Impact of Supply Chain Mayhem: OR Leaders Stress Preparedness for 2022
What happens when global supply chains—typically operated lean across the board—are hit with a once-in-a-century pandemic? An ongoing, collective lesson in economics.
The problem isn’t hard to understand: COVID shutdowns brought manufacturing to a near standstill, the demand for goods increased, and there is now a shortage of workers for shipping yards and warehouses.
How have supply chain woes impacted hospital ORs? A recent article in Fierce Healthcare reported that hospital executives and supply chain managers believe the pandemic has uncovered soft spots in the supply chain and that organizations could be doing more to fine-tune efficiencies.
Directors of Surgical Services M. Trevor Bennett and Darrell Daniel say that for them, supply chain problems have not been any worse than a pre-pandemic year. But domino effects are a real thing; 2022 could prove to be another unpredictable year. Bennet and Daniel recommend that OR leaders stay ahead of the curve to avoid adding to the already heavy burdens of staff.
Be Both Chicken Little and Pollyanna
Bennett, Executive Director of Surgical and Interventional Services for Swedish Health Services in Seattle, says his organization has not yet experienced anything more than the typical hiccups and bumps in the supply chain.
But with port authorities continuing to struggle with full cargo ships unable to move, he believes that leaders need to prepare for a possible turning tide on par with the supply chain shortage caused by Hurricane Maria that hit Puerto Rico in 2017.
“That absolutely decimated our medical supply because come to find out, 30 of the world-leading medical device companies are located in Puerto Rico,” Bennett says. “All of a sudden, we didn’t have IV fluids. We were rationing IV fluids and finding alternative solutions to obtain them. We learned that your stock on hand is one thing, your supply chain is another, and being proactive is the third piece.”
Looking ahead to 2022, Bennett believes supply issues caused by hiccups in manufacturing, shipping, and receiving, plus nationwide staffing shortages, will come into play. He says organizations need what both operation leaders and visionary leaders bring to the table.
“Someone has to be a little bit ‘the sky is falling.’ How do we prepare for the worst-case scenario? And then you have the other voice that says everything is going to be totally fine. You can find a happy medium between those two because doomsday is not the right answer, but neither is assuming everything will work out great.”
Part of solving problems is getting to the root cause. One of Bennett’s favorite quotes is from Desmond Tutu: “There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in.”
“We get so caught up in the day-to-day and just barely keeping our heads above water,” Bennett says. “As leaders, it’s our fiduciary responsibility to be able to have that voice and foresight to be able to respond to needs.”
Staffing is a Part of the Supply Chain
“Our biggest supply chain woes are staffing shortages,” says Darrell Daniel, Administrative Director of Le Bonheur Children’s Hospital. “Organizations are paying travelers $130-140 per hour, but their staff gets paid $40 an hour. Eventually, people will quit. When the cost of staff goes up, profit for the hospital goes down. It’s not sustainable.”
Another consequence of COVID is that it’s now more difficult to substitute a temporarily unavailable item. This usually happens because a hospital system doesn’t have any back stock for such situations. Many orders are made 24-36 hours in advance, and if there is no availability, that results in canceled surgeries.
“It costs a little bit if you don’t have the space within your facility, and it’s a lot of work to get it started on your high-ticket items. But maintaining a warehouse is the best way to do it,” Daniel says. “When we were hit with the IV shortage , the organization I was with had over a dozen pallets of fluids in our warehouse. While everyone else was unable to do surgeries, we were still rocking and rolling.”
Keeping PAR (Periodic Automatic Replacement) levels high needs to be balanced with a well-managed supply chain. One can quickly get into a bind where you are saturated in stock and are forced to throw things away.
“We’re not out of the woods yet, and we don’t want to get comfortable,” Daniel says. “Keep your stock up, but be efficient, so you’re not wasting inventory.”