Business Advisor: Your Blueprint for Supply Chain Preparedness

Are you ready for potential disruptions in getting essential materials?

Congratulations, ASC leaders! You survived the summer vacations, volume fluctuations, lack of daycare and listening to physicians complain about the number of holidays that fell during their block time. Now you are ready to complete the required tasks for the rest of the year and plan for 2025.

OAS CAHPS anyone? Need I say more?

Overlook at your own peril

Leaders may be desensitized by the mass notifications of supply and drug recalls, backorders, shortages, shipping delays and substitutions, but don’t let your guard down. Whether you are directly responsible for ordering medications and supplies or you have delegated that function, now is a good time to evaluate your processes.

Medical products including drugs, biologicals, medical devices, medical equipment and the manufacturing processes are subject to more government oversight and regulation than supply chains for most consumer goods. Disruptions can occur at any point in the supply chain and the results vary from minor inconveniences to a catastrophic sudden halt of the manufacture of critical items.

Again, you may be accustomed to medication and supply shortages, but alternate options are usually available. However, in 2017 Hurricane Maria hit Puerto Rico and cut off power to a major manufacturer for four months, crippling production of normal saline. The manufacturer was responsible for supplying nearly half of the IV solutions used in the U.S. and other companies couldn’t meet the demand.

Independent, freestanding ASCs are particularly vulnerable to supply chain disruptions that can prove to be detrimental to the operations of the center. Take a minute to consider all the potential causes of supply chain disruptions. They include natural disasters, pandemics, health crises, regulatory changes, failures in technology, labor strife and transportation issues. Now think about the recent events that have occurred: Natural disasters, a global pandemic, changes to international trade rules, organized strikes in several industries, massive computer system outages and physical barriers blocking key shipping routes for extended periods.

There are so many steps in the supply chain process and one missing step could significantly impact your center if you aren’t prepared. Although you can’t predict the future, there are a few tactics you can implement to minimize the impact of supply chain disruptions. Start by asking yourself these key questions to identify gaps in your process and using the action items that follow suit as a guide or preparedness checklist. For instance:

Have you conducted a comprehensive risk assessment to identify potential supply chain vulnerabilities? Identify critical supplies, medication and equipment that your center relies on for daily operations, specific procedures or patients.

Have you identified alternate sources for these items? Establish relationships with multiple suppliers to avoid dependency on a single source. Communicate with your suppliers about their own supply chain risks and mitigation strategies. Approve automatic substitutions in advance for critical items. Secure collaborative agreements with facilities to share resources during a disruption.

Do you maintain an accurate and current inventory list of critical items? Assess your current inventory of critical supplies and estimate the duration of availability. Conduct audits or drills to test your response to supply chain disruptions.

Do you have a plan to communicate supply chain issues with providers and staff? Appoint one person responsible for communicating supply chain issues to key stakeholders. Create a designated area to post shortages of critical items and update regularly. Provide daily updates to end users about current shortages and encourage protecting the current inventory from opening in error or waste. Include supply chain disruptions in your emergency operations plan.

Do you use technology to monitor and manage your supply chain in real time? Use the technology to its full potential to accurately anticipate supply needs. Leverage the technology to gather data, monitor trends and automate alerts on shortages.

Are your supply chain practices compliant with relevant regulations and standards? Compare your policies and practices to your regulatory and accreditation requirements. Ensure all alternate suppliers meet the requirements. Establish relationships with all alternate suppliers.

The potential consequences of supply chain disruptions include financial losses, operational inefficiencies and patient-care issues. If we’ve learned anything in recent years, it’s to expect the unexpected. Understand your current situation, increase awareness of vulnerabilities and start the conversations with key stakeholders. An overview of supply chain processes, inventory control, negotiating vendor contracts, and case costing analysis is included as one of 15 streamlined online modules included in AORN’s revamped ASC administrator course. Learn more about ASC Academy: Administrator Essentials at www.aorn.org/education/education-for-the-asc/asc-leadership-development. OSM