People, process and tech: Key to resilience in healthcare

Very few healthcare organizations have the right levels of organizational commitment and spending to be highly resilient when supply chain disruptions occur, according to research by Deloitte, which summarized healthcare organizations across these four zones:

• Reactive (low organizational commitment, low spending)—Organizations in this category aren’t proactively making their supply chains more resilient. They’re focused on day-to-day operations and deal with disruptions after they occur. Leaders aren’t invested in building resilience, and the organization lacks the commitment and spending needed to become more responsive and agile.
• Inefficient (low organizational commitment, high spending)—These organizations are focused on continuing supply chain operations without major interruptions. Building supply chain resilience and mature capabilities aren’t leadership priorities, but operational continuity is. They spend heavily to address problems to ensure the supply chain remains operational, but often with expensive manual workarounds.
• Point-solution (high organizational commitment, low spending)—Organizations in this category are agile and resourceful. All levels of the organization, from leadership to front-line workers, seek solutions to increase resilience in the supply chain. They invest in niche solutions to digitize aspects of the supply chain but lack the funding to layer innovative capabilities into comprehensive solutions to make the supply chain fully resilient.
• Resilient (high organizational commitment, high spending)—These organizations view supply chain resilience as a competitive advantage that’s foundational to organizational success. Commitment to and actions toward these goals permeate through the organization from leadership to front-line staff. Organizations that build highly resilient supply chains invest in holistic solutions to digitize their supply chains and spend wisely on people, operations and technology.³

“Comprehensive solutions that position technology as a component alongside people and processes can help make healthcare supply chains more resilient,” Deloitte points out from its research.⁴

Medline is hearing much the same thing from senior health system leaders, especially those representing the supply chain, as we continue to look for ways to help hospitals become more resilient in both the short and long term. Some of what we’re learning and doing includes:

• People—develop future supply chain leaders
  Hospital and health system leaders have told us they would like to see us play an active role in the support and development of future supply chain leaders by partnering with universities to offer internships, fellowships and continuing education. In fact, Medline is beginning to do just this, partnering with UW Health and the University of Wisconsin-Madison, to offer internships under the university’s undergraduate and graduate programs, some of which will be offered at UW Health in Madison and Medline’s headquarters in the Chicago area.⁶ In addition to planning and budgeting, interns will learn firsthand about analytics, operations and logistics, as well as how to be creative and agile during a crisis.
• Process—support clinically integrated supply chains
  Hospital and health system leaders are calling on themselves to overcome organizational and cultural barriers by including supply chain and clinical leaders in the decision-making process. It’s a mindset we see as essential to successful clinically integrated supply chains—where clinicians, in partnership with a health system’s supply chain leaders and Medline, use knowledge and data to identify and agree on the functional equivalence of products to ensure the delivery of high quality patient care and positive outcomes (no matter the disruption) and minimize waste and lower the cost of care. And it’s a model that Stanford Medicine and Medline, together, have built into a best practice. Medline uses several specialty sales force teams, who in collaboration with local account representatives, lend their product expertise and supply chain knowledge to clinical supply chain decision makers at Stanford. Taking this approach, Stanford and Medline are able to bridge clinical gaps and offer the assurance that if there is a shortage in a preferred or legacy item, an acceptable product will still be available.
• Technology—collaborate with humans, don’t replace them
  Hospital and health system leaders concede that data technology and tools remain a challenge in healthcare in comparison to other industries. They want technology, however, that supports and facilitates human collaboration—not technology in lieu of people.

Medline’s agility to quickly solve vexing challenges, such as those mentioned above from our conversations with health system leaders, plus our scale necessary to seeing our partners through any disruption and sustaining success over the long term are our foremost capabilities, and they are foundational to our role as a supply chain leader in supporting and advancing resilience in healthcare with these key building blocks:

• Healthcare Resilience Initiative: From the very beginning, Medline sought to build and own the vast majority of its warehouses—the largest in the industry with more inventory on hand than any others, even at the height of the pandemic. In fact, long before the pandemic, Medline launched in 2018 a three-year, $1.5 billion national capital expenditure campaign to support the long-term needs of healthcare providers by strengthening the nation’s supply chain. The Healthcare Resilience Initiative (HRI), which spans dozens of Medline divisions, has resulted in eight new distribution centers, 150 manufacturing expansion projects, a new global digital customer ordering platform, and the creation of 8,500 new jobs.
• MedTrans: Medline has the largest owned transportation fleet of any healthcare product distributor in the United States, and continues to diversify its vehicles and strategies to meet the company’s evolving portfolio of more than 300,000 products. Today, MedTrans has more than 1,600 vehicles, delivering nearly 80% of Medline U.S. product sales and providing consistent, exceptional end-to-end supply chain service.
• Expanded formulary: An expanded formulary offers health systems the flexibility they need to fulfill clinician needs by opting for what’s clinically acceptable when clinically preferred is not practical or available, especially during major disruption. Medline offers “spot buy” catalogs to customers to make sure they always have what they need on hand, even if it is outside of their legacy choice.

Resilience in healthcare isn’t a state of being, it’s a state of doing. Research suggests and health system leaders are increasingly realizing that organizational commitment and wise spending—not simply specific technologies—can ensure healthcare supply chain resilience. But they can’t do it alone.

By leveraging its foremost capabilities of agility and scale and creating best practice models, for example, in clinically integrated supply chains, Medline can help hospitals and health systems become more resilient.