(June 2021) – As a perennial student of all things supply chain, I've come to trust the best practices of our industry. They are tried and true, and they rarely, if ever, fail us. One of those long-held concepts in our profession is the practice of just in time. JIT makes sense from a business perspective, a patient-safety perspective, a LEAN perspective and a space-utilization perspective. Understanding there are some occasional, necessary modifications to JIT, based on geography, seasons and supplier performance (which are topics for a future article), I think we can all agree it makes sense to keep just enough product on hand to do our job but not so much as to clutter our storage areas. Clutter is often the result of 'just in case' thinking, whereas, JIT is a sound concept that is widely accepted in the supply chain profession.
Since I first learned of the concept of JIT, I trusted it based on historical performance and my experience. That is why I was just as surprised as everyone else, 15 months ago, when we submitted product orders for all types of personal protective equipment and related supplies, and we were told by our primary suppliers these products were not available or at least not available in the quantities we requested. We were told these products were manufactured in China and other countries overseas, and due to the devastating effects of COVID-19, there were manufacturing and transportation delays and shortages throughout the world.
To exacerbate the problem, when we looked into the PPE stockpiles we had on hand, 'just in case' of an unexpected disaster, we determined the calculations we had used to determine days-on-hand were based on our normal, average daily usage that existed pre-COVID-19. With the rapidly changing Centers for Disease Control and Prevention, World Health Organization, National Institute of Health and all the other agencies changing PPE requirements on a daily or weekly basis, we quickly determined a normal, 15-day supply of PPE amounted to about four to five days worth during COVID-19, and that was if we rationed those supplies.
Naturally, this was sub-standard, so all sourcing and procurement teams went into immediate overdrive. We needed PPE, and we needed it fast. We received negative responses from suppliers more often than we received affirmative responses. When our primary, preferred suppliers couldn't help us, we quickly shifted directly to the manufacturers. When the manufacturers couldn't help us, we shifted to secondary and alternate suppliers. There were times PPE was so critically short that some in our profession briefly flirted with the idea of using gray-market suppliers.
In the end, most of us were able to keep our heads above water, thanks to the valiant efforts of many people in the industry. Hospital sourcing and procurement leaders pushed their teams to overcome obstacles. Networking with other leaders in our industry, we were able to share information about the dead ends we hit and the successes we were having.
The lessons many of us took away from this event is JIT for PPE is a moving target at best, and a SWAG at worst. We can't always depend on our normal suppliers during abnormal situations. We can't always depend on our normal manufacturers when they are trying to supply globally, under abnormal conditions. Suddenly, it didn't make sense to keep only seven, 14 or even 30 days of PPE on hand. Many of us realized this situation may arise again due to the delicate and tightly linked infrastructure of the global health care supply chain. If we have even one weak link in the chain, we could suddenly find our facilities short on crucial PPE once again.
In order to minimize the risk of running out of crucial PPE, many leaders decided to increase levels of PPE DOH to 60 or even 90 days. Personally, I'm a proponent of the 60/90 rule, 60 days is the reorder point, and 90 days is the maximum on-hand. Without a doubt, there are some common-sense considerations to take into account with PPE levels; specifically, available storage space, expiration dates and stock rotation. However, if a facility has the available storage space and can accurately rotate stock to avoid product expiration, I think it would be wise to maintain an abundance of DOH, when it comes to PPE.
As Healthcare Supply Chain professionals, we are responsible for acquiring, storing and delivering the necessary supplies to protect the lives of our patients, co-workers and visitors. Every health care leader I have talked to has indicated they never again want to be at the mercy of a delicate supply chain that can rapidly crumble during an international crisis. The desire to be self-sufficient and minimize risks to patients, staff and visitors is what drives many supply chain leaders to reconsider 'just in case' vs. 'just in time' when it comes to PPE. It's advisable to have enough PPE on hand JIC it's needed, but not so much as to be too much.
If you haven't done so already, it is time to consider and decide what is right for your facility and your peace of mind. Good luck!
--Craig Rohleder