Three ways providers can reap more value from their distributor.
February 2022 – The Journal of Healthcare Contracting
By Elizabeth Hilla
As we enter the third year of a global pandemic, many providers are taking stock of their supply chains. They’re trying to figure out how supply chain can help lessen the challenge of staffing shortages and overworked caregivers. How to prepare for the new crisis. How to ensure supply chain integrity and avoid sub-quality or counterfeit products.
As you do your strategic thinking, be sure to engage with suppliers and leverage their expertise and counsel. For most organizations, the prime vendor distributor is the No. 1 trading partner, so I recommend starting there.
Here are some ideas to explore with your distributor:
Staffing
HHS recently reported that over 19% of all hospitals in the United States are experiencing critical staffing shortages. Levels of turnover and burnout in the nursing profession are unprecedented. To address this challenge, ask your distributor about:
- What additional services they can provide that relieve overworked frontline caregivers from product-related activities
- Whether your supply chain team and your distributor are duplicating any activities – such as vetting potential new suppliers – and how you might be able to avoid task redundancy
- What product innovations they’d recommend to make clinical care more efficient or otherwise reduce staff time
Stockpiles
Most healthcare organizations have increased inventory levels to avoid potential product shortages. And some are now carrying very large stockpiles of certain types of products like PPE. The problem is that shortage areas are hard to predict – availability of masks and gloves, for instance, has radically improved, while other categories are now constrained. So it’s hard to stockpile your way out of a crisis. Instead, I recommend investigating how you can partner with your distributor to increase supply assurance without taking on all the inventory risks and costs yourself. Talk about:
- Programs like storage of bulk-buy inventories, sequestered emergency products, and other services for increasing safety stock of key items
- Inventory management services to ensure that safety stock items are turned and used before expiration
- Identification of the most critical product categories and pre-established substitutes for such items
- Forecast-sharing to better understand what the next high-demand or low-availability product areas might be
Product security
The “gray market” for medical supplies has existed since long before the pandemic, but the risks have increased in the last two years. In 2020, reports about counterfeit N95 respirators abounded; more recently we’ve heard horror stories about used nitrile gloves and counterfeit COVID tests. Fake or sub-quality products put patient lives at risk. The single best strategy for obtaining only authentic, approved products is to buy from established manufacturer partners or their authorized distributors. But sometimes products are unavailable and it’s necessary to vet alternative sources. Talk to your distributor about:
- Identifying approved product substitutions when a preferred item is unavailable
- Criteria for vetting new suppliers when necessary, and who should manage this responsibility
Providers and distributors have been working together since the beginning of the pandemic. You don’t have to face the challenges (and assume the risks) of the medical supply chain all by yourself. The challenges keep changing, but strong partnerships persist between providers and distributors. By maintaining strong lines of communication, providers can get more value from their distributors, and both parties can benefit.
For more ideas, visit www.streamlininghealthcare.org.