“Simply stated, supply chain is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole,” James Spann, Practice Leader of Supply Chain & Logistics at Simpler Healthcare, said in a 2015 interview.
The challenges facing by the Healthcare Supply Chain in the current COVID-19 pandemic are completely different than ever before. This time is spread out all over the world. Almost all the countries are facing the same problem. Hospitals in all over the Worlds need to rapidly and dramatically increase their supply of personal protective equipment (PPE), Test kit and other medical equipment most likely Ventilator, and other lifesaving items but sourcing these products, especially from China and within the chaos of COVID-19, has taken hospital executives into unfamiliar waters. Not only for the above items, the shortage of medicine also shocking.
For example, the 3M Company initially doubled its production of N95 masks. [Source: 3M web page i.] Unfortunately, we are not experiencing typical fluctuations in demand and these efforts were insufficient. Demand for PPE (i.e., N95 respirator masks, surgical masks, and full body suits) has reached unprecedented levels. Some estimates are that demand for PPE has increased 1700%.
Bangladesh is not immune to this epidemic. Although there have been many epidemics in the history of Bangladesh before, such epidemics have never been seen before because human interaction with others here is very much hampered. Although we are accustomed to dealing with natural disasters, such epidemics are very new to us.
Right now, we have More 600 Government hospital and more than 5000 private hospitals and clinics as well as more than 10,000 private registered diagnostic centers under DGHS in Bangladesh. There are more than 500 regular suppliers to support these hospitals and diagnostic. On the other side, Allopathic Registered Manufacture 271, Retail Pharmacy 125,489. This proves that healthcare Supply Chain Management in Bangladesh is not just a piece, it is a whole cake.
The maximum healthcare supplies in Bangladesh [except the medicine] are import base only two or three company just start their manufacturing plant in Bangladesh but its take time to fulfil the market demand. Keep in mind that this is happening around the world; most natural disasters occur in one region, country or area of a country. With COVID-19, the demand for medicals items specially PPE is off the charts, all while production or exporting is often restricted, resulting in disruptions to the supply chain that have severe consequences.
So, this situation is not a simple point in demand or single supplier that has been taken down; it is a global disaster and is best viewed through that lens. When considering this situation as a major supply chain interruption, new suppliers have recognized the PPE business opportunity and entered the market. Because of production advantages like access to raw materials and labor costs, many of these new suppliers have popped up in Asia, specifically India as well as Bangladesh. Many garment manufacturing companies [especially BEXMCO textiles] in Bangladesh are producing world class PPE gowns and fulfil the demand of the both local and foreign. Which is the new face of Bangladesh.
On the other hand, the shortage of medical devices, especially ventilators, was a cause for concern, as the ventilator became an important device for the actual treatment of many patients with respiratory problems. But due to the shortage of ventilator all over the world Medtronic, the world's largest ventilator manufacturing company, has opened its production patents in different countries and many developing countries like Bangladesh have started producing ventilators following their patents. It is playing a vital role in the progress of developing countries like Bangladesh.
Why is Healthcare Supply Chain so complex?
Healthcare supply chain management is unique because each participant has their own interests to protect. Different stages in the supply chain flow may be focused on their own goal. Providers may want to use a specific product because they were trained with it, whereas hospital executives aim to purchase the most affordable quality items.
Since supply chain goals are not always associated within an organization, the healthcare supply chain management process can be inefficient and fragmented. Healthcare organizations must take into account numerous requests and viewpoints to settle on specific product budgets.
Patients also have a voice in the healthcare supply chain management process. Healthcare organizations may be able to regularly order the correct sizes of gloves and keep them stocked, but some patients may need more customized medical products, such as latex-free options, depending on their health status. Not only that, for cardiac patients they have proper right to choose the cardiac stent, pacemaker or heart valves. [Right now DGDA fix the MRP for those cardiac items.] Similarly, providers may prefer a specific brand or type of medical product, which could lead to cost concerns.
For example, providers may arrange their own preferences for certain products, while procurement executives attempt to cut healthcare costs. Technology and reduce out-of-date products. Oftentimes, hospitals face hoarding or squirreling away of certain products by providers.
In some cases, providers just want the products when they need them, but to ensure that happens they oftentimes store or provider manage their own supplies. This can contribute to cost variance and off contract spending which are hard to uncover. One more invisible cost that is often overlooked is the time spent looking for supplies or waiting for someone to deliver what they need.
Impact of Covid-19 on Healthcare Supply Chains
Demand for medical PPE’s increase. PPE [Personal Protective Equipment like Face mask, Gloves etc.] was usually used in the first stage or to treat over-infected patients but in the current situation all those working in the healthcare sector as well as others have to wear this PPE which has increased the demand for it and has become a big challenge to the Healthcare Supply Chain.
Lean & Just in time approach to cost reduction of medical supplies will not be applicable in this situation. For maintaining smooth operation or patients services organization need to stock more items that reason the cost of Inventory going high, due to the inadequacy of various medical items, hospitals have had to increase their stocks, which has led to a shortage of space for storage as well as Increase the cost of Inventory.
The sources countries are imposing export restrictions on medical supplies & raw materials. Most of the companies have been unable to export properly for various medical items and raw materials due to the restrictions on their export trade due to COVID-19, which has led to a sharp rise in the price of these products due to increased demand. Prices for specific medical items are significantly higher than the historical price and the Cost of Operating Increase i.e. Cost of sterilization, Use of disinfect items Increase.
Global and local logistics constraints - Since the worldwide communication system is currently closed, it is not possible to exchange goods in the normal process, which is why many unscrupulous suppliers stockpile goods and increase their prices.
Increased infrastructure - The demand for various products is increasing due to the construction of infrastructure in many temporary hospitals, especially the supply of various medical devices and beds, which has become a very challenge to supply.
Recommendation for Healthcare Supply Chain Management in Pandemic.
Healthcare Supply Chain Management Sustainability depends on how we use the supply chain system. Sustainability mainly depends on people, environment and economy. But the key elements of healthcare supply chain sustainability are people and the economy. Healthcare supply chain is carrying out how much people are benefiting by sustainability and how important it is economically. We need sustainable supply chain management to deal with the current situation. Sustainable Supply Chain Management Stand by combining available resources and supply systems. Healthcare supply chain management sustainability will depend on certain things that I am going to describe below.
Establish and deploy a medical and hospital spend category-specific demand planning and sourcing process guided by relevant tools and methodologies:
Engagement of Stakeholder in Healthcare – stakeholder play a very vital role for establishing the sustainable supply chain. A good correlation with stakeholder run the supply systems properly. The key stakeholders: Patients, Providers, Payors, and Policymakers. Policymakers establish the framework within which health care is provided to the country’s citizens. In Bangladesh, we concede, “policymaker” is a synonym for “Ministry of Health” or the concern authority. The policymakers aggregate data from patients, providers, and payors to develop population-level metrics that inform their health and health economic policies. Patients are typically citizens. Policymakers have an energetic duty to this population, and the country’s policy framework is established to benefit patients. Patients receive care services from providers and are the beneficiary customers of the payors. Patients also may want to access information about their care via an electronic device. Providers operationalize care delivery within the policy framework. They provide health services to patients and maintain health information about them. The providers coordinate patient care with other providers as care team members. Many providers are independent businesses that must manage their own operations and finances. Payors operationalize the financial elements of the policy framework. Payors enroll patients as beneficiaries. They procure care services from the providers on behalf of their patient beneficiaries. They also must take on the actuarial task of ensuring the financial sustainability of the care program. They report to policymakers.
Spend Analysis & Sourcing History – The main task of building a sustainable supply chain is to analyze your entire sourcing history properly. Which will help you get an accurate and precise opinion. The right and accurate opinion in the current situation will increase your economic prosperity. It’s give you a proper guideline for planning your demand. Spend analysis is the process of identifying, gathering, cleansing, grouping, categorizing and analyzing your organizations spend data with a goal of decreasing procurement costs and improving efficiencies. Using real-time data and analytics will give you the insight you need you to save money and gain efficiency.
Supplier Portfolio Analysis – for building complete healthcare supply chain we need to categorize the supplier proper information like critical, routine, leverage, and bottleneck. By this analysis we find the potential supplier and their strength. In this way we can find out the regular or actual vendor.
Supplier Referencing & Management – by creating healthcare supply chain eco-systems to shear the supplier information between the systems and find out the potential supplier. In here over all supplier marking or we can say that refer the Potential supplier as well as find out the financial sustainability of the vendor. We can introduce the Group Purchasing Systems between the buyers which reduce the buying cost of a particular items. Like Examination Gloves.
Supply Market Analysis – before issuing the order to the potential vendor we need to analyze the Supply Market. In healthcare supply chain most of the time you have to prefer the choice of the Provider. But if we want to establish the sustainable supply chain we need the survey the market the demand, price as well as the quality of the potential items.
So, during this pandemic situation healthcare supply chain are mostly effected sector than others. Directly and indirectly the hospital supply chain has been most affected in this Covid-19 situation because the hospital supply chain depends entirely on all other supply chains like textile, pharmaceutical and consumer products as well as agro.
[i] https://www.wsj.com/articles/3m-ceo-on-n95-masks-demand-exceeds-our-production-capacity-11585842928
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