of such a witty comment.”

So I Googled the quote, and sure enough, he was not. Google attributed the quote to two different people—Aesop and Lou Holtz. That didn’t surprise me either (after all, Lou Holtz and Aesop were classmates at Kent State in 600 B.C.) and confirmed two other things — Lou’s corn-pone humor is an affect put on for the cameras and Willie Nelson was right when he said, “Amateurs copy; professionals steal.”

Charles Housley and Lou Holtz are consummate professionals.

As I got past the inside cover, it became clear to me why this book and Housley himself are so important to our industry. Over my 50 years in healthcare I can name countless folks who claim to have been the first to do some of the things that we take for granted today as being part of the functional supply chain, but Charles was the first to write it down.

And if you had never been introduced to what we now call Supply Chain, you could read this book and receive a tremendous grounding. You could take it today and build a successful department from scratch. Housley was a true pioneer. He is most famous for his concept of “Stockless Purchasing,” a methodology of Just In Time delivery in association with American Hospital Supply in Columbus, Ohio, in which minimal levels of supplies were kept in stock and deliveries were taken daily from the primary supply distributor.

Housley was subjected to constant criticism. His system was held up as a gimmick because his “prime vendor” was located across the parking lot from the hospital. But after a couple of years with American, Housley renegotiated with Colonial Hospital Supply in Cincinnati, 100 miles away, and operations did not suffer one whit. Housley became THE leading expert on Materiel Management (“THE” because he was located in Columbus, home of THE Ohio State University).

So what has changed in the past 38 years?

In my opinion, not that much beyond speed. Today a generation of tech-savvy folks is attempting to automate many of the basic processes and methodologies that Housley identified all those years ago. We have gotten smarter and faster, and in many ways, better. But we are also still trying to sell our case to senior leadership and trying to get people to listen and take us seriously.

Our technological capabilities are still only as good as the quality of the information we have chosen to automate. (Back to the 7 Rs we at Optimé keep talking about.) Our Relevance is limited to our ability to make our case compelling and demonstrate our value to the organization. The number and nature of our quality Relationships is governed by individual personal skills. The Rigor present in our operations is limited to our individual awareness of the need for such discipline. The Responsibility we assume and are granted is often reflective of the individual supply chain leader’s personal charisma. The Rhythm associated with a finely tuned, smoothly functioning operation is absent more often than present. And the Resilience ascribed to those who have tried, failed, tried again, failed again and failed better is often absent because so many of our leaders make their way from job to job to job without putting down the roots needed to build a lasting operation.

But times are improving. We are much more operationally and technologically sophisticated than we were in 1978. The work of Charles Housley and other supply chain leaders has made our discipline one that is generally Respected, and God knows, we are all trying hard to create something lasting and meaningful.

So the State of the Healthcare Supply Chain is strong—stronger than it has ever been, and getting stronger as concepts such as the 7 Rs become part of the way we do business.

And after all is said and done, more is getting done now than ever before.

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