The biggest untapped resource at your hospital? Your supply chain.


Shaden Marzouk, MD MBA

Chief Medical Officer, Cardinal Health

Scott Nelson

Senior Vice President, Supply Chain, Cardinal Health

Five important findings from our in-depth survey.

We know the supply chain plays a critical role in hospital operations. But we wanted to know: how do hospital stakeholders gauge its importance, and how does it affect them day to day? How does it impact patients? What supply chain capabilities are most important, what challenges are employees facing, and what changes would they like to see?

While supply chain leaders strive to understand these different perspectives in order to ensure the supply chain is meeting needs and expectations, it can be difficult to form a clear picture.

We investigated, engaging with SERMO to conduct an in-depth survey to help fill in the pieces. More than 400 hospital stakeholders — nurses, physicians, service line leaders, and supply chain administrators — shared their first-hand supply chain experiences. The results — both the points of agreement and the areas where stakeholders diverge — were certainly illuminating. Here are five important findings.

1Better supply chain management supports patient safety.

Respondents saw the supply chain management as not only a key business tool, but an essential element in ensuring patient care as well: 58 percent of frontline caregivers recognized supporting patient safety (expirations and recall alerts) as a key benefit of inventory management.

Responses underscored the risks of inventory problems — nearly one in four (24 percent) hospital staff have seen or heard about expired or recalled equipment used on a patient. More than half (57 percent) of all those surveyed recalled a time when a physician did not have a product that was needed for a patient during a procedure. Most concerning, 18 percent are aware of a patient harmed for not having the right supplies at the right time.

2Supply chain tasks take away from time with patients.

2 hours

The amount of time a typical clinician spends each shift on supply and inventory related tasks, taking valuable time away from patient care.

We asked clinicians and administrators to name the number one thing they wish they didn’t have to do in their jobs. Across all stakeholder groups, the top answer was supply and inventory tasks.

Frontline clinicians say that they spend, on average, 17 percent of their workweek dealing with inventory issues. For a clinician who works four-12 hour shifts, that’s over 2 hours a shift spent on supply and inventory related tasks.

Approximately two-thirds (65 percent) of front-line providers say that they’d trade this time to be with their patients. One in three service line leaders (32 percent) say that the main task that they wish they didn’t have to do is supervise the supply chain.

Surprisingly administrators are frustrated, too - 59 percent ranked supply and inventory tasks as the part of their job they wish they didn’t have to do. Their roles are expanding. Finding automated solutions that save time and money adds value to understanding the enterprise.

3Financial challenges are the top priority.

As in last year’s survey, respondents highlighted financial needs as a key focus. The majority of respondents (64 percent), on an unaided basis, identified financial demands as the single greatest challenge facing their organization, and 54 percent of administrators ranked managing costs as the number one element to the organization’s success. Finances were top of mind for many clinicians as well — 45 percent of service line leaders and 39 percent of frontline clinicians ranked managing costs as the number one element for their organization’s success.

Respondents drew a strong connection between these challenges and the supply chain. In fact, respondents estimated that their organizations could save more than $500,000 using new, automated, data-driven supply chain technology, rather than the current manual solution. For those that are in larger organizations, that number could be more than double.

4Improvements are long overdue.

Responses showed that current inventory management processes fulfill basic needs, but leave a lot of room for growth and improvement, especially regarding cost and enterprise management.

Overall, respondents identified a lack of urgency around updating the supply chain and introducing solutions that would address manual inventory management challenges. Nearly one third of respondents believed their facility had not introduced a new inventory management system in six or more years. Another 25 percent reported not knowing if a new system had ever been implemented. In general, respondents gave their existing system low scores on ability to benchmark as well as visibility into the state of inventory.

5Competing priorities and limited information hold back progress.

Survey respondents drew a clear connection between the supply chain and core hospital objectives. Most respondents (76 percent) said the supply chain was critically important to addressing the key challenges they see in their organization.

So why are so many hospitals slow to adopt automated systems given the importance of effective supply chain solutions to supporting patient care and managing costs? Respondents noted other priorities, perception of high costs, and getting buy-in as the top three barriers.

The responses also suggested many stakeholders aren’t familiar with all supply chain and inventory technology options. Overall, 34 percent of respondents were not familiar with RFID technology, and only 10 percent said they were very familiar with it. However, the half that has heard of RFID technology recalled mainly positive ideas associated with the technology, while only 9 percent have negative associations.

The path forward

Frontline clinicians, service line leaders, and administrators weigh the importance of the supply chain differently, and they face a different set of challenges. But they agree that the supply chain has a major impact on their hospitals top priorities: managing costs and quality of care.

It’s essential to bring stakeholders together to understand options for improving supply chain processes and to quantify the benefits of these improvements, not only for the bottom line, but for patients and employees as well.

About the Cardinal Health Supply Chain Survey

This study was fielded Oct. 19 - Nov. 4, 2016, using an online survey methodology. The samples were drawn from SERMO’s Online Respondent Panel of Health Care Providers, which includes over 600,000 medical professionals in the United States. The study included 403 respondents total, including frontline HCPs in hospitals (n=201), service line leaders in hospitals (n=100), and hospital/supply chain administrators (n=102). All survey data on file at Cardinal Health.