The “Supplier Spotlight” and “Provider Spotlight” series is our interview of a supplier or provider in a standard Q & A format.
This month we had the opportunity to interview Ed Hisscock, SVP of Supply Chain at Trinity Health.
Healthcare Links: How has your supply chain needs changed post-Covid?
Ed: We’ve had to carry additional PPE and other pandemic items in large quantities. We have our own distribution system and are maintaining sufficient supplies at our main warehouse in Fort Wayne, Indiana.
We’ve been hit financially, as have most healthcare providers. We’re adjusting for that, but I guess as it strictly relates to supplies, we did okay. Instead of buying hip implants and knee implants, and other products for elective procedures, we of course were out buying expensive PPE.
Healthcare Links: With the loss of elective procedures and subsequent revenue what do you anticipate is in store for healthcare systems and providers 1 year, 3 years down the road?
Ed: I think that financially our organizations will lean out. We will become somewhat smaller from an administrative perspective. However, I also believe that we will make additional investments in the supply chain. Like I mentioned, we have found it necessary to develop regional stockpiles, which requires additional investments in warehousing space. I know many others have had to do the same thing. Revenue will come back as patients gain confidence.
Healthcare Links: How are you working with suppliers different today than pre-Covid?
Ed: Well, fortunately for us, I don’t think any different. We are a little less dependent on the usual distribution channels, prior to Covid we were already doing some direct to manufacturing sourcing. We also have the ability to bring products from a Port in Containers, right into our distribution facility. We’re just doing a lot more of that type of sourcing than we were doing pre-Covid.
Many organizations probably learned a lot about the depth of their supplier relationship from Covid. And I think in some instances they’ll have found that they have really good relationships, and they support each other effectively, and then other relationships they have found to be too transactional, and it cost them in times like this.
Healthcare Links: If a supplier has no current business or relationship with you or the system, but may have a worthwhile solution, how would you counsel them to connect?
Ed: Suppliers have to bring a value proposition to our attention. If it’s something we’ll take in house, then we’ll do that and tend to it with our sourcing team. I imagine some organizations are doing more direct sourcing and contracting. Suppliers will probably find the doors a little bit more open if they’ve got a compelling solution.
Suppliers will find that we have, out of necessity, developed ways to more easily connect and make sourcing more streamlined. For example, anybody interested in doing business with Trinity could go to our online portal and register to do business with us. And then we’ve got a process to follow up with them and let them know we’re going to take a look at that in a month or six months, or that’s not on our radar, those sorts of things.
Healthcare Links: What operational changes have you made at Trinity since the start of Covid?
Ed: Operationally there’s been a lot of change. We have had to take our distribution center that was historically covering about 60% of our enterprise and convert that to cover 100%, including all of our non-acute facilities. That means we’re not just pushing products out daily on Trucks headed for just our Ministry locations in the Midwest. We’re also now getting into small parcel business to push product LTL and commercial carriers around the country to serve all of our Ministries, and sometimes in pretty small quantities.
Our data team has dropped everything they were doing to focus on data we needed for the pandemic response. Out of that, we’ve learned the benefits of truly an agile environment where you work on a few things at a time and get those done before you work on anything else. When we focused, we stood up some data capabilities and dashboards that before Covid would have taken us more than a year to turn around. We’ve had good learnings about how to interoperate with our data and informatics teams.
We’ve matured our analytics capabilities. So what happened yesterday? What’s in stock today? And how do we need to adjust? For example, we didn’t have visibility to certain pharmaceuticals, and needed to know how much was on hand at each of the hospitals. We didn’t have visibility of products that were available in the laboratory for testing for Covid.
What we did was we linked our consumption of product and stood up dashboards to know what we used yesterday and calculated out over 7-14 day histories to get a gauge of where the organization was at this point in time, and then we applied that consumption to several different models.
We are now looking at different models to forecast our demand, our epidemiology team put together some predictive modeling using our Covid patient burn rates against those EpiModels to forecast what to expect downstream. And now we’re using that data to actually look out and identify where products might need to be for regional stockpiles to make sure we are in a better preparedness state.
Healthcare Links: How do you think healthcare will change from this?
Ed: I think there’ll be several changes, but I do believe that it will change how we fundamentally work with our supplier base. I referenced it earlier. We’ve grown up in a transactional relationship between buyer and seller. It’s generated a lot of waste and it’s put us at a lot of risk. And I think that to mitigate that risk and to eliminate the waste, you’re going to see health care providers investing in the supply chain, both physical assets and technology, as well as talent. Our senior leadership teams have learned a lot about the value of supply chain and the risk of not investing. I think the sophistication will grow, and suppliers will be held to different standards. Specifically around understanding where products are manufactured, and their manufacturing practices.
As an industry we’ve learned a lot about working together since Covid. We came through this, recognized some deficiencies, made rapid improvement and are now reflecting on the experience to ensure longer term improvements are implemented.
Author: Ken Murawski
Ken Murawski founded HealthCare Links in March of 1993 with a simple mission: to become a sales/marketing resource focused on Corporate Accounts–matching companies with cost effective products and services to major Healthcare Systems, Alliances, Integrated Delivery Networks and Group Purchasing Organizations.
Call me if you’d like to discuss a strategy that works for you. 914 953-9363.