Avoid Panic Ordering by Learning from Emergency Preparedness

HIDA Prime Vendor: Getting the Most from Your Most Important Supplier

By Jeff Girardi, HIDA

Every pandemic or emergency scenario in healthcare is uniquely different, yet each share similarities. They can impact various aspects of provider or supplier operations, may require specific products to treat affected patients, and often lead to panic ordering – whether caused by hoarding mentalities or fears of being unable to access inventory.

During the 2014 Ebola outbreak, provider orders surged for personal protective equipment like gloves, gowns, and masks. This demand spike limited nationwide availability of supplies, and even led some providers to pursue alternate, more expensive channels to purchase products.

Recent hurricanes have affected large regions of Texas, Florida, and Puerto Rico, temporarily disabling some factory operations and limiting production capacity. While impacted suppliers already have domestic and international contingency plans in place to fill supply chain gaps, some providers still felt the need to purchase extra amounts of medical products.

In the event your organization ever encounters an emergency situation like those described above, distribution partners agree that increased buying without demand or utilization justification only exacerbates the problem and increases costs for all trading partners. By putting the right processes and contingencies in place in advance of these events, you can help avoid product shortages, maintain consistent access to product, and ensure products don’t end up expiring in stock rooms or on shelves by going unused.

Distributors recommend customers focus on two main preparation areas to avoid panic ordering: contingency planning and data and technology.

Contingency Planning

• Map out alternate delivery routes for your vendor partners to use in case of detours, road closures, or hazardous conditions during severe weather events.
• Agree on automatic substitution lists or pre-approved alternate products to avoid shortages of critical items.
• Ask whether your distributor contracts for reserved inventories. These arrangements set aside guaranteed product reserves for your organization, regardless of the emergency scenario.
• Keep your emergency contact lists up-to-date, including all city, county, state, and federal emergency response contacts for easy reference.

Data and Technology

• Work with your distributor to analyze utilization reports that precisely determine inventory minimums and maximums. Usage rates can be calculated by month, week, day, and even by clinical department.
• Agree upon hypothetical or conditional orders to be used if communications ever go down at your organization. These orders can be pre-loaded in distributor systems at any time.
• Set up organizational weather alerts on computers, cell phones, and email systems so your staff can be notified if inventory reserves need to be increased several days before a storm actually hits.
• Employ generators and cell/satellite phones for backup power and communications access if city grids ever fail during extreme weather.

During public health emergencies, it’s common to feel the need to purchase extra amounts of medical products for fear that access to certain supplies will be disrupted. However, this behavior often accelerates product shortages or leads to returns, unnecessary deliveries, or expired product after an event concludes.

Healthcare supply chains may become leaner during public health crises, but suppliers are well equipped to manage proactively their inventories and infrastructure to serve customers effectively. The best way to avoid being caught off guard or falling into a pattern of over-ordering is to maintain open communication with your supply partners.