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Navigating the PPE supply chain during a pandemic

Insight Article - November 22, 2021

Benchmarking & Forecasting

Budgeting

Practice Efficiency

Gordon Fullerton MBA
COVID-19 impacted all aspects of the healthcare field and severely impacted the supply of personal protective equipment (PPE). By March 2020 the demand for critical infection prevention supplies —such as gloves, gowns and masks — increased dramatically as the virus moved through national and international populations, driving up cost and forcing many hospitals and outpatient centers to turn patients away and cancel procedures.
 
Throughout the past two years of this pandemic, even and as the Delta variant causes a resurgence in hospitalizations nationwide, Lifeline Vascular Care has continually remained operational. We review the lessons and strategies for maintaining the necessary supplies to safely provide quality patient care during a pandemic.

Communication

Effective, calm and consistent communication, internally and externally, is essential during a pandemic. Communicating which PPE product codes and allocation quantities are available is important, especially for a geographically disparate health system. Our centers, spread across the country, received PPE from different distribution centers, which affected lead time.
 
Providing daily availability reports and allocation restrictions to all centers and operations’ teams ensures receipt of available PPE and limits the risk of order rejections caused by exceeding allocation orders.
 
For scarce PPE, we changed the process for purchase order (PO) issuance. Instead of using the automated EDI (electronic data transmission), centers placed orders by phone to ensure availability and timeliness. For example, by the time centers issue an EDI PO and the supplier receives it, par levels of allocated PPE may no longer be accurate. Direct phone orders, while more time intensive, increased the probability of order accuracy and available product codes.
 
It is crucial to work with clinical and quality experts to ensure products and available alternatives comply with regulations and internal policies, as well as required efficacy. As the breadth of cleaners and disinfectant lessened, we reviewed Centers for Disease Control and Prevention (CDC) recommendations for approved disinfecting products and manufacturer instructions for use (IFU) multiple times a week and before a new product was made available for purchase.
 
As experts learned more about the disease and the virus’ spread, these recommendations changed, as did the types of products available. A similar partnership with quality and clinical teams helped us speed up staff vaccinations as tiered-priority populations became eligible for the COVID-19 vaccine.
 

Supplier relationships

The right suppliers will be able to gauge availability and monitor PPE scarcity forecasts. It is important to maintain distributor relationships and leverage their knowledge of market trends, PPE run rates and manufacturing capacities.
 
When anticipating shortages or other factors that may increase cost, such as inflation, long-term contracts are preferable. The partnership with key supply account managers requires transparency and clarity of forecasted shortages and duration of backorders.
 
It is necessary to know your volume and projected run rate. Many suppliers allocated PPE based on purchase history and prioritized accounts over new and lower volume accounts. Even if bulk order levels are healthy, it is crucial that centers continue to order consistently to maintain their purchase cadence. Some suppliers would not open new customer accounts during the peak of PPE shortages.
 
It is important to diversify the supply chain in times of scarcity. While leveraging volume with a single source to drive down cost is a tenet of purchasing, it’s less a priority during a supply chain crisis. We added a major secondary distributor and smaller tertiary suppliers while maintaining our primary distributor. Many opportunistic and nefarious suppliers flooded the market with PPE offers, which required thorough vetting. A large purchase of gloves placed in December, for example, never arrived. Desperation for supplies should not impact the vetting process, a critical lesson our team learned at the peak of the glove shortage in 2020.

Macro environment

It is crucial to understand the global supply chain and its vulnerabilities. What is the source of your PPE? How strained is the shipping industry? While there is no crystal ball for answering these questions, forecasting potential shortages and transportation delays assists in order cadence and bulk order preparations.
 
For example, while masks were the first to become scarce, manufacturers were able to quickly pivot and increase supply. Availability of exam gloves, on the other hand, declined and gradually became more expensive. Malaysia produces much of the world’s glove inventory and reduced exports dramatically to maintain national supply.
 
Anticipating shifts in production can prompt bulk purchasing before prices increase dramatically.

Conclusion

The purchasing strategies needed to maintain supply of PPE during a pandemic include knowing the market challenges that restrict availability and providing timely and consistent communication with internal frontline healthcare workers, cross functional business units and supplying partners. Placing reasonable bulk purchases to ensure operations for a few months requires tracking PPE inventory and projecting needed par levels to remain operational. Diversifying sourcing and maintaining supplier partnerships is also a necessity.
 

About the Author

Gordon Fullerton MBA
Director, Supply Acquisition Management Lifeline Vascular Care Vernon Hills, Illinois
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