Today the healthcare industry is facing many challenges with product availability, allocations and supply constraints.
Impacts from the COVID-19 pandemic have shown just how important it is to establish preparedness plans that address how healthcare facilities can best manage inventory in crises or for other specific needs. This includes determining your most important supplies for contingency stock scenarios, locating sufficient space, and getting the right support for your logistical needs. When building out your contingency stock plan, be sure to ask yourself the following questions:
- What are the high demand items for my contingency stock scenarios? How much should I have on hand?
Different contingency stock scenarios could include pandemics, natural disasters, or direct spend items. Personal protective equipment (PPE) will be in high demand in pandemic scenarios. Stay prepared by understanding your facility’s PPE utilization rate using the Centers for Disease Control (CDC) PPE Burn Rate Calculator. When facing a natural disaster, follow the CDC’s blueprints on its Natural Disaster and Severe Weather web page to best respond to earthquakes, floods, and more. For direct spend items, medical supplies purchased directly from manufacturers and not via a medical distributor, plan to include these supplies with your managed contingency stock. This strategy can help lower the risk of product expiration and obsolescence. And finally, involve your clinicians and value analysis teams in these decisions. You will need their clinical insights and cooperation to make this work. - How much space do I need? How should I store my organization’s supplies?
It is imperative to locate sufficient space for your contingency stock, and plan for space needed for up to 90 days of inventory on hand (DIOH). The COVID-19 pandemic has led to many states mandating a 14-90 DIOH for PPE. To get an idea of how to plan for space need, 90 days of PPE inventory for a stand-alone 350 bed hospital would be approximately 260 pallets/3,500 sq. ft. of warehouse space. Also understand what kind of storage space you require. Some product categories require temperature and / or humidity control, while others may have hazmat requirements. Be sure your warehouse can support these product specific needs. - Who are you working with to meet your logistical needs?
Get the right support when it comes to logistical planning and managing. Your contingency stock center requires inventory management to run like a distribution center, including the addition of labor, systems, and transportation to facilitate the center. Working with a healthcare distributor can give you an advantage. Healthcare distributors have full knowledge of healthcare logistics, which is crucial when navigating the dynamic supply chain. They can also work on your side to identify solutions when specific supplies challenges arise.
For more key elements to consider when planning your contingency stock storage needs view the infographic on our supply chain center. Visit cardinalhealth.com/strategicstock to learn more about our Strategic Stock Solution that can help you optimize time and space for your contingency stock needs.
More about the author
Paul Farnin is the Director of Supply Chain Solutions for Cardinal Health. He is responsible for new business development and leadership of the company’s Supply Chain Solutions service offerings. Paul has more than 30 years of experience providing leadership to hospitals and health care systems.