Understanding the ‘D Word’ in Healthcare Supply Chain

How many healthcare supply chain practitioners does it take to manage inventory? Answer: We don’t know, because we, by and large, have not gone there yet. Most organizations use their materials management systems and supply chain talent to manage the replenishment of the low-dollar, high-moving items. There has been significant progress in other aspects of inventory management by many organizations in the past several years, as we learn from this month’s guest author Joe Colonna, Vice President of Supply Chain at Georgia’s Piedmont Healthcare.

Joe describes what he calls “The Shadow Supply Chain.” His article aptly describes the need to enfranchise those people who are most influential in supply demand. Joe doesn’t actually use the term “demand,” but that is not atypical. Demand, one of the most prevalent terms in the supply chain lexicon in other industries, is rarely uttered in healthcare.

A supply chain runs on demand. We can know a great deal about patient demand — what patients are scheduled or likely to present across the facility — but the supplies they will need? Not so much. Associating a patient with a supply is a discipline in its infancy, though this is quickly changing. As organizations struggle to better understand the true cost and efficacy of the care that they deliver, understanding the supplies consumed is becoming a priority.

In this vein, Optimé Supply Chain is leveraging its service line analytics application SmartANALYTICS to identify actual per-case/per-physician supply requirements. Combining that with data from clients’ operating room and cath lab schedules and advanced patient predictive modeling (expertise we draw on from our sister company The Optimé Group) we are able to more accurately forecast the ebbs and flows of patient volume and optimize point of care inventory. Initial indication suggests up to a 45% savings (inventory reduction and obsolescence avoidance).

We hope to demonstrate that the healthcare supply chain can be driven by the same demand-based rigor deployed in other industries. We just need to do the work of associating patients to the supplies that they consume. Heavy lifting indeed, but the value goes far beyond inventory optimization. Patient safety increases, quality can be studied and improved and utilization savings abound. Plus, there is just something about knowing what it costs to do what you do.

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