Planning Your Post-COVID Supply Chain Approach
It’s clear organizations and hospitals around the world have been drastically impacted by COVID-19. Manufacturing plants are closing, hospital’s revenue streams have been severely impacted, supply is constantly shifting, and new demand patterns have emerged. As a result, it’s only natural for humans to plan accordingly and have some COVID related post-traumatic stress. We are seeing planners going back to old ways – generalized decisions, physician preference vs filling a need, limping along with the hope of supply issues going away, and other reactive responses. To understand why, we must dive into the root cause of the issues and drive transformational change to take back control of the supply chain, making it sustainable in any environment.
In the short term, it’s a natural response that in order for humans to ease fear, they have to feel in control. Hospitals outside of hotspots are preparing for the worst. How they do this is preemptive ordering based on what other hotspots have done, learning from their mistakes and successes. This has had massive implications to capacity of the limited number of suppliers who didn’t have capacity to supply increased demand to begin with. So, what is the solution? The natural solution is for sites (sometimes multiple sites) to over order, we know this as the ‘toilet paper effect’, or in supply chain terms, “the bull whip effect”. But what about reaching out to local manufactures and thinking differently? We are seeing a huge outreach to communities and hospitals partnering with local business to develop products. Unfortunately, this innovative thinking has only occurred when the products don’t show up. Supply chains need to acquire to a more proactive approach. Will this happen – and will it stick? Only time will tell.
Ultimately, to ease the fears of surges, Supply Chain Executives need to empower their teams to learn from this crisis, thinking out of the box for long term solutions while responding to the immediate need. To recover, it will be imperative that supply chains do not go back to the old way of planning. This we all can agree on.
There is a positive message here – we have seen communities and hospitals come together to creatively solve issues and think out of the box. We are witnessing innovation faster than healthcare has ever seen before in preparation for surges. Referencing the supply chain, was this the reset we needed to force us to think differently to find a better more efficient way? I for one think so.