With the COVID-19 Demand Disruptions 3rd Party Logistics has gained, can hospitals gain too?

DHL, Warehouse, NSW, Australia

Rob O’Byrne from the Logistics Bureau and Saul Resnick, CEO Australia, New Zealand, & CEO Healthcare APAC at DHL Supply Chain, spoke about the impact of COVID-19 crisis on the supply chain environment for 3rd party logistics providers. Logistics providers have grown stronger from the crisis, however, will the internal hospital supply chain grow stronger too? For hospitals that do not use proper track and trace technology for locating circulating inventory, consignment goods and moveable assets this is unlikely.

The salient points that Saul and Rob spoke about were higher safety stock levels, a focus on decentralisation of warehousing to bring inventory closer to consumers, the need to source local products and services, a greater demand for 3rd party logistics providers to be more flexible and yet remain stable and a greater need to provide more B2C services.

In this respect, DHL is well placed to respond appropriately to hospital demand because they provide 3rd party logistics services to most medical device manufacturers and pharmaceutical companies that supply materials and pharmaceuticals to hospitals. In response to the pandemic, DHL was able to build a fully working warehouse distribution for Optus and another for Woolworths from scratch in five days!

Saul noticed that with the coronacrisis vendors are maintaining higher safety stock levels to avert possible shortfalls from supply chain bottlenecks. Anecdotal evidence from hospitals suggests that hospitals have also increased safety stock levels several-fold.

Ensuring supplies to save lives is the primary focus of hospitals. But beyond COVID-19 hospitals must focus on strengthening the internal supply chain. We know, as pointed out by the Auditor General’s report in Western Australia, (other states have published similar reports) that once items leave the hospital shelves they cannot be accounted for. Such waste arises from poor environmental design. Track and trace technology can seamlessly change the environment so that social behaviour change too.

The Post COVID-19 Hospital Supply Chain Response

In 1947 Kurt Lewin coined the term ‘group dynamics’ as a way of depicting how people and individuals behaved in changing social environments. He depicted behaviour (B) as a function (f) of a person (P) in an environment (E). His equation B = f (P, E) shows that if the environment changes then so do group and individual behaviours.

Changing the environment

More recently, several authors have shown how our environment shapes our behaviour without our realisation. Marshall Goldsmith, the author of Triggers: Sparking positive change and making it last, Thaler & Sunstein, the authors of ‘Nudge: Improving decisions about health, wealth and happiness’, Dr BJ Fogg, the author of ‘Tiny Habits: Small Changes that Change Everything’, and James Clear, the author of ‘Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones’.

The application of technology

Dr BJ Fogg has long believed that computers can influence our thinking and behaving. His doctoral thesis was written up in his book, ‘Persuasive Technology: Using Computers to Change What We Think and Do’.

Steve Johnson said in the Guardian that although digital technology was so pervasive in our lives we failed to realise that it could change behaviours more easily than decades of campaigns and legislation.

In hospitals, the inability to track and trace circulating medical consumables and assets results in a multi-million-dollar blind spot. This is a problem that can be solved using technology. In my book, ‘Hidden Hospital Hazards: Saving Lives and Improving Margins’, I write how this and other hidden hospital problems can be solved. Download a free copy here.

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Want to Reduce Harm, Save Lives & Improve Hospital Margins?

Subscribe now to discover how to simplify the tracking, tracing and recording of medical consumables and devices used, in real time. Get your free copy of our eBook: Hidden Hospital Hazards.