Supply Chain Management in the Midst of COVID-19

By James R. Francis, FACHE

Most well-managed healthcare supply chains have a disaster plan. More advanced supply chains have business continuity plans for a wide range of third-party risks in today’s operating environment. One best practice included within business continuity plans is the on-going monitoring of world events and potential disruptions. Action based on such monitoring improves a supply chain’s ability to be agile and resilient in the face of uncertainty. Despite our best efforts, no amount of planning prepared healthcare for this global pandemic and its dramatic impact on supply availability. COVID-19 has demonstrated just how fragile the supply chain can become in a few short weeks when there is an overreliance on overseas manufacturing. This experience and the lessons learned from it will be with healthcare for the foreseeable future.

In late January 2020, the business continuity unit within the Mayo Clinic supply chain alerted me to the potential disruptions associated with the coronavirus occurring in China. This included the immediate downstream impact on our supply of PPE as well as potential longer-term implications for other products manufactured in China given the governmental actions being implemented to control the virus. Our Hospital Incident Command System was immediately activated to coordinate with our Emergency Operations Center in supply chain management, and eventually our newly conceived Sourcing Command Center.

Days turned into weeks of daily briefing calls to manage PPE inventories systemwide. Traditional sources of supply in healthcare quickly became overburdened. Manufacturers and distributors placed all customers on allocations in an attempt to evenly distribute increasingly scarce products and, most importantly, limit hoarding. Healthcare organizations turned to their GPOs or to nontraditional sources for products. International sourcing is not a traditional skill set among healthcare supply chains professionals. It is an uncharted territory that has many risks associated with it including counterfeit products, profiteering, constantly changing terms and pricing, dealing with foreign and U.S. Customs, shipping of products and transportation gridlock, to name just a few of the challenges experienced. Even as this blog is written we are waiting on confirmation of orders and receipts of needed PPE to ensure a safe environment for staff and patients.

Despite the challenges, our organization had many bright spots that served as a bridge to managing this pandemic. After several years of investments and focus on business continuity our supply chain realized dividends that enabled it to meet the dynamics and constantly changing needs. Investments in automation/replenishment technology along with advanced analytics allowed for visibility to our inventory systemwide. This enabled us to manage our inventory centrally and distribute product across five states based on demand. In addition, we performed data and analytics modeling to provide a days-on-hand inventory based on patient mix. Combined with anticipated orders received, we were able to understand our ability to meet the needs of patients and caregivers.

Early in our efforts to meet supply demands we began keeping track of all lessons learned. We will prioritize and develop action plans for when we resurface on the other side of COVID-19. The more immediate task is helping our healthcare organization resume operations and ensuring the supply chain is ready to support a return to “normal” operations. I am particularly proud of how our team has stepped up. The supply chain team will once again thrive just as the heroic frontline staff caring for patients will. We will build a stronger supply chain with greater resiliency; however, many changes will be required. A comprehensive evaluation of how to prevent and react to these challenges in the future will fundamentally change how the supply chain in healthcare functions going forward.

James R. Francis, FACHE, is chair, Supply Chain Management at Mayo Clinic.

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