How to drive resiliency across your healthcare supply chain

Key challenges that have plagued healthcare organizations for years – cost management, workforce productivity and realizing synergies from consolidation – are amplified, at a time when you can ill-afford added burden.

To succeed fast and prove value, healthcare leaders and CSCOs are adopting key technologies like AI, machine learning, control towers and blockchain to achieve a step change in their supply chain organizations. Here’s how:

• End-to-end visibility. A control tower functions as an integrated layer on top of data silos with connectors to external data sources, providing the visibility you need to reduce supply and demand imbalance and improve service levels for patients.
• Intelligent forecasting and demand sensing. By combining AI and a supply chain control tower, you can tap into the right data to play out scenarios, make better decisions faster and improve forecast accuracy.
• Touchless planning. Working with your current technology investments, intelligent workflows and control towers can span multiple systems, applications and data sources to deliver a non-intrusive approach to orchestrate and manage processes.
• Collaborative ecosystem. Connect with your supply chain stakeholders and take immediate actions to resolve issues in real time with a plug and play integration solution, and blockchain-enabled collaboration drives transparency and trust so you can make better, faster decisions with sensitivity to patient needs.
• Elevated planning experience. Personalized dashboards serve up a near real-time picture of inventory wherever it resides, and a virtual assistant provides responses to issues based on your supply chain data using natural language search, delivering significant improvements in efficiency and effectiveness.

A more resilient supply chain helps you to drive higher patient care and maintain optimal costs. It also serves as a springboard to digital transformation initiatives that modernize the patient journey and improve outcomes – integration with electronic health record (EHR) systems, contactless and home-based care solutions, and wearable devices, to name a few.

Hospitals and health systems are rethinking how they operate in an increasingly dynamic environment. Let IBM show you how we can help.

When it comes to supply chains, disruptions are inevitable and expose vulnerabilities in the flow of goods and services that could negatively impact a company’s ability to meet consumer expectations.

The COVID-19 crisis is the ultimate example, and healthcare supply chains have been hit particularly hard.

“This COVID-19 pandemic is a massive shift and change for virtually every global health system…one of the significant impacts being the critical importance of supply chain infrastructure and capacity to supply critical supplies every health system needs.’’

– Dr. Anne Snowdon, RN, Ph.D, FAAN, Executive Director of Clinical Research, HIMSS Analytics; Scientific Director and CEO, SCAN Health

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With a more resilient, smarter supply chain, you gain agility to adapt to continuous change, and insights to anticipate and mitigate the impact of disruptions on supplies, your workforce, costs, and ultimately, patient care. Challenges related to cost, workforce and operations optimization are amplified.

• Supply expenses escalate due to over-ordering, waste and emergency orders.
• Procedures are delayed because of a lack of inventory.
• Product recalls are time-consuming to manage.
• Physicians and nurses spend unnecessary time searching for supplies and manually entering product information into databases, instead of focusing on individual patient care.
• Benefits from mergers and acquisitions (M&A) are slow to materialize because organizational, process and data silos create blind spots and make it hard to drive supply chain efficiencies.

Even as you engage daily in the struggle to respond to a global health crisis, meaningful changes can be made that will drive lasting transformation. With a more resilient, smarter supply chain, you gain agility to adapt to continuous change and insights to anticipate and mitigate the impact of disruptions on supplies, your workforce, costs and, ultimately, patient care.

Threats and crises usually do not come with advance warnings. It is crucial to be resilient, with the ability to respond to change positively and proactively. In today’s environment with higher expectations of supply chain, healthcare providers must be ready to not only respond to change and challenges, but even anticipate them.

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The operational landscape you operate in has changed forever with disruptive innovations, new entrants, business models and devices altering how consumers can choose to approach wellness and care. Now is the time to reimagine your healthcare ecosystem, with connectivity and collaboration to expand and enhance your networks and relationships to stay ahead.

What’s essential in any supply chain management project is defining what matters most to the business and then proving value fast. Let’s examine how you can drive higher patient care and maintain optimal costs by building supply chain resilience.

The global pandemic exacerbated key challenges that have plagued healthcare organizations for years, specifically cost management, workforce retention and realizing synergies from consolidation.

With a more resilient supply chain, healthcare systems and hospitals can achieve improvements in each of these areas while optimizing patient outcomes. Here’s how.

Cost management. During the pandemic, as the demand increased for personal protective equipment (PPE) and medical supplies, costs soared and now supply expenses are forecasted to out strip labor as the biggest expense in healthcare. In times of crisis, higher risk often leads to higher costs, but the truth is that most inventory decisions made to adjust to a disruption are sub optimal and nearly half are unnecessary. This isn’t surprising, since health systems typically order supplies based on historical models and physician preferences – not actual utilization and expected demand – which leads to waste, delayed procedures and high inventory and carrying costs. Most concerning, patient safety can be compromised. Fewer than half of hospital and supply chain leaders say they can proactively identify expired supplies and act accordingly. And managing product recalls is time-consuming and fraught with gaps in data.

However, with inventory and demand visibility, and AI-assisted insights to make more informed decisions, U.S. hospitals have an opportunity to save USD 25.7 billion annually on supply expense while delivering optimal patient care. For a hospital with USD 800 million in revenue, a 1-3% improvement in supply chain management performance could translate into gains of USD 8-24 million.

Workforce productivity. The pandemic also drove a surge in hospitals’ other big cost area – labor – triggered by a spike in overtime pay and reliance on staffing agencies as front-line workers or their family members became sick, and demand for care surged. But workforce cost, capacity and productivity challenges have been mounting for years. The industry faces a U.S. talent shortage predicted to reach 100,000 for nurses by 2022 and 122,000 for doctors by 2032, with similar shortages expected in other countries. Hospitals need to empower credentialed healthcare personnel so they can use their time effectively. Yet, nurses and physicians spend up to 20% of their time addressing supply issues (PDF, 5.7 MB) and not on patient care. Hospitals can ill-afford to bog down clinicians with routine, manual tasks that not only reduce productivity but contribute to dissatisfaction and attrition.

Automating repetitive inventory tasks will increase efficiency and effectiveness by freeing up physicians and nurses to focus on patient care and other strategic areas that require their expertise.

Consolidation of synergies. Healthcare is among the most active sectors for M&A and this trend is expected to continue. While M&A provides huge potential for upside in growth, reach and cost savings, it also creates significant integration and interoperability challenges. Hospital systems work with multiple fragmented teams, technologies and processes to manage daily operations, which makes it difficult to realize benefits quickly. Data sources are also siloed across internal and external systems and in different formats, so teams lack the information they need, when they need it.

Data integration across disparate ERP, legacy supply chain systems and external sources, as well as interoperability with tools such as RFID barcode readers that can feed product data back into these systems, help connect the dots. With end-to-end visibility, supply chain leaders are empowered to make better decisions that optimize inventory on a day-to-day basis to get ahead of disruptions.

Everything from integrating insights into existing clinical workflows (63%) to consolidating fragmented data (45%) to achieving clinically reliable, clean data (38%) was rated as extremely challenging. In an industry that continues to converge through M&A, lack of system interoperability is a likely culprit for data fragmentation and access.

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Digital transformation is no longer optional, but required if healthcare providers want to achieve the level of performance necessary to compete in today’s market. Accelerate your organization’s transformation by putting in place the tools, insights, workflows, and the flexible technology infrastructure necessary to succeed in the modern health system.

For all the challenges brought on by the pandemic, you don’t have to look far to see the silver linings as healthcare organizations accelerate digital transformation initiatives to modernize the patient care journey and improve outcomes.

The implementation of electronic health record (EHR) systems soared.

Epic Systems announced 190 health systems launching Epic EHR in the fall of 2020, the busiest implementation season in the company’s 40-plus year history. This not only boosts efficiency and patient care, but enables interoperability with Health Information Exchange (HIE) systems that play a critical role in securely collecting and sharing patient data to better care for an individual and to understand trends within population segments to improve response.

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Healthcare providers expanded their adoption of telemedicine and telehealth solutions to facilitate patient access to treatment.

These “contactless care” solutions became invaluable alternatives when in-person appointments had to be canceled or postponed. And they will continue as vital links to individuals with limited physical or financial means to receive the medical attention they need.

The groundwork done to develop at-home test kits for COVID-19 will likely spur the use of in-home testing and home-based care in more situations for more people.

Going straight to individuals where they live is an efficient way, and often safer in the case of infectious diseases, to diagnose and deliver care and monitor wellness.

Hand in hand with these trends, wearable and other Internet of Things (IoT) devices and mobile applications are becoming critical communication channels to deliver data back to technicians and clinicians for analysis and action.

From better managing life-threatening and chronic conditions to tracking preventive care, devices and mobile applications are emerging as important components of the modern healthcare ecosystem.

Each of these innovations provides an efficient and effective way for physicians and nurses to improve patient engagement along the journey of care and will become more vital as the population ages. Together, these solutions and technologies can help drive down costs, increase productivity while reducing burnout, and improve patient outcomes. But to bring them into your healthcare ecosystem and realize their full value, you need to start with a resilient supply chain.

Imagine…

• Improving collaboration and decision-making for better patient outcomes and cost optimization.
• Having real-time inventory visibility to identify supply-demand imbalance.
• Gaining insights into the impact of external events so you can plan and manage exceptions.
• Automating tasks based on best practices to free up healthcare professionals to focus on patients.
• Sharing data in a trusted and controlled way across the healthcare ecosystem to make better, more informed decisions.

Key technologies like AI, machine learning, control towers and blockchain can help you do all these things and more, so you can move forward in this new era with confidence.

Persistent challenges, changing conditions and future opportunities are driving hospitals and health systems to rethink how they operate in an increasingly dynamic environment.

“Successful supply chains don’t focus on just one strategy, but a portfolio of elements and solutions to protect their supply chains, including classic risk management, demand and supply visibility and agility.”

– Stephen Meyer, Senior Director Analyst, Gartner Supply Chain practice

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To seize the moment, a step change in inventory visibility comprised of these five capabilities can help you answer critical questions and drive supply chain resilience.

1. End-to-end visibility: How can we get ahead of, and manage through, disruptions?
   Analytics outcomes are only as good as the data upon which they are based. Many hospital systems consist of multiple disparate systems, including between departments and with partner organizations, so supply and demand data are scattered across locations. An ERP system can help consolidate systems and improve traditional inward-facing supply planning decisions. But a 360-degree view also requires understanding patient data, external events and potential disruptors. A control tower functions as an integrated layer on top of data silos with connectors to external data sources, so you have the visibility you need to reduce supply and demand imbalance and improve service levels for patients.
2. Intelligent forecasting and demand sensing: How can we improve forecasting and plan better?
   Using historical data to better predict future needs and make inventory decisions helps, but it doesn’t account for the unexpected. During uncertain times, you need a new approach to make predictions in real time. This requires access to large amounts of data in real time, and the processing capability to connect the dots and get insights, also in real time. In the past, this was wishful thinking, but today it is a reality. By combining AI and a supply chain control tower, you can tap into the right data to play out scenarios, make better decisions faster and improve forecast accuracy (PDF, 1 MB). For example, how will a rise in COVID-19 cases in a specific region impact the number of potential elective surgeries planned and how should you adjust inventory orders accordingly? Or will a weather event impact a shipment of syringes and should you find an alternative supplier or move stock to locations most in need to avoid depletion? Sophisticated AI capabilities powered by new, dynamic data help to improve forecast accuracy.
   
   
   “Almost three quarters of healthcare organizations using AI tools have improved quality of care and enhanced patient experience.”
   
   

   Read the Forrester report

3. Touchless planning: How can we improve productivity and processes?
   Intelligent workflows and control towers can span multiple systems, applications and data sources to deliver a non-intrusive approach to orchestrate and manage processes. Working with your current technology investments, these capabilities apply the power of AI and machine learning to streamline your existing processes. AI can automate 30-40% of routine tasks and decisions across inventory planning, for example dynamically repositioning inventory and adjusting safety stock.
   
   
4. Collaborative ecosystem: How can we collaborate for better, faster decisions and outcomes?
   Sometimes optimizing inventory for better patient outcomes requires more than shifting supplies around or adjusting orders. Conversations have to happen and trade-offs need to be made. A plug and play integration solution helps you to connect with your supply chain stakeholders and take immediate actions to resolve issues in real time. As you extend the healthcare ecosystem to include new partners or gain visibility and insights further downstream, adding a blockchain-enabled collaboration and data-sharing ecosystem allows you to track supplies and transact in a more transparent, trusted and efficient way.
   
   
5. Elevated planning experience: How can we automate routine tasks to focus on high-value activities?
   Supply chain practitioners are often in firefighting mode, manually adjusting plans, and wondering if they had a certain piece of data that could inform a different, better decision. A personalized dashboard that correlates data for a near real-time picture of inventory wherever it resides, creates a seamless experience that delivers significant improvements in efficiency and effectiveness. A virtual assistant provides responses to issues based on your supply chain data using natural language search. This frees up planners to focus on exception-based processes, and leverage AI-assisted insights and intelligent automation to make the best inventory-related decisions quickly. Nurses and physicians don’t have to spend cycles tracking down available inventory when their time could be better spent providing care to sick patients.
   
   

A step change in inventory planning at work

Healthcare leaders and CSCOs are already adopting key technologies like AI, machine learning, control towers and blockchain to build supply chain resiliency.

• A mid-sized healthcare provider is bringing these capabilities together to gain a single view into supply and demand gaps. They can forecast depletion rates by SKU and stock location and predict consumable item usage based on scheduled procedures. They’ve enabled better collaboration across teams and partners to help respond to unplanned events. As a result, hospitals can save millions in wasted or expedited charges for replenishment. What’s more, by digitizing inventory management to reduce manual tasks, they’re able to free up healthcare workers’ time to focus on providing better patient care.
  
  
• A large pharmacy care services company was managing USD 30 billion worth of pharmaceutical drugs via heavily manual processes and excel spreadsheets. With poor inventory visibility across their locations nationwide, and inaccurate weekly and monthly demand forecasts, they had to maintain 90-day stockpiles to ensure product availability and limit emergency orders, which was a costly approach. To reduce inventory carrying costs, stay ahead of out-of-stock situations and seamlessly pivot to the best available supplier when needed, they turned to AI-assisted forecasting and demand sensing capabilities and blockchain-enabled collaboration to right-size inventory by product and pharmacy location.
  
  
• Balancing a surge in demand with supply and capacity constraints, a manufacturer of personal protective equipment needed to determine how best to allocate limited face mask inventory. With insights and priorities informed by downstream impact they are able to make decisions not just based on financial outcomes, but with sensitivity to the immediate customer – in this case, prioritizing healthcare providers over retailers.
  
  
• A leading global provider of temperature assurance packaging for pharmaceutical distribution wanted to eliminate the inefficiencies in the cold chain pharmaceutical supply chain. With a blockchain-enabled platform, they are enabling an ecosystem of pharmaceutical manufacturers and carriers with visibility and transparency to audit and ensure safe sourcing and distribution of biologics, vaccines and other temperature-sensitive products.
  
  

You can drive resiliency across your supply chain to address critical industry challenges and opportunities.

To start, realistically assess where you are in your technology maturity and create a roadmap. A technology partner that combines healthcare and supply chain domain expertise can help, particularly in terms of identifying priorities and creating realistic timelines. Understanding your organization’s strengths and weaknesses will help you identify when and how to use third-party expertise to accelerate your journey.

For some hospitals and healthcare systems, near-term wins begin with digitization and automation of inventory and supply processes. If you’re further down the path, you may focus on inventory visibility, tracking and analytics to optimize patient care and cost. As you progress, AI-assisted insights, informed by the right internal and external data, can alert you to potential trouble spots across your healthcare ecosystem so you can better plan and manage exceptions. Automation and integration at point-of-care enable tracking for product recalls.

As you continue your transformation, supply chain resiliency becomes the springboard to innovation – providing you with the freedom to think long term and get creative, while keeping quality patient care as your compass. Interoperability with clinical systems like EHR systems and wearable/IoT device data allows you to track quality and safety outcomes with an actual digital record of every product used in every care delivery service. In addition, connectivity with pharmaceutical and medical device companies helps optimize decisions in the face of supply and demand imbalance, authenticate product integrity, and share strategic outcomes for product planning and development. Workflow automation and predictive analytics support personalized care delivery, alerting clinicians to risk so they can proactively intervene to optimize patient health and wellness.