As one of the country's largest public hospitals, Parkland must make every dollar count, with a high percentage of uncompensated care and a large patient volume.
"Just-in-time works when just-in-time works, but it doesn't work a lot in the healthcare space," says Pamela Bryant, senior vice president and chief supply chain officer at Parkland Health. This was one of the lessons Bryant took from the COVID-19 pandemic, a disruption that permanently changed some of this public health system’s processes. While Parkland Hospital was established in 1894, its current facility is relatively new, built in 2015. It was designed with a just-in-time supply chain model, which was not working well even prior to the pandemic. "We had inventory everywhere, in different locations," she says.
The health crisis accelerated Bryant's plan to build a distribution center and consolidate the inventory. As one of the top 20 public hospitals in the country by size, Parkland Health in Dallas has close to 1,000 beds and 15 outpatient clinics. Bryant is responsible for all aspects of the Parkland supply chain, including procurement, strategic sourcing, logistics, distribution, vendor management, equipment and asset management, and informatics. She does so in a system that collected $2.8 billion in revenue last year but provided $1.2 billion in uncompensated care. Bryant shared four ways that she approaches the Parkland Health supply chain.
1. Creating new processes due to the pandemic
Bryant came to Parkland in 2018 with a vision to build a distribution center at some point. COVID expedited that process. "We needed somewhere to put the volume because we needed so much," she says. The distribution center is the main inventory hub for bulk supplies, where staff breaks them down into the lowest unit of measure (LUM). They have smaller supply rooms which Bryant calls "clean rooms" on each hospital floor or unit, like the emergency department (ED). She wanted a system that would streamline inventory and not duplicate it.
Staff requisitioning more specialty products no longer store those items separately. The global supply now manages it all. "People are more aware of supply chain because of the pandemic," she says, making it easier to get approval for initiatives like this.
Bryant is increasing the department's use of information technology, with analytics informing her staff of product utilization and to help understand if the periodic automated replenishment (PAR) levels are set correctly. They use analytics for hospital floor utilization to understand when to restock the clean rooms, and they also monitor stock levels with radiofrequency identification (RFID) technology. Parkland will also be adding a warehouse management system soon to better manage inventory levels at the distribution center.
The prime lesson Bryant learned from the pandemic was that relationships were important, and if you didn't have relationships, you would be left behind when you needed something. The department formed more local relationships with small business vendors that were able to pivot, be flexible and create new products for them. Parkland maintained those relationships, like with local vendors that began providing gowns during the health crisis. Relationships with staff are also important, ensuring they are fully engaged. She frequently shares with staff why their roles are important and how their actions fit into the bigger picture. The pandemic also made Bryant think more about not using sole source sourcing and the risks of procuring all products internationally.
2. Moving past COVID: Top priorities going into 2023
As the health system moves out of the pandemic phase, Bryant is looking for ways to gain efficiencies and see which processes from the pandemic are sustainable. During COVID, federal funding helped cushion them, but that funding ended. "The question now is how to drive savings again," she says, noting that savings is a small component of what the supply chain function brings to the table. "We bring an efficient supply chain that is well run and allows you to reduce costs by eliminating waste, and ensuring you have the right thing at the right time and the right price point." Her goal is to maintain efficiency gains and incorporate them by managing inventory, and finding cost savings opportunities in reasonable ways.
Most health systems have already captured the low hanging fruit in cost savings, she says, but she still sees opportunities to standardize and incorporate technology to improve the system. Most commodities like bandages are already standardized, but physicians are learning how to standardize through value analysis teams.
Bryant is also broadening her view in hiring, given the difficulty finding new staff members. "Now, you may have to look at different type of staff," she says, and that means looking outside of healthcare to other industries. "If you're working in logistics, if you're a leader at UPS or FedEx, that translates over. If you’re in a retail operation at CVS, it translates over into this space," she says. "Looking for different industries can be beneficial in the healthcare setting."
3. Managing patient volume spikes
Parkland Health sees a lot of patients. That includes almost 1.2 million outpatient visits in 2021, 205,548 ED patients and 32,239 adult in-patients (which excludes those observed but not admitted to the hospital). Bryant says that the hospital is often filled 99% to capacity. The facility treats large homeless and uninsured populations, and is a Level 1 trauma center, treating the most serious trauma injuries.
With a fluctuating volume, staff may have to open additional units or "pods" sometimes twice a month, servicing them with supplies. They may double the floor capacity to treat more patients, so the clean rooms must double their contents as well. "I have to logistically move my folks around to cover any space that's opening [to provide enough supplies for the clinicians]," she says. These volume spikes impact inventory management, procurement, logistics, and backfilling supplies.
Their enterprise resource planning (ERP) system has PARs built in to replenish stock levels and reorder. To manage the spikes, the department built templates to help staff quickly and accurately know what stock to deliver to the clean rooms.
In the warehouse space, Bryant's team is looking into adding robotics to work more efficiently and reduce labor costs. "Labor is hard to find and this will help us ease the worker shortage and make us more efficient."
4. Diversity, equity, and inclusion efforts
Bryant runs the supplier diversity efforts and has a supplier diversity team, to bring in small businesses and minority- and women-owned business enterprises (MWBE) into the procurement and bidding process. Vendor information is collected in the supplier portal detailing their capabilities, so when Parkland needs a request for proposal (RFP), they can send it out automatically to qualified vendors.
Even the non-minority businesses must set up parameters around MWBE, with a plan for how they incorporate MWBE into contracts. Most vendors subcontract parts of the work, and this requirement ensures vendors know that inclusion is expected. Parkland provides contractors with a list of MWBE subcontractors during pre-bid meetings. They also introduce MWBE subcontractors to suppliers for construction projects, allowing all parties to interact and understand the project. Her department works with Hispanic, Black, Asian and women's business councils, chambers of commerce and the national Minority Business Development Agency. Twice a year, Parkland trains small and MWBE companies how to do business at Parkland, detailing what to include in the supplier portal registration, sharing what they need to know about working with Parkland, and reviewing upcoming projects.
Bryant's supply chain team has a goal for the percentage of spend per project with MWBE suppliers, and they track each project. They also track group purchasing organization (GPO) spend in the MWBE area. Her director of supplier diversity sits on the GPO council for this. As a public institution, the state requires competitive bids. "We want to make sure small and minority-owned businesses are at the table," she says.
Deborah Abrams Kaplan is a contributing writer for HealthLeaders.
Consider hiring supply chain staff from outside the healthcare industry.
Hold training sessions for diverse vendors to help them understand how to work with your health system.
Create templates for what items belong in each setting so staff can quickly supply a new unit or increase capacity when patient volume spikes.