Stronger collaboration, smarter distribution is key to supply chain resilience.
Sponsored: Cardinal-June 2023 – The Journal of Healthcare Contracting
While the COVID-19 pandemic, extreme weather events and geo-political activity have exposed vulnerabilities in the global supply chain in recent years, organizations across the healthcare industry have felt the impact of fragmentation—particularly as complexity has grown due to emerging markets, expanding product portfolios and numerous additional structural factors.
Cardinal Health™ Laboratory Products and Services distributes to more than 6,300 hospital labs, hospital-owned clinics and reference laboratories. From its perspective as one of the largest dedicated lab distribution networks in the U.S., Cardinal Health has unique insight into the complexities of the laboratory supply chain and how to proactively address fragmentation.
“With the continuing decentralization of healthcare delivery, the proliferation of new products and services to the market, and evolving regulatory requirements, supply chains are more susceptible to fragmentation and the associated costs,” said Emily Berlin, Vice President Laboratory Marketing & Aero-Med Commercial Sales and Operations.
“Clinical labs have faced labor constraints, supply availability challenges and unpredictable shifts in demand – events that are compounded and made more difficult to address with a patchwork supply chain.”
Fragmented supply chains experience rising costs due to stockouts, delays, quality issues, errors, lack of standardization, inconsistent processes and decreased visibility. For organizations aiming to evolve to a more integrated model, a comprehensive and systematic approach that enables better visibility, faster transfer of information and stronger alignment between clinical, operational and logistical teams is necessary.
Aligning supply chain to the care delivery model
As health systems have expanded into alternative care locations including non-acute settings outside of the hospital, inefficiencies in inventory management, sourcing and supplier coordination have come into heightened view.
“Supply chains will benefit from more efficient procurement, optimized management of upstream and downstream relationships, and increased standardization, particularly as the demand for specialized products has led to new suppliers entering the market,” Berlin added.
“Building strong relationships with suppliers goes a long way to helping our customers operate more efficiently. Through robust relationships and identifying new suppliers to bring through distribution, we can provide customers with more options that address critical lab distribution requirements.”
Labs play an essential role in patient care yet are susceptible to inefficiencies related to product access, delivery schedules and financial value caused by fragmented distribution that does not prioritize the lab’s needs. Prioritizing and elevating the lab is core to Cardinal Health’s distribution strategy. With over 70 years of deep clinical expertise, Cardinal Health lab distribution solutions are tailored to helping labs drive value. In addition to maintaining a breadth of lab products from key suppliers that allows for competitive pricing, Cardinal Health offers a suite of lab-specific services that increase the reliability of laboratory supply. These dedicated solutions include proactive inventory management visibility, cold storage and special handling capabilities, managed seasonal demand, a dedicated freight management solution, a quality assurance program (QAP) for one-time and standing order support, sequestered lots for critical materials, low-unit-of-measure (LUM) ordering and a reserved respiratory inventory program.
Improving coordination between clinical and supply chain teams
Costly inefficiencies tend to occur due to duplication of effort arising from lack of coordination. Clinical and supply chain teams can improve coordination by establishing clear lines of communication and meeting regularly to share data, such as testing volumes and inventory levels, to boost visibility and ensure quality control. Creating lasting efficiencies across multiple locations and systems requires solutions that provide transparency to help identify and solve issues that arise. Automation can help increase efficiency by reducing the risk of errors and disruptions.
Berlin stated that, “customers rely on both our clinical and operational expertise to help optimize lab operations, particularly as distribution channels have evolved. We are steadfast in keeping our finger on the pulse of industry developments and new technologies and are continuously expanding the solutions we provide. By partnering solutions like automated lab capital equipment and custom specimen collection kitting with dedicated diagnostic specialist and kitting advisors, we help customers streamline, which drives workflow efficiencies and savings.”
Helping clinical labs evolve
Transforming opportunities for improvement into core strengths is key to a resilient and flexible supply chain that is positioned to navigate future challenges. By partnering with an experienced laboratory distributor, organizations can facilitate collaboration, streamline the ordering and delivery processes and make the unpredictable more predictable through access to real-time data and insights.
“We are continuously investing in our distribution network to accelerate service and remove complexities across the supply chain for our customers,” Berlin said. “Capabilities like our specialized handling and cold chain network mitigate risk and help assure product integrity so that customers receive products when they need them, at the quality they expect.”
Cardinal Health has launched a multi-year warehousing and modernization plan that focuses on infrastructure and technology investments. Their newest facility, located in Central Ohio, is equipped with Locus robotics and an innovation lab designed to test new technologies and streamline fulfillment processes.
“We have evolved to help our customers evolve,” said Berlin. “Health systems and laboratories rely on us to help them be more agile, reduce risk, and improve the efficiency of healthcare delivery to ensure their patients receive the critical care they need.”
Photo caption:
Emily Berlin, Vice President Laboratory Marketing & Aero-Med Commercial Sales and Operations