The COVID pandemic of the past nearly two years has acted as an accelerator for things that were already in motion. Among those things that it brought new attention to was the way healthcare organizations approached their supply chains.
For well over a half century, most healthcare supply chain operations were extremely rudimentary when compared to those of other industries. Key components such as contracting and distribution were outsourced to Group Purchasing Organizations and Supply Distributors.
Healthcare supply chains were considered to be transactional “departments” as opposed to being strategic components that were essential to the success of the enterprise. This arrangement worked well enough as long as hospitals remained single entities, but with the development of healthcare systems and Integrated Delivery Networks (IDNs), more was demanded of the Supply Chain.
It was during the early stages of IDN development that visionary leaders such as Bob Simpson of Consolidated Services of Florida (LeeSar) and Brent Johnson of Intermountain Health saw the value of combining the supply chain operations of their component members into a single site from which all locations could be served better and at a lower cost. At first, warehousing and distribution would be at the single location. Then, as years went by and opportunities presented themselves, other functions such as record retention and management, equipment storage, printing, biomedical services, laundry and linen operations, food services, pharmacy dosing preparation and central sterile supply would be added. Ultimately, a true Consolidated Services Center (CSC) had been constructed.
While sites like LeeSar and Intermountain and others were very successful and garnered national attention, most individual hospitals and smaller IDNs remained reluctant. By 2020, the number of true CSCs in existence was somewhere around seventy-five.
Then, in early 2020, the COVID pandemic began to decimate healthcare supply chains across the country. A new, harsh reality hit many IDNs squarely in the nose: You have to take responsibility for your supply chain. You cannot continue to outsource key components to third parties. You must be prepared when unexpected things happen.
Only you are ultimately responsible for your supply chain.
During the pandemic, most organizations did what they had to do to survive. The demands of the short term trumped long term planning, as organizations did what they needed to do to keep the doors open and continue to treat patients. But, as the heat of the nearly two yearlong moment began to subside, many IDNs began thinking about building their own CSC.
An old song has a line- “Fools rush in…” and by far the biggest mistakes an IDN can make when it comes to considering a CSC is to go too far too soon with the wrong partners. Choosing the right partner to help you make the decision to build or not to build and then implementing the right process are the two key elements of the process.
Choosing the Right Partner.
CSCs represent giant opportunities for others to make money. GPOs see them as a way to keep key customers or gain new ones, as do Supply Distributors and other service providers. They will often offer their services at a steep discount or even “for free” to help you make the decisions on what to do and how to do it. Caveat Emptor! Keep these things in mind before you choose a partner:
We at St. Onge have designed and started up over 500 distribution facilities for organizations from all industries, many fortune 100 companies, since our inception in 1983. The following steps are what we recommend.
Let us help
Over the last 38 years, we at St. Onge have helped countless organizations both within and outside healthcare plan the future of their supply chain operations. Through our design process, we perform an intensive level of due diligence to learn our clients’ needs. Site tours, detailed interviews and data drive the models and simulations we use to develop a thorough understanding of our client’s day-to-day activity from an efficiency perspective. This process validates our understanding of the client’s issues and provides the foundation for developing the relationships required to create innovative solutions.
St. Onge Company has grown steadily and developed a client list that includes many Fortune 500 companies and several world-renowned institutions. We have completed approximately 5,000 assignments for over 1,000 clients located through- out the United States, Canada, Mexico, the United Kingdom, Europe, the Middle East, the Far East, China and South America.
Our past projects cover a wide variety of Institutional, Commercial and Industrial applications for clients such as Johns Hopkins Hospital, Dana Farber Cancer Institute, MD Anderson Cancer Center, Rush University Medical Center, Duke University Medical Center, St. Jude Children’s Research Hospital and King Saud Abdul Aziz Hospital, as well as with their architecture firms. For these clients, we have developed a strong familiarity with the challenging logistics and related real-time issues associated with hospital operations, including campus supply chain strategies, materials management master plans, departmental optimization, facility designs and information systems to plan, direct and coordinate the movement of materials. Some of these solutions are highly automated; all are highly effective.
If you find yourself interested in developing a resilient supply chain operations strategy that will lead you into the post-COVID future, please contact St. Onge. Our experts stand ready to take a look at your operation and find the opportunities you may have overlooked. You can reach me at firstname.lastname@example.org or call me at 717-818-0791.