Those who know me well know that I am an avid music fan, and somewhat of a hack guitarist, having played in several different bands throughout the years. I’ve had the opportunity to play numerous musical genres, but my favorite has always been the Blues. Thinking on the subject of resilience, my mind kept coming back to a specific form of improvisation that my fellow Blues musicians call “trading fours.”
It goes like this: A soloist plays four measures, another band member answers back, soloing for an additional four measures, and then the original soloist plays four more measures. The intent is to form a call and answer whereby the first soloist calls and the second must make up the answer phrase. The pattern keeps repeating, usually ending with the two soloists playing simultaneously, building to a crescendo that ends in a fever pitch of intensity and emotion. The best musicians can do this without rehearsing with the other player, each adapting their style and phrasing to the other.
A good friend once told me, “It takes a lot of practice to be able to play without practicing.” In other words, the practice time isn’t spent on learning the specific notes to play during such a solo; rather, these musicians practice the art of flexibility until they can improvise at will and with ease, reacting on the fly to what is happening on the stage around them. They practice resilience.
Similarly, resilient supply chains are not built without hard work and extensive practice.
Merriam Webster defines resilience, in part, as: “The ability of something to return to its original shape after it has been pulled, stretched, pressed, bent, etc.” Currently, there is an extensive list of regulatory, market, financial and operational stressors lurking in the healthcare arena. For the purposes of this article I won’t be making a list of them, but let’s just say that the healthcare supply chain of today is experiencing a significant amount of “pulling, stretching, pressing and bending.”
Today’s environment requires resilience at all levels of the healthcare system, especially within the supply chain. As more organizations realize the nature of supply chain management as a strategic function, supply chain resilience becomes an imperative.
A resilient supply chain is one that rises quickly to challenges. Challenges with names such as “Drug Shortage,” “Value-Based Purchasing,” “Evidence-Based Practice,” “Accountable Care Organization” and “Declining Reimbursement,” to name a few. Resilient supply chains may also be utilized to gain a strategic advantage for organizations that are able to react more quickly to market forces than a competitor.
What follows is not a five-step program for building a resilient supply chain. Nor is it intended to be an all-inclusive list of the aspects of a resilient supply chain; rather, it is simply a discussion on what I see to be a few of the more important aspects of developing supply chain resiliency, grouped into two main headings: Culture and Strategy. With that disclaimer out of the way, let’s dig in.
The best strategies are useless if your culture rejects them. As the Peter Drucker quote goes, “Culture eats strategy for breakfast.” When I read that quote, I tend to picture culture decked out in a suit and tie at the table of a fancy restaurant, fork and knife in hand, while the wait staff loads up his plate with a big, hot, sizzling pile of Strategy for his dining pleasure. The truth is, though, that in far too many organizations, culture’s dining habits often more closely resemble a pride of hungry lions chasing down a herd of zebras.
Crafting a resilient supply chain requires the development of a culture that will support resiliency, a culture focused on learning and improvement, where ideas are valued and employees are empowered to make meaningful changes for the benefit of the organization.
Organizations that focus on improvement initiatives shake up their own internal processes, intentionally causing focused disruption to their operations to effect positive changes. Cultures bred in such environments tend to be more responsive when disruption is thrust upon them from the outside.
To achieve resiliency, supply chain leadership must know the enterprise strategic plan, or better yet, be involved in its creation. Organizational strategic planning, if done well, should identify most of the potential disruptive forces that could impact supply chain and clinical operations, giving executives the ability to plan for such events.
Once the organizational strategy is well-known, supply chain leadership needs to develop a supply chain strategic plan. This plan supports the organizational plan, aligning supply chain operations with enterprise strategy. Through the use of tools such as gap analysis and SWOT (strengths, weaknesses, opportunities and threats) analysis, the supply chain team can identify potential gaps in their ability to support strategic objectives.
Supplier analysis and the process of supplier relationship management allow organizations to assess their supplier mix. These tools build a great deal of resiliency by providing the vehicle for effective collaboration with suppliers on strategic initiatives and daily operations. Knowledge of your supply chain operations and strategies affords suppliers the ability to plan their operations to better support your success.
Not all suppliers require this level of collaboration, but for those that do, it is vital for supply chain leadership to implement contingency planning as part of a supplier relationship management program. As standardization strategies are leveraged, supply chain leadership needs to ensure that selected vendors are able to meet demand today, tomorrow, and during natural disasters and other unplanned events.
I know of a regional distributor in my area whose distribution center roof collapsed due to a blizzard, damaging most of the inventory inside. Fortunately for their customers, the distributor had thoroughly planned for such an event, and was able to bounce back quickly, but I wonder how many of their customers were aware of the plan. Those that didn’t may have been in some trouble if the distributor had failed to plan accordingly.
As the healthcare industry continues to experience rapid change and burgeoning regulatory and market hurdles, organizations with resilient supply chains will have an advantage over their competitors, and supply chain leaders who are able to hard wire resiliency into their organizations will be in high demand.
The actor Bill Murray has a great quote in the 1989 movie “Ghostbusters II.” The edited for television version goes like this: “…sometimes ‘stuff’ happens, somebody’s gotta deal with it, and who ya gonna call?” Here’s hoping your supply chain program is resilient enough to get the call and deal with it when “stuff” happens.
Jon Reiners is Director of Materials Management at Community Hospital, McCook, Neb.