Irv Lichtenwald

Is Your Supply Chain Ready for Coronavirus?

March 24, 2020

Public Health, Supply Chain Management 4 Minute Read

Chances are good the face mask you’re wearing or have on hand (just in case) was made outside the United States, maybe in China.

In calmer times, that wouldn’t matter much. But when Chinese officials are trying to stem a global pandemic that started in a Chinese city, how likely is it that the country will continue to export face masks at the same rate?

This isn’t a hypothetical. With the spread of COVID-19, aka, coronavirus, we know the answer is not very, and that it impacts a great deal more than face masks.

This moment might be one of opportunity for Mike Bowen, executive vice president for one of the few companies that manufactures masks in the U.S., were it not for the overwhelming numbers—for the chasm that exists between supply and demand.

“I’ve got requests for maybe a billion and a half masks, if you add it up,” Bowen says, adding that since January he is averaging around 100 calls and emails a day. “Normally, I don’t get any.”

Of course, the challenge illustrated by Bowen’s predicament is far more expansive than the inability of one Texas-based manufacturer to keep up with a ridiculous, panic-driven spike in demand.

“Without secure supply chains, the risk to health care workers around the world is real,” said Dr. Tedros Adhanom Ghebreyesus, director-general of the World Health Organization. “Industry and governments must act quickly to boost supply, ease export restrictions and put measures in place to stop speculation and hoarding.”

And in the meantime, what can an individual hospital or health system do to try and ensure adequate supplies?

Focus on things at home. Keep it local. At a minimum, implement real-time supply chain management systems that provide timely, accurate reports so you know what you have and need.

How can a robust supply-chain management system help you in times like these?

First, by managing items across supply chain methodologies. Certainly, your hospital orders from different suppliers, and chances are those suppliers don’t all use the same methodology. With cross-stock methodology capabilities, it won’t matter whether suppliers use KANBAN, EOQ/ROP, PAR, MIN/MAX or Suppress Pick.

When the system can search without concern for methodology compatibility, your hospital can have more faith in the accuracy of current inventory, will save time previously spent contacting individual suppliers, and can more rapidly resupply as needed by quickly determining who has what and where. Need to replenish hand sanitizer and cotton swabs? Initiate one search that pulls in all existing suppliers and tells you who has what you need before placing an order.

Second, by tracking the supply of an item for both primary and secondary suppliers. As COVID-19 demonstrates, this ability to manage backorder situations is always useful and sometimes crucial. A useful, vibrant system will use a barcode to add an item to a primary provider pick list AND report on the same item to a secondary provider in the event the primary has none in stock. The need for guess work and manually retracing steps when the primary provider does not have the necessary stock is eliminated.

Finally, by comprehensively managing all items not controlled by the Drug Enforcement Administration. Controlled substances that fall under DEA jurisdiction are a complicating factor, but the system you use should monitor everything but controlled substances. Is your hospital having to manually track and order some essential items? Time to look for a new system.

Beyond these common-sense steps enabled by a functional supply-chain solution, hospital administrators may want to start looking for alternative suppliers. The disturbing truth is that the United States has become heavily reliant on China for certain products that slow to a trickle in situations like the one COVID-19 is creating.

“This is an opportunity for companies to look for different ways to do the supply chain,” said Stephanie Kennan of McGuireWoods Consulting. “I think it’s an issue that over the long term we need to grapple with because we can’t even manufacture a lot of the drugs inside the United States.”

And where China is the source of many drug-related components, India produces many of the finished drugs imported to the United States. With COVID-19, the Indian government has instructed manufacturers to get permission before exporting 26 different drugs, about two-thirds of which are antibiotics.

So, will COVID-19 be the catalyst for a whole new era of manufacturing essential products inside the United States? Perhaps it will be, and perhaps it should be. And perhaps your hospital can find a way to contribute to or benefit from such efforts.

In the meantime, however, the best thing you can do for your organization and patients is to stock up on necessary items as efficiently and rapidly as possible. With any luck, COVID-19 will be a tremendously exaggerated threat, but it will most certainly be followed eventually by a bug that is not. The key element is our preparation for threats generally, not the lethality of this threat in particular.

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