By Gene Byerly, Vizient Senior Program Service Manager, Novaplus
Barbara Crutchfield, Vizient Category Director, Med/Surg and Distribution
Sarah Herrmann, Vizient Director, Program Services, Novaplus
As we move further away from the height of COVID-19, the major lessons learned — particularly the "don't put all your eggs in one basket" takeaway from a seriously strained supply chain — seem to be receding from memory.
It might be easy to procure personal protective equipment (PPE) these days, but you never know when the next global crisis will arise, whether due to disease, natural disaster or international conflict.
So, how can health systems take a "Goldilocks" approach to PPE, ensuring they don't have too much or too little – but rather, a "just right" amount that strikes a balance between financial and clinical requirements?
Diversification is key
We likely don't need to remind anyone that during the early days of COVID-19, many providers found that the traditional suppliers they had long relied on were unable to fulfill their PPE needs, particularly when it came to gowns, gloves and face masks. Even for providers who have since recommitted 80-90% of PPE spend with a single supplier, there's still 10-20% left to spend with a secondary — and ideally, domestic or nearshore — supplier.
One strategy that can work particularly well is to utilize products from a secondary supplier in specific areas of the hospital. For instance, assign gowns purchased from the secondary supplier to the operating room and intensive care unit, and use gowns from the primary supplier in all other departments.
This allows for:
- Standardization in specific departments while keeping a broader array of domestic and nearshore manufacturers afloat.
- Continued access to products that have already gone through value analysis. Investing 10-20% of spend with a secondary supplier means those products have been vetted by your clinicians and supply chain professionals, allowing for faster, and worry-free, access to domestic and nearshore suppliers if a shortage arises.
- A trusted partner during crisis situations. Building a pre-established relationship with a secondary supplier means you can easily go to them with questions about issues like volume adjustment.
It's a relatively simple way to ensure uninterrupted patient care in case of future disruptions.
Take baby steps in low-pressure areas
We know that many providers are currently facing financial and staffing challenges that make it hard to shake up their normal supply chain routine. But diversification doesn't have to be an enterprise-wide endeavor. Dip your toe in hospital departments that are more fully staffed or start with non-acute locations in your system.
It's also important to sell the message internally. Diversification of PPE is predicated on protecting much more than the bottom line — it's about protecting your clinicians and patients so that they never have to deal with the kind of supply chain chaos that occurred during COVID.
Look for manufacturer partners
Going direct to manufacturer can provide much-needed protection against disruptions — for example, through Vizient's Novaplus Enhanced Supply program, manufacturers hold additional PPE stock (in their own facility at zero cost) for provider participants. Programs like these are critical for providers who face cost pressures that prevent them from renting or allocating storage space.
At the end of the day, it's a partnership between the provider and manufacturer — an agreement that enables access to nearshore and onshore products without having to go through distribution or investing in storage capabilities.
Consider third-party logistics (3PL)
On the other hand, health systems with larger budgets can look to strategies like 3PL to help manage their PPE inventory. For providers, a direct sourcing strategy tends to require logistics expertise, dedicated resources, the development of new internal processes and capital investments in systems, storage space and labor. 3PL minimizes those needs and brings expertise in warehousing, inventory management, regulations and compliance, labor and systems (read a case study that details how 3PL helped one provider navigate their PPE needs during COVID-19).
3PL vendors do not take title to the inventory, meaning the provider retains ownership of products. These vendors' capabilities can range from moving product via air, sea or ground; storing and rotating inventory in temperature-controlled warehouses; and when providers call, transporting inventory to their facility.
Now's the time to develop your strategy
Certainly, perspectives on the best way to approach PPE may differ if you're a CFO versus a CNO. The good news is that any of the strategies above — depending on your organization's circumstances and goals — can achieve both cost savings and quality.
What's most important is this: Solidify your strategy now so that you're ready when the next emergency arises.
About the authors
Gene Byerly is senior program services manager at Vizient. He is an experienced healthcare supply chain manager, working for acute and non-acute providers, GPOs and medical-surgical distribution. His fervor lies with getting the right product at the right price at the right time to healthcare providers. Byerly has an M.B.A. with an emphasis in procurement management from Webster University.
Barbara Crutchfield is category director, med/surg and distribution, at Vizient. In her 27 years at the Vizient family of companies, she has worked in areas including distribution and supplier relations, and served as a member of the COVID-19 response team. Prior to her tenure at Vizient, Crutchfield worked for a national distributor.
Sarah Herrmann is director, program services, at Vizient. She is an experienced service executive with a passion for delivering customer value, developing strategic solutions to support new product and contract opportunities, and maintaining relationships with key stakeholders. She has a Bachelor of Science in public administration from Indiana University Bloomington.