GRA has been working closely with the primary care and hospital networks as well as in-home services and aged care sectors during the COVID-19 crisis.
In this video Carter McNabb, James Allt-Graham and Shanaka Jayasinghe discuss what we are seeing within these organisations from a supply chain perspective.
We also explore what these organisations need to do moving forward to strengthen their supply chain and service chain functions.
- The industry is set up for ‘business as usual’. These times are anything but ‘business as usual’
- Processes are inconsistent across hospital networks, so it is difficult to scale in a significant way to support core operations
- Technology in most cases is not supplying end-to-end visibility
- A significant challenge is building efficient AND resilient supply chains
- The sector is finding creative solutions to overcome constraints like scarcity of supply such as with PPE Moving forward Australia’s healthcare sector need to focus on:
- Standardising supply chain processes and procedures
- Diversify and mitigate risk moving forward
In-home Services and Aged Care
Before COVID-19 Australia’s Aged Care sector was going through a step-change following a Royal Commission that was critical of the sector. The Government has since been pushing for in-home care over facility care. The sector has since had the added pressure the comes with COVID-19 such as balancing visitations, managing demand for PPE and the need for transparency.
The supply chain in the Aged Care sector is a service chain involving the distribution of people – ie getting the right people in the right place at the right time.
The greatest logistical challenges facing the sector is around operating processes involving people and technology. Policies such as the customer value proposition and the employee value proposition must be well understood before embarking on a technological transformation.
Carter McNabb - Hello and welcome everyone. I'm Carter McNabb. I'm a partner with GRA Supply Chain, and today is the next instalment in our COVID Supply Chain Navigation Series, where we explore the implications of COVID on supply chains, what it meant, how our supply chains are impacted and more importantly now, what does it mean moving forward, and we've got a couple of videos already up on YouTube on our channel. First was a broader webinar on the overall implications of COVID. There was also a webinar summary that's available for those of you that want the CliffsNotes, and don't want to watch the whole webinar. And now we are really exploring implications for specific industries. How are specific industries impacted? What does it mean for those industries moving forward and today I am joined by James Allt-Graham, who is also a partner of GRA, and Shanaka Jayasinghe, who is a director at GRA to talk about health. So in terms of the health industry James, what did you see in terms of primary care at hospital networks?
James Allt-Graham - Yeah, thanks Carter. Yeah it's been fascinating the last eight weeks, working really closely with the hospital network in response to the COVID situation. There's a number of things that really stand out. The first is obviously that a lot of the networks have been designed for business as usual, and this is just not business as usual. And so when you look at things like the physical supply chain, even basics, you know like the amount of storage and secure storage that's available, the quantity of stock obviously needing to move, so all of the protective equipment is of a scale that's totally different to BAU. And so a lot of the challenge that we've been working through with those hospitals is how do we scale those supply chains, to be able to support you know the absolutely critical core operations? How do we do that in a way that enables visibility? So obviously understanding especially where we've got very scarce supplies of some materials, where they are and so they can be moved through that network has been a challenge, and then you know really focusing as well on the supply side in terms of you know being quite creative in terms of where we've got supply shortages, who else can create or manufacture some of those items for us. So it's been a really interesting and challenging situation as a supply chain professional, it's been incredible to be working with the doctors and the nurses on the front line to help them achieve what they need to. I think there's a whole range of sort of learnings that have come out of this, and I think you know they'll be obviously detailed reviews at the end of it in terms of of the way that the supply chain needs to be considered going forward. But a couple of things really stood out. I mean the first is that where you have processes that are inconsistent across networks is really hard to scale those in a consistent way. And so that's been one of the challenges across the different hospital networks. The technology that underpins a lot of the supply chains is great for BAU, but it doesn't provide that end-to-end visibility that we look for in a supply chain sense, and when we think about a supply chain control tower, being able to see what is where, that's crucial and some of those technologies aren't in place. And so really needing to achieve that's going to be important. And then I think that balance between efficient supply chain and a resilient supply chain given that these shocks may occur again in the future. Some real thinking about how those should be designed and what's the best way to do it, and as some people would be aware, we do a lot of work with defence. And so there's some different thinking in those models around what level of safety stock for example do you keep, where is it held in relation to the end consumer or the end user. So some of those concepts I think are going to be really interesting, but the great news is that through this there wasn't because of the PPE gear, any impact on the ability for the doctors and nurses to deliver their core services. So the supply chains did respond lots of a scramble, but at the end of the day with the flattening of the curve it's been a good result, but a great now opportunity to say okay well if this happened again and perhaps we weren't as fortunate what would we need to do differently and what can we learn from it.
Carter McNabb - Thanks James, great answer. So what I was hearing in that, correct me if I'm wrong is that to some extent there were almost kind of disparate micro supply chains that were in place, that were operating under a business-as-usual model and when there was a kind of a peak demand surge that hit and it needed to sort of allocate and manipulate resources across the supply chain network, need for greater visibility, some standard processes that were scalable and some technology to help us make some trade-off decisions from that kind of control tower perspective really important.
James Allt-Graham - Yeah that's exactly, that's exactly right Carter and coming out of an environment, where your hospitals run quite differently within the hospital, the wards all run quite differently, and yeah that's difficult to scale in this sort of an environment, so yeah definitely some learnings in there.
Carter McNabb - Thanks James. I'm sensing Shanaka's got something to contribute. So Shanaka, in-home services and aged care, what was the landscape sort of pre COVID and what have you seen since?
Shanaka Jayasinghe - Yeah thanks Carter. It's really interesting particularly the backdrop pre COVID. Aged care was going through a significant step change and there was a few triggers to that. So there was a Four Corners report, which was quite damning of the aged care sector, and that sparked a lot of rallying around change in the sector. There was also a Royal Commission that's come out with an interim report, and that was quite scathing of some of the management in the space and again rallied around a change, and then I guess before all of this, there was significant growth and there still is significant growth in the aged care space. So if we couple that growth with a government push towards in-home services care rather than facilities care, this was the setting pre COVID. So you can imagine post COVID, they're adding more challenges into that equation. So I guess with the COVID situation now, there's obviously questions around balancing visitations and making sure that we don't trigger a health crisis or continue to accelerate a health crisis in any of their aged care facilities, but there's also an increase, as James mentioned, demands for PPE making sure the workforce are looked after properly safe and secure, so that's part of it. The other part with aged care in particular is this need for transparency and visibility in the supply chain with the workforce. So it's a bit different to--
Carter McNabb - Can I just jump in? Just for those watching that might not have as clear picture on this is what does that, what is the supply chain in aged care services? What are the demands in supplies we're trying to manage?
Shanaka Jayasinghe - Yeah it's a great question Carter. So we look at the supply chain in aged care as a service chain. So if you can imagine a traditional supply chain would be the distribution and flow of goods across the network. With the aged care space, it's really around the people. So there's obviously different services that are required whether that be domestic assistance, personal care, allied health and nursing et cetera. It's all about making sure that we get the right people in the right place at the right time and you can imagine with the push towards in-home care, there is an increased logistical challenge with that. So the supply chain requirement becomes greater when you start to look at different geographies, a workforce pool that might be available in one, but may not necessarily be available in another. How do you look to balance that and it really takes into account all of the principles from sectors, such as aviation, which rely heavily on making sure a tech crew, a flight crew, and a cabin crew sort of come together in the one space at the one time and making sure that system hums. It's very similar to that space.
Carter McNabb - Okay, fantastic. Thanks for that. What do you see moving forward for like a services supply chains kind of post COVID? Do you have like kind of the top three, two or three key lessons?
Shanaka Jayasinghe - Yeah I think it takes us back to where we were pre COVID. So there's obviously significant growth in the space and in addition to that a move towards in-home care with that comes a greater logistical challenge. So the ability to forecast your workforce requirements across the services that you're offering is going to be critical. And then how do you schedule that in an optimal way to reduce things like kilometres, overtime et cetera. So I think that's going to be the key focus. Where we've seen the challenges to date over the last I'd say three to five years has been providers going after technology solutions, with that the appropriate level of maturity in the organisation itself. So I think the real opportunity here is about capability within the provider space. So like we've seen with FMCG and how the maturity of the workforce has evolved from a supply chain perspective over the last 10 20 years. We'd see that as a real enabler to some of those technology solutions going forward to support forecasting fostering et cetera.
Carter McNabb - Fantastic, thanks so much Shanaka. I just quickly talk, so for those that are involved in say pharmaceuticals, just don't feel left out. I guess at some level the pharmaceutical supply chain probably looks a little bit more like a traditional commercial business supply chain in terms of business to work with. We've talked about hospital groups and services supply chains, but the pharmaceutical supply chain's again very much like a commercial supply chain. We're dealing with the flow of goods. I think probably one of the best analogies for what's required in that industry is really looking at what happened with Blackmore's and the pan pharmaceutical recall in 2003, and I guess the headline on that story was that a very strong, very well disciplined and structured sales and operations planning process. So that's for those that don't know what sales and operations planning is, it is a formalised structured process that helps make demand and supply trade-offs based on service and cost trade-offs and provides I guess enough clarity at an organisational level to understand who makes the decisions, what the decision points are and how information is shared across the supply chain. So in the pan pharmaceutical recall hit in 2003, they were able to move very quickly to both get touch with the market and the supply base and to start working through an allocation process, a fair share process, and just stay ahead of the curve in terms of the way the landscape was changing. They were able to kind of move more quickly than landscape itself and as such were able to turn that into an opportunity and the long and short of that is following the crisis, their market share increased 30% and was retained following the crisis. And we've seen some other research around that suggest that businesses that are more resilient post crisis, it's not a short-term blip but tend I guess change your standing in the market. So again this pace around the control tower, good scenario planning, good integrated bottom update and information and strong teams that have some good structure around that to make decisions and understand what the possibilities and options are and kind of navigate that will be the ones that succeed. So again scenario planning and resilience has been key things across all industries as we are seeing them. So I'm going to ask you guys again live television, what are your top two recommendations or kind of closing thoughts for the various industries you've been working in? So what are your top two or three James?
James Allt-Graham - I think there's a real decision point around the level of centralization that we look for for within our health network. And you know that makes a lot of sense, but there's going to need to be a lot of work then done on standardising the processes and procedures and putting in the technology. By way of example, I guess Carls and Molly's have gone down to store level planning with planograms and supplying against those individual store demands. That's been a journey that's taken quite a long time for them to achieve that. Health will need to potentially achieve that quite rapidly given the risk exposure. So that's going to be one I think real consideration. I think the other obvious one is supply. So you know Australia as the rest of the world, has been called with shortages. So how do we mitigate that risk going forward and it's not just about local manufacturing. It's also been the raw materials of course required for a lot of these products. So how do we diversify that risk exposure and mitigate it? That's going to add complexity and cost, and so that's going to be another sort of set of decisions that'll need to be made. So I think those are a couple of quite big issues that'll need to be addressed as we go forward.
Carter McNabb - Brilliant, thank you James. Shanaka what about you?
Shanaka Jayasinghe - I think the top tips in the aged care space and home services are around people in technology and I'll frame that up by saying making sure that before we go or embark on a technology transformation programme in the supply chain space, being sure that the policies the customer value proposition, the employee value proposition is well understood, and it's well understood also how that's operationalized and translated into a series of rules that then drives scheduling, rostering, forecasting et cetera. So I think working through the process and making sure that is a well-defined process that works for the organisation and integrates into the other operating processes in the organisation, and then from there taking that business requirement set to then go after the technology pathway, I think that's the key tip for this organisation learning from some lessons of the past.
Carter McNabb - Right, thanks so much my friend. So Shanaka and James, much appreciated. I know you're both very busy. So thanks for making the time today, and for those watching, thanks so much for your time and we hope you have enjoyed this spotlight on the health industry in terms of navigating COVID in supply chains, post and moving forward. So that's the GRA team signing off.
Shanaka Jayasinghe - Thanks Carter.
Read the our COVID-19 Whitepaper series
2. Watch the live recording of GRA's webinar on COVID-19 and the impact on Australian Supply Chains.
3. Watch a recap of the webinar by GRA's Carter McNabb and Shanaka Jayasinghe.
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