Taking The Supply Chain Pulse
St. Onge’s Healthcare Hall of Famer and industry icon, Fred Crans, chats with leaders from all areas of healthcare to discuss the issues of today's- threats, challenges and emerging trends and technologies in a lighthearted and engaging manner.
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Taking The Supply Chain Pulse
Part 2: Navigating Healthcare’s Supply Chain Crisis: Insights from the Inside
Healthcare can instantly notify you about a critical lab result, but struggles to track the implant in your body. Why? Ed Hisscock, Senior Vice President of Supply Chain Management at Trinity Health, has spent his career wrestling with this paradox.
Ready to understand why healthcare supply chains need transformation? Subscribe, leave a review, and share this episode to join the conversation. Have questions or want to suggest a future topic? Contact Fred directly at fcrans@stonge.com.
Thank you for joining us for the second part of last week's episode of Taking the Supply Chain Pulse. This is Megan with St Onge Company here to introduce Ed Hiscock, the Senior Vice President of Supply Chain Management with Trinity Health. This episode will conclude our discussion on supply chain concerns that health care practices could experience in the future. And now here's our host, fred Kranz experience in the future.
Speaker 1:And now here's our host, fred Kranz. One of the things that I just throw out there to you is it's difficult to time up with the academic schedules of the universities as you start this out, so that you can get a goodly number of folks that have finished products ready in time for whatever competition you're involved in. If you know what.
Speaker 3:I mean, yeah, it is, and. But I also think there's there's a lot of benefit here, because another thing that we've done with university is engage them in some of the collaborative work that we do with other health systems and they come in as kind of a convener, and currency in the academic world is publishing research and publications. So come out, come in alongside, participate in a project that we're doing, document what worked and what didn't work in that project and the outcomes, and then you can have the publication rights to that research that you did, helping us, us through the and documenting the work we did. And now that becomes public domain. Right, the names are all protected, but hey, if you're thinking about doing this, here's some research that applies and something Trinity Health or this collaborative did. Here's some things that worked, here's some things that didn't work. But it all becomes public domain and now kind of serves as a document to raise all ships. You know it comes as a pool, yep, yeah yep, that's great.
Speaker 1:Well, the third thing that is your biggest platform usually is the idea of data and any supply chain that's out there. For it to run successfully, it has to have plentiful, complete and accurate and timely data. Healthcare has missed on all four of those for most of my career, so give us your soapbox on this for the next eight minutes.
Speaker 3:Yeah well, and I won't climb all the way up on the soapbox, it would take more than eight minutes, but it just, you know it just the EHCR back in the day documented all of the efficiencies. And I mean, if you and I were having this conversation I was speaking one language, you were speaking another we would not have a very efficient exchange and we certainly would only educate a portion of whomever is consuming this podcast. Right, it's just, it's so fundamental that we have to have standards in the way that we communicate and it just, you know, it wasn't that long ago I got a text from my grocery store, you know, because I checked myself out at the checkout stand and I've given them my cell phone number. I got a text message said Ed, that peanut butter you bought has been recalled. Bring it in, we'll get you a refund or you can swap it for another peanut butter on the shelf, for a different lot number or whatever. And when I think about that, they had that data, like right now, right at their fingertips. As soon as that was communicated from the supplier that this has been recalled, they could get to their customers and let them know.
Speaker 3:And we have laws in our industry and regulation that we have to abide by. Smda that says we have to track implants that we leave in the human body so that we can communicate with them. But the means by which we do that, it's a little better today. When I first started up on this soapbox you had to go to a three ring binder to find the little stickers that came off of the implant to know which patient received it right. But today it's reposited better in an EMR by scanning. So I think we've made strides, but there's still enough issue because we're not using those data standards in our day-to-day transaction streams. I order a part number from a supplier that may or may not be embedded in a barcode on the package and should be right and it should be. We just scan that barcode and then use that to facilitate the transaction between the parties instead of having to convert that back and forth.
Speaker 3:So there's efficiency and there's an element of safety. I've recently engaged with the folks in the UK who have branded their rollout of UDI scan for safety to help motivate caregivers to think about and to support scanning in the care setting, because it is an effort to make sure that patient is safe. What you're scanning, you'll know that that has been recalled, that it's expired or not. It's just. There's a layer of protection there for the patient that I think we need to be attending to, as well as driving the efficiency. Think of all the people that spend all of their time and energy doing nothing but just trying to make sense of data in our industry. It's appalling.
Speaker 1:Yeah, and we want to measure our effectiveness and we can't measure our effectiveness because we cannot accurately determine what the hell we're doing with what products, with so many things because of poor data and also, I think there's a poor idea on the end of the people that might have to do some of the data input, say the scanning or whatever of the importance of what they're doing. A lot of times they think it's just an inconvenience or nuisance work that they're doing and they really don't want to do it. Is that fair? Is that getting any better?
Speaker 3:No, yeah, I think.
Speaker 3:Because, in my opinion, because they're not educated on why, you know, I think supply chain, rightfully so, it's our accountability to take cost and manage cost in an enterprise, right, so that's the association.
Speaker 3:When supply chain shows up and say, hey, can you start scanning this stuff for me, they're thinking, oh great, so we can get it cheaper, right, well, yeah, right, so there's efficiencies that we will gain.
Speaker 3:But what those efficiencies also do is make sure that you can, like I mentioned earlier, trap for expired product or recalled product. You can also make sure that your transaction is more effective and efficient, which helps ensure the inventory is where it needs to be, right when, when you scan yourself out at the grocery store, that scan is immediately available to the supplier and the supplier knows that in that local Kroger, ed just bought a dozen eggs and the hen's laying, so I got to package up another dozen eggs and make sure that's back on the shelf or I don't get a sale Right. So that's how it works in grocery. Shame on us that we can't scan and make sure that somebody knows a critical supply in our OR or cath lab has just been consumed and it needs to be replenished. Right, it's the right thing to do and it's so simple of a concept and it's so tried and true and working in other industries. Again, just shame on us for having not moved that needle further faster.
Speaker 1:Well, I'm feeling bad now, Ed, because just yesterday I went to the grocery store and I bought 24 jars of cat food the little bitty cat food and there was one missing of the thing of 24, so I pulled another jar can out of another thing I thought was the same one, and when I got home I realized that only 23 of those were the same and one was different. So I threw Walmart's national inventory off by one can of 88-cent cat food and I don't know how I'm going to live with myself to the end of the day. But I'll have to deal with it.
Speaker 3:Well, if you're a frequent shopper, you might get a text from Walmart and say hey, buddy, If you're a frequent shopper, you might get a text from Walmart and say, hey, buddy.
Speaker 1:But you know, for folks out there who don't know what EHCR was, it was called the Efficient Healthcare Consumer Response initiative. That was done in 1997, and the industry that they sort of monitored to compare to health care was the grocery industry, which coincidentally shares a profit margin that is wafer thin, as is health care, so they were able to find a tremendous amount of conformity within that industry as compared to none on our side of the spectrum.
Speaker 3:Is that fair? Yeah, it is. And another thing that I'd share in that regard, Fred, is that and I know a lot of people have heard me say this before, but I do think our industry is very comparable to grocery, you know, with with criticality of the supplies and fickle demand. Right, COVID happened and all the toilet paper flew off the shelf who would have thought of that? Right? But the SKUs themselves, lot and serial number, Lot and serial number, pricing, expiry, shelf life that has to be attended to, cold chains, frozen product, all those things that we also have to. To use my hen laying an egg example from earlier From where that product is made to the consumer takes about 18 to 20 percent SG&A.
Speaker 3:So about 18 to 20 percent of their organizations, P&L, is tied up in getting product from where it's made to where it's consumed Healthcare SG&A. For our suppliers the average is like 35 to 40 percent. So we've got 15 to 20 percent waste we can take out of our industry if we adopt some of those practices that are in play in the grocery industry. So there's something there, right?
Speaker 1:And that's what we're going to have to do, too, to remain financially viable. But I want to tell you, ed, you were wrong about one thing. It's very understandable why, when COVID struck, we ran out of toilet paper, because COVID scared the poop out of 345 million people in this country All right Point taken Fred.
Speaker 1:Well, ed, thank you for joining us again. It's always great to talk to you. You're a go-to guy for me when it comes down to data and understanding the correlation between data and activity and KPI and operations and I will be personally sad when you retire in July and I'll be pushing 80 years old and still working and you'll be out there somewhere with Jimmy Buffett drinks in your hand and the Gulf of America participating in the good life. But it will have been well earned.
Speaker 3:Thank you, fred, and, like I said, I'm not going too far. I'm still going to remain active in the industry. I love what I do and it's easy to be passionate about helping your fellow human being maintain their health Right. So, yep, you'll still see me around.
Speaker 1:Good. Well, that's great. Okay, ed, thanks again for being on our program and hope to talk to you soon.
Speaker 3:Thank you, take care of my friend.
Speaker 2:And that's a wrap. As always, don't forget to subscribe and connect with us online, where you can find all of our episodes. If you have a topic you'd like to discuss or want to be a guest on the show, you can reach out to fred directly at f-c-r-a-n-s, at s-t-o-n-g-ecom. Thanks for tuning in till next time.
