Looking beyond the pandemic to re-imagine the healthcare supply chain

The pandemic exposed the flaws of healthcare’s global supply chain. Since then, the industry has been working to transform supply chain operations to be more resilient amid continued shortages of vital equipment. In this conversation with Jim Boyle, executive vice president of Medline, he shares the biggest lessons since the public health crisis and how Medline has responded, including investing in more capabilities for their provider partners.

How have the strategic operations of the healthcare supply chain changed since the pandemic began?

JB: Since the onset of the pandemic, there has been increased transparency of the overall resiliency and preparedness of the global supply chain, highlighting its ability — and inability — to manage sustained, long-term demand. The Strategic National Stockpile was built to support short-term demand spikes — for example, a natural disaster — but it was not built to support demand ten times higher than normal for more than 18 months.

When there is a crisis, you don't need products three months from now. You need them today. We must have the ability to respond in a much more rapid fashion. At Medline, we are committed to carrying more inventory than any other medical and surgical manufacturer and distributor in the U.S. We recently invested an additional $500 million in incremental medical supply inventory to ensure product availability and timely delivery to the healthcare providers we serve. The investment, completed at the end of the second quarter of 2022, brings our total on-hand inventory to more than $4 billion and marks another step taken by Medline to help healthcare run better.

What are the core competencies to effective diversification of the supply chain?

JB: Supply chain diversification needs to be evaluated and implemented on a global scale. The recent baby formula shortage is a prime example of the risk when the strategy does not take a global approach.

Medline has put in place an intentionally balanced approach to global product and manufacturing diversification, which includes a product footprint spanning over 20 countries worldwide and expansive North American operations. Since 2018, Medline has invested $2 billion in our distribution centers, manufacturing capabilities and IT upgrades, with an additional $400 million planned for 2022.

How does greater transparency of the supply chain support better risk management?

JB: One of the number one lessons learned over the pandemic was not only transparency, but frequency and consistency of communication — ensuring we provided 100% of the information, whether good, bad or ugly, so our customers could make the best decisions. I believe consistent, ongoing communication and collaboration with customers, suppliers, government agencies, and even competitors, should be considered a best practice across the industry for future supply chain operations.

How does Medline work with its provider partners to effectively stockpile vital equipment?

JB: Stockpiling is critical for resiliency and preparedness for the next pandemic. Fortunately, it’s currently at an all-time high. With providers attempting to purchase an incredible amount of supplies, often with no place to store them, nor the expertise to manage them, we took a closer look at our infrastructure. We developed a robust plan to support stockpiling for our customers. Medline’s more than 28 million square feet of warehouse space enables us to provide inventory management services, expand customized third-party logistics (3PL) capabilities, and further support Medline’s CERT^TM (Customer Emergency Response Tools) program, a subscription-based service to store and manage critical emergency inventory.

How should the healthcare supply chain continue to improve and evolve?

JB: I think it would be a major failure if we didn't take the learnings from the pandemic and make them permanent parts of our supply chain process. With stockpiling, for example, we must create efficient tools and mechanisms to ensure that we're rotating that inventory consistently so that it doesn't become obsolete. That is something we are continuously working on with our customers.

As an industry, suppliers and providers — all the way from our dock to the supply room in the healthcare facility — have to be willing to look at the supply chain as a complete end-to-end solution. If we can work in unison, we can reduce duplicative efforts and create a much more streamlined approach to overall supply chain resiliency. This will take work, but I am confident we will achieve a much better outcome as a team.

To learn more visit: medline.com