With the ever-changing landscape of healthcare, supply chain leaders are constantly challenged with how to best respond to current disruptions, as well as anticipating what’s next on the horizon. The ability to adapt to disruption, commonly referred to as resilience, is a critical element of an effective supply chain. How quickly we adjust determines the level of resilience. Rapid Resilience (R2) is the ability to pivot resources quickly to address disruptions, while maintaining the operational integrity to ensure continuity of patient care.
A fast-twitch response, R2 requires maximum effort of short-term duration. It cannot be achieved unless the supply chain organization is agile, aligned strategically, and a bias for action exists. Identifying a few of the key enablers of R2 will ensure a smoother, seamless process. For starters, these include a clear strategy, an agile organization, information that allows for timely decisions, and an environment of trust.
A Clear Strategy
A clear and concise strategy easily communicated to the organization creates a shared sense of purpose and focus. It also identifies potential threats and plans for mitigating risks. The company’s simple one-pager summarizes Northside’s supply chain approach and articulates the vision, mission, values, key success factors, objectives, and metrics.
The strategy map provides long-term direction and underscores priorities, regardless of changes in the environment. The strategy is communicated continuously to the organization through various means, including leadership meetings and town halls.
Both short- and long-term decisions are grounded in the strategy. For example, one of our objectives is to “maximize collaboration with stakeholders.” Over the years, Northside’s supply chain leadership team focused on building strong partnerships with key vendors, as well as diversifying distribution and market channels to minimize the risk of disruption. When COVID hit, we were able to quickly leverage those relationships and channels to build up inventories of personal protective equipment, so that our patients, physicians, and employees were protected. As a result, Northside provided continuity of patient care, despite supply chain volatility.
An Agile Organization
While the strategy sets the direction, the organizational structure of the supply chain function should be flexible enough to anticipate and respond quickly to changes in the environment. One barrier to achieving an agile structure is unnecessary bureaucracy created by excessively complicated and/or outdated protocols, policies, and procedures. They had a valid purpose at one time but are no longer relevant. Therefore, it’s extremely important to challenge the status quo constantly.
Identifying and updating those obsolete or unaligned policies and procedures will increase organizational agility. As an example, Northside Hospital reengineered two critical processes to address this challenge. One dealing with disruption, and the other with operational efficiency. Both involved collaboration with key vendor partners.
Supply Chain Disruption
Given the significant increase in manufacturing interruptions and bottlenecks at the ports, it became necessary to revisit our approach to managing back orders. Together with our acute care distribution partner, we launched several initiatives geared towards reducing the risk of stock outs. The thorough approach focused on the identification of root causes of declining order fill rates.
We determined that outdated procedures, communication gaps, and lack of process alignment increased back-order risk. To mitigate this, our focus shifted from managing back orders to identifying those products at risk well ahead of projected stock-outs. Then, taking the necessary actions to minimize shortages. Working with our distributors and suppliers, the redesigned process yielded a 70 percent improvement towards our raw fill rate target.
Another cumbersome and outdated process identified for improvement was the “bill only” process. Used for items only billed after a surgical procedure is performed based on consumption of product, this manual, paper-based approach historically included numerous touchpoints across various departments. In partnership with one of our primary software vendors, Northside implemented a cloud-based, AI application, streamlining and automating the “bill only” and “bill and replace” processes and procedures.
Both vendors and hospital staff use this to manage the bill only process and document usage in surgical cases for vendor payment processing. The new system dramatically accelerated process cycle time, reduced resources required to support the process, and mitigated the risk of invoicing errors.
An Agile Structure
Decision-making should be delegated to the appropriate level of the organization to optimize agility. Too many levels within the organization may hinder decision-making and communication throughout the organization. At Northside, there are few levels of management within supply chain, and the VP reports directly to the CEO.
Information for Making Timely Decisions
Timely decision-making is difficult when lacking the requisite information. In today’s supply chain environment, we are overloaded with data both from internal and external sources. Trying to extract insights from mountains of data without a structured approach often results in analysis paralysis.
Our approach begins with identifying the types of strategic and tactical decisions we make and the required information to support them. For instance, deciding which products will yield the largest return from our product portfolios, while improving patient outcomes remains critical to effective category and vendor management.
To make those decisions, we need to understand the drivers of supply expense in terms of volume, price, and product mix, while incorporating feedback from clinical value analysis to ensure we have the necessary information to optimize the product portfolio.
Fostering an Environment of Trust
Perhaps the most important enabler of R2 is fostering an environment of trust. According to Stephen R. Covey, trust is defined as the “firm belief in the integrity, ability, or character—confidence and reliance . . . trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”
Trust is all about having the confidence in team members to make the right decisions, but also to make honest mistakes and learn from them. It drives team engagement and synergies across the supply chain. The supply chain organization must be able to demonstrate visibly that it is acting in the best interest of key stakeholders and, ultimately, our patients.
Operating with a high level of trust often minimizes micromanagement, second guessing, procrastination, hidden agendas, and unnecessary conflict. Trust drives collaboration and team engagement.
Sustaining R2 is not dependent on a formalized plan or policy. Rather the critical elements of R2 are imbedded in the fabric of the organization, ensuring that bouncing back quickly is truly a fast-twitch response executed on cue to address disruption. It’s like being able to change a tire, while travelling at one hundred miles an hour.
Northside Hospital is an integrated health care delivery system that serves the Atlanta region. It operates five acute-care hospitals with 1,705 licensed beds, and more than 250 outpatient locations across the state of Georgia.
Northside is one of the most respected and fastest-growing health care organizations in the Southeast and is committed to balancing clinical excellence with compassionate care. The health system leads the US in newborn deliveries and is among the state’s top providers of cancer care, sports medicine, cardiovascular, and surgical services.
It has been recognized by Healthgrades, the leading online resource for information about physicians and hospitals, as one of the top US hospitals for outstanding performance in delivering a positive experience for patients during their hospital stay. Northside also has been ranked as one of the Best Places to Work among all top large employers in the United States by Comparably.com.
More than 25,500 employees and a network of 4,100 physicians serve nearly five million inpatient and outpatient visits a year across a variety of services, including cancer care, heart and vascular, orthopedics, maternity, pediatric and adult imaging, GI, surgery, spine care, urology, sleep disorders, and emergency medicine.
We give healthcare organizations greater control over their product supply chain by providing direct sourcing solutions that increase the quality, lower the cost, and are designed to their custom specifications and brand. ASP Global offers high-quality med-surg supplies, custom products, and patient preference items to our health systems partners.
ICU Medical congratulates Carl Waller, VP Supply Chain Management at Northside Hospital, for being an outstanding strategic partner. We deeply value our collaboration with Carl and commend him for his ongoing dedication and commitment to addressing supply chain issues and developing strategies for patient and clinician safety.
Owens & Minor is proud to partner with Northside Hospital as they deliver innovative, quality patient care in the Atlanta metropolitan area. This partnership has produced a modern approach to distribution that empowers Northside to continue prioritizing patient care during a period of rapid expansion, while improving inventory management and achieving considerable cost savings.