Demand Sensing in the Healthcare Supply Chain: Improving Accuracy, Agility & Action
By Barry Holleman
Given the challenges Covid has brought to hospitals everywhere, it is unfortunate but not surprising that 99% of health systems surveyed by Kaufman Hall said they’ve “experienced challenges in supply procurement, including of key items and significant price increases” this year. Those same survey findings also revealed the pandemic has had more widespread impact on their supply chains than even their revenue cycles.
Current supply chain challenges speak to the immediate need for more sophisticated demand forecasting. The right tools and technologies are now here to offer better, more effective ways of ensuring access to medications and supplies under any circumstance – whether changes in demand are expected (e.g., acquisitions, service line growth, new drug/device launches, etc.) or unexpected (e.g., contagious outbreaks, natural disasters, new competitors, sudden protocol changes, etc.).
At MUUTAA, we agree with the Strategic Marketplace Initiative (SMI) in calling the ability to understand inventory and consumption in real time a “fundamental” stage in the journey to optimal demand forecasting. That real-time element brings me to the topic of demand sensing, a next-generation demand forecasting method that uses artificial intelligence, machine learning, algorithmic computation and real-time consumption data to factor in real-world events.
By having the right data and computational capabilities in play, demand sensing will transform medical supply chain operations from being reactionary – caused by taking “best guesses” based on historical trends – to a proactive state that brings current realities into the planning process. Demand sensing improves three very important A’s: Accuracy, Agility and Action. It helps overcome the delay between events that impact supply/demand and your ability to see those events coming and modify sourcing, ordering and inventory decisions and processes accordingly. Only when your supply chain is equipped to master those three A’s can you meaningfully optimize inventory management, reduce costs, and provide greater service and satisfaction to both clinicians and patients.
I emphasized “having the right data and computational capabilities” above because demand sensing is good for all supply chains, but the healthcare supply chain is unique. It requires solutions built specifically for healthcare supply chains – and it must be patient-driven with clinical data and billing data as essential pieces of the equation. Simply put, the way forward lies in clinically integrating the supply chain.
We love to simplify the complex here at MUUTAA, which brings to mind an analogy my colleague Amar Ramudhin, an esteemed industry expert and strategic advisor for MUUTAA, used recently when asked why it’s important to clinically integrate the healthcare supply chain. To paraphrase:
It’s all about getting closer to the demand. Think about retail – the supermarket is face to face with the consumer at the point of sale, so they see micro-level ups and downs in consumption. But for the store’s cereal supplier, inventory movement is more aggregated and delayed, so demand planning becomes based on something less frequent, like weekly orders. For the cereal manufacturer, things only get more consolidated – they must forecast demand in much bigger and smaller waves based on historical patterns, making it very difficult to adjust based on sudden changes in the here and now.
In healthcare, this often leads to the bullwhip effect. You source and order medications and medical supplies based on historical demand, but history doesn’t account for everything that’s true today and will be true tomorrow. That’s why integration between the supply chain and clinical operations is essential. If you’re plugged in to the clinical need, then you know the minute things change and can make better, more effective decisions.
DemandAMP+ answers that call. We are proud to be the first and only AI solution for healthcare supply chains that focuses on patient-driven demand. Through cloud-based artificial intelligence, machine learning, clinical and billing integration, and more, DemandAMP+ delivers self-learning cognitive assistance and smart, user-led “what-if” scenarios. The result: amplified human intelligence through customized demand sensing capabilities.
Contact us to learn more – we’ll show how this user-friendly AI-as-a-Service solution works across many use cases, including new facility and/or service line planning, surge management, surgical procedure requirements, and catching up with treatment backlogs.
About the author
Barry Holleman is the Chief Operating Officer and Cofounder of MUUTAA, a healthcare AI company focused on patient-driven demand for clinically integrated supply chains. With more than two decades of global healthcare technology experience, Barry specializes in healthcare supply chains, healthcare logistics and automation, health IT, and pharmacy logistics. A results-oriented leader, he has helped spearhead market adoption of innovative technologies in healthcare across the European Union and North America. To contact Barry, email firstname.lastname@example.org.