When Dan Hurry first started working in healthcare supply chains in 2010, he said it was rare to see a chief supply chain officer (CSCO) at a hospital because the role had not been “strategically positioned.”
Now president of both Cincinnati-based Advantus Health Partners and chief supply chain officer of Bon Secours Mercy Health, Hurry might be in good company.
The Covid-19 pandemic thrust the role of CSCO into the spotlight when it exposed vulnerabilities in the healthcare supply chain, better known as the process to get medical supplies and medication from manufacturers to patients. It’s a CSCO’s job to ensure the process is efficient and cost-effective.
“Your supply chain is a strategic relationship that you should have,” Hurry told Healthcare Brew. “It’s a discipline that should be end-to-end within your organization, and elevate that role.”
Supply chain challenges
Even before the pandemic caused issues such as personal protective equipment (PPE) shortages, supply chains faced ongoing challenges.
“On any given day, we are managing 65 to 70 different drug shortages—and that’s pre-pandemic, post-pandemic, [and] during [the] pandemic,” Hurry said.
One of the largest problems is that healthcare supply chains lack a standardized system to identify and track products and demand across health systems, Hurry said.
Universal product codes (UPCs)—barcodes with 12 numbers—are common across other industries. They help CSCOs track demand and monitor where these products move and when.
“Our industry does not use a universal language, which essentially is the foundation to all of the supply chain challenges we have,” Hurry said. “The lack of ability to communicate in an effective and efficient way really hinders our supply chain as a whole.”
Some healthcare organizations are creating a universal language for their own products. Alongside barcodes, Johnson & Johnson added digital tags called unique device identifiers (UDIs) to the ~70,000 medical devices it sells in the country. The process, which the company finished last fall, took almost a decade. UDIs will help streamline its supply chain process and allow for quicker product recalls, according to J&J.
A strategic role
Nearly 75% of US hospital executives said the supply chain “stands to assume an even more strategic role” in their health systems, according to a 2021 McKinsey and Company survey of 121 C-suite and supply chain executives.
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Healthcare executives can help supply chains prepare for future disruptions by ensuring that supply chain leaders like CSCOs have a seat at the table to make decisions during normal operations—not just during disruptions like a pandemic, according to a 2022 Deloitte Insights report. Health systems and their supply chain leaders can work together and establish shared goals to improve efficiency and cost savings, according to the McKinsey report.
The supply-chain strategy then becomes an “actuator to bring value to your organization” instead of a “reactionary effort to problems,” Hurry said.
Some supply chains are considered reactive, focusing on daily operations and dealing with issues as they occur, instead of planning proactively, according to the Deloitte report. This approach may not be the most cost effective—a high-performing supply chain can reduce supply spending by up to 10% and “better position health systems to achieve their growth ambitions,” McKinsey found.
Consulting firm Gartner ranked the top 25 high-performing healthcare supply chains in 2022, and many of the top performers prioritized building sustainable systems to address future disruptions, and invested in technology to improve efficiency and lower costs.
For example, the top-ranked Cleveland Clinic implemented a resiliency program for monitoring supplier fulfillment, according to the Gartner report. In third place, Michigan-based Corewell Health developed an algorithm to track back-ordered items and warn the system about upcoming shortages.
Supply chains should aim for “constant operational improvement,” Hurry said.
The way Hurry approaches these improvements goes back to his first interaction with the healthcare supply chain.
His journey into healthcare started with a cancer diagnosis in 2005, when he said he noticed many “little misses” during his treatment—communication mishaps, incorrect data—that could be improved.
“My passion has always been to try to reduce the inefficiencies of poor communication for the individual when they go through the worst time of their life, to make it a better experience. To help the caregivers, the doctors, the physicians, the clinicians have a clean and easy experience,” Hurry said. “And then ultimately, that translates to the patient.”