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HAVING MY SAY


can still be negatively impacted by unfore- seen upstream events. Having visibility to what needs attention most in these situa- tions is imperative and requires good data and being able to present that data in a meaningful and actionable way. Hav- ing a collaborative multifunctional team to assist with decisions is also needed. Having the knowledge base of a team with the data allows for creative decision making so ongoing commu- nication is needed as well. With data, people and ongoing communication, the best decisions were made to allow our hospital and network to weather what has been a very disruptive six months.” Compared to most, Johnson may just be the Nostradamus of the healthcare supply chain as it relates to risk mitigation and business continuity planning. While many talked about incorporating lessons learned into future activity, Johnson hinted at the solution: Develop a formal Risk Mitigation/ Business Continuity Plan and arm it with the components needed to ensure success: • People • Process • Technology • Data


Prior to my attendance at the meeting in Tempe, I had attended an internal meeting at J.A. Sedlak in which Dennis Heppner, one of the company’s senior logistics con- sultants, had described an engagement with a retail customer that involved the develop- ment of “what if” scenarios regarding work disruptions at the organization’s manufac- turing sites. I was intrigued by two aspects of the presentation: 1. technology existed to create algorithms that could predict the impact of such things and 2. an organiza- tion would be so forward-thinking as to provide resources (both fiscal and human) to proactively deal with the issue. I asked Heppner to explain what he and his team did for the customer. “We created a model that quantifies the impact of various disruptions in the net- work (from catastrophic loss to less severe partial disruptions),” he responded. “Ad- ditionally, Decision Trees and communica- tions plans (internal and external) provide actions to be performed…. This includes di- rect labor associates, appropriate functions such as Supply Chain, IT, Real Estate and HR, as well as suppliers of inventory and services (transportation, temp labor and real estate brokers). While every contingency is not feasible to model, the most likely and impactful scenarios provide the client with a plan to react.” The work done by Sedlak for the retail


customer incorporated two of the four elements of a successful plan: Process and


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Technology. The retail company’s com- mitment to doing something provided the third: People. What about the fourth: Data? One of the speakers at the symposium in Tempe was Bindiya Vakil, Co-founder and CEO of Resilinc, a company that maps the supply chain down to part and site level, and aggregates and provides this data to help organizations predict their critical failure points so they can develop proactive management strategies to mitigate risk and ensure business continuity.


Describing the problems faced by orga- nizations, Vakil said, “Supply chains have become tiered, and suppliers are operating all over the world. One supplier can oper- ate in 10 to 20 countries, and raw materials and components could travel two to three countries before making their way to our factories.


“Most companies know their direct sup- pliers,” she continued. “They often know where their direct suppliers are located, but may not always know the specific global sites that build each raw material. This type of information is not systematically avail- able, but rather is known by the people who manage these suppliers.


“Even more problematic is that suppliers may use common sources and so dual- sourcing at the tier 1 level may still leave the company exposed to sub-tier risk. “This type of information is not typically available, or if it is available, it resides in people’s heads/laptops and remains siloed within the organization. In a highly complex supply chain environment where hundreds of suppliers make thousands of raw materials in 40 to 50 countries around the world, having information in siloes makes it difficult to predict problems quickly and respond/mitigate proactively. As a result, most companies hold high levels of inventory, and when that is not available, end up paying massive premi- ums to acquire raw materials during a


disruption/allocation situation. If they are unable to act quickly to secure sufficient supplies, they may end up going on al- location, or their factories may go lines down due to lack of materials. This leaves cash tied up in WIP [works-in- progress] inventory or finished goods that cannot be shipped due to small inexpensive parts being disrupted. Worst case, customers may buy other materials, or in the case of healthcare sector, it might be a life-threatening situation if the patient is unable to get treatment or drugs.”


Resilinc becomes a source of the fourth element of a successful plan: Data. What would a successful plan look like? Here are my thoughts: • People: Healthcare organizations are often reticent to commit resources (i.e., FTEs) to a problem. They simply pile additional tasks onto an already overbur- dened staff. Business Continuity Planning requires specific skill sets and a full time concentration of activity. Without a dedi- cated resource leading the initiative, it is destined to fail.


• Process: Given the presence of assigned resource(s), a formal Business Continu- ity/Risk Mitigation Plan should be de- veloped, approved and put into action. This could be done alone, but would most likely require outside assistance to get started.


• Technology: Scenario planning and “What-If” gaming, such as that done by Dennis Heppner’s team at Sedlak, can help ready an organization for anything that might occur.


• Data: Participation in an ongoing subscrip- tion service such as Resilinc would keep organizations abreast of and thoughtful of the fluid and dynamic changes everyone faces every day. That said, organizations need to be mind- ful of the need to plan and also of the need to bring People, Process, Technology and Data into the mix. It’s not as simple as Paul Simon advocated. You can’t: Just slip out the back, Jack, (you’ve got to) make a new plan, Stan Don’t need to be coy, Roy just listen to me Hop on the bus, Gus you do need to discuss much “Planning’s the key, Lee It will get yourself free.” HPN


Fred W. Crans currently serves as Healthcare Consultant for Sedlak Supply Chain Consul- tants, and is a veteran industry observer and frequent HPN contributor with decades of experience as a hospital supply chain leader. Crans can be reached at fcrans@jasedlak.com.


hpnonline.com • HEALTHCARE PURCHASING NEWS • October 2018 53


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