How Can Clinical Labs Overcome Supply Chain Disruptions?

Globalization and a diverse global supply chain can promote business success by minimizing costs, increasing the volume of goods in the chain, and improving efficiency. However, globalization does not come without risks. If your clinical lab depends on a global network of suppliers, your supply chain is always vulnerable to disruption by causes outside your control. This includes natural disasters, traffic jams, shortages, or geopolitical conflicts.

When laboratory directors and supply chain leaders respond swiftly and effectively to such disruptions, human resources are protected and labs are more likely to continue operating during unexpected supply contingencies.

Here are three practices that can help clinical labs mitigate and overcome supply chain disruptions:

1. Develop different levels of contingencies

A crisis management team with in-house resources or outsourced experts can organize, draft, and implement action plans to deal with the most likely crisis scenarios.

Although predicting global and local supply chain vulnerabilities can be challenging, a strong contingency plan will ensure your lab is prepared to overcome any unforeseen obstacles resulting from supply chain disruptions.

You may need to plan different levels of contingency that can be gradually activated depending on the nature of the threat. For instance, if a manufacture of lab consumables in one location is compromised, a level one contingency may involve ordering the same product—like a specific plastic tube—from a different location. If the situation escalates and multiple manufacturing locations are unavailable, you may not have access to the exact same product, so a level two contingency may involve getting a similar product from another location.

"Test your contingency plan in the real world once or twice a year."

If you rely on a single supplier, this may be the moment to start forging relationships in multiple regions of your country or of the world. When preparing for contingencies, remember that having a prequalified backup supplier in place can help your lab get products on time and with minimal disruptions, even if the cost is higher.

And remember: no matter how detailed a contingency plan is, it is worthless unless it is practiced. Test your contingency plan in the real world once or twice a year. For instance, asking your secondary suppliers to produce and send your lab a limited quantity of a specific product will ensure they can meet quality expectations and fulfill the other requirements of your organization.

Each practice, every vulnerability, or potential challenge you detect will help you refine your contingency plan, which will only become more and more robust.

2. Enhance information sharing and improve visibility

Collaboration among stakeholders provides a powerful approach to responding to complex problems. Establishing alliances and improving levels of cooperation help make supply chains more resilient, which translates into enhanced efficiency, effectiveness, and market position.

Easy sharing of information and data is at the heart of this collaboration. Tools like Slack, Microsoft Teams, WeChat, and WhatsApp can keep your team and suppliers connected across countries and continents, increasing your ability to make decisions, whether or not you are facing a crisis.

"Many groundbreaking strategies can be used to maintain responsiveness during supply chain disruptions."

Other technologies such as e-procurement software allow your procurement staff to map your lab’s procure-to-pay processes, giving your organization real-time visibility of procurement procedures and vendor performance. Good supplier data makes it easier for an organization to assess suppliers' performance and make improvements throughout the value chain.

You can also use supply chain management software to execute supply chain transactions, manage supplier relationships, and control associated business processes.

With improved visibility and transparency within the supply chain, laboratory leadership can identify trends, recognize potential challenges beforehand, strengthen vulnerable areas, and make more informed decisions about how to respond when disruptions occur.

3. Embrace innovation

Many groundbreaking strategies can be used to maintain responsiveness during supply chain disruptions.

For instance, 3D printing can allow laboratories to create specific devices or products in house. The increasing availability of 3D printers and open-source sharing sites enable teams to develop innovative designs for lab equipment or modify existing designs to serve a different function. Using this technology to replace broken instrument parts or build custom sample holders, for example, means labs can sometimes be more independent of traditional supply chains and manufacturing industries. This streamlined approach also reduces inventory buildup and costs.

Drones are also finding their place in the supply chain sector. When conditions allow them to fly, drones can shorten the delivery times of sensitive clinical lab specimens and supplies. For instance, Spright (the drone division of Air Methods) partnered with Oregon-based Interpath Laboratory and launched a drone delivery network to transfer lab specimens. According to Joe Resnik, president of Spright, medical drone delivery  can improve lab operations and patient satisfaction. In addition, research by Chiang et al. found that optimally routing and delivering with drones is cost effective and can save energy and reduce carbon emissions. As drone technology improves, hospital administrators and clinical lab executives may want to monitor the expansion of such services into their regions. 

"Faced with ongoing disruptions and continued uncertainty, clinical lab managers and supply chain leaders need to update their processes and prepare labs for the future."

Although still hard to implement, according to Maher at al., blockchain is another technology that holds promise in supply chain management. Blockchain is a database through which supply chain partners can create, verify, validate, and permanently store records in an immutable format. Such records include product information, certificates, localization data, as well as data acquired from sensors and other connected devices. 

A public blockchain is a fully open and distributed network that allows all the participants to access, maintain, and validate transactions, whereas in a private blockchain, only a set of authorized participant nodes can acces and validate the transactions. As some enterprises need privacy, private blockchain can be a perfect fit for industrial applications. Besides providing traceability and visibility into the whole product history, blockchain promises to improve supply chain coordination and process efficiency over all.

Be proactive

Supply disruptions continue to grow more complex. New quarantines, disruptions in maritime shipping and air freight services, extreme weather, and geopolitical tensions drive shortages of products and make it more expensive for companies to ship lab supplies and equipment where they are needed.

Faced with ongoing disruptions and continued uncertainty, clinical lab managers and supply chain leaders need to update their processes and prepare labs for the future.

Learning from past experiences, developing and addressing the adequacy of contingency plans, and embracing technology are a few dimensions that can contribute to improved responses to ongoing and future supply chain disruptions. While it is difficult to anticipate all the risks that businesses might face in the future, these measures can help clinical laboratories mitigate the scope of any resulting damage.