Let’s Get Standardized! How Standardization Will Aid Government Health Supply Chain Resiliency

Discover how data and role standardization cannot be ignored to maintain supply chain resiliency during major supply disruptions.

The COVID-19 pandemic has illuminated the vulnerabilities of the interconnected global supply chain across all industries, particularly in the public and private health sectors. For instance, processes and procedures either did not exist or lacked clarity among different government and non-governmental entities on how to handle a major supply chain disruption at the scale of a global pandemic. In this article, Deloitte will explore how a lack of data and role standardization are crippling supply chain resiliency and what government health agencies should be doing now to address these gaps to build a resilient ecosystem to serve their customers in need of medical care.

Deloitte conducted interviews with over 50 supply chain leaders in both private and public sectors from various industries including life sciences, government, health care providers, academic institutions humanitarian nonprofit organizations, retailers, and technology companies to better understand how organizations are building resilient supply chains.

Today, it is commonly seen that government and commercial healthcare entities are looking to advanced technologies to increase supply chain resiliency and avoid potential disruptions. However, technology proves far less effective in a crisis when the members in the same supply chain ecosystem do not have standardized definitions, communication methods, and roles, with the lack of clarity slowing response and hindering operations. Standardizing the basics, like data sharing, authorities, and role of the entities involved, is important to maintain a healthy supply chain ecosystem.

Why is Standardized Data Effective?

In our research, Deloitte found that 67% of interviewees cited data issues as a prevalent vulnerability within their organizations, which was the most often cited issue in interviews. Among the various kinds of data issues, data standardization - the process of developing and implementing rules for how data are described and recorded – was most cited as what was lacking. Standardizing data enables the government and commercial healthcare entities to collaborate much more effectively as speaking the same language will aid in making more informed decisions, readily understand where risks lie, and identify trends in a timely manner. In the context of the health care supply chain, the Council of Supply Chain Management Professionals’ (CSCMP) Supply Chain Quarterly mentions, “Health care systems and manufacturers should also ‘open their books’ and make their inventory lists available to one another so that backorders are prevented, and contingency plans are employed. The result has been poor alignment of incentives between private and public sectors, fierce competition among states for scarce supplies, and a wide variation and volatility in regulation across state lines.” ?A few of the reasons cited for why data was not standardized already are:

• Risk of losing a competitive advantage
• Amount of effort and funding needed to migrate existing data
• Time needed to re-train teams to the new processes

However, as seen from the pandemic, information gaps that arise in the absence of standards can exacerbate a disruption and take longer to rectify the situation. Deloitte recommends implementing data standardization processes through which the government can: 1) enhance the efficiency of collaboration with private entities and 2) obtain the high-quality information necessary to make informed decisions for public health.

While advocating for standardization, Deloitte also recommends that data privacy is upheld to ensure private entities competitive advantage is not at risk. Data transparency, with appropriate measures to protect truly sensitive data, should be seen as an investment by members of the ecosystem to benefit all members through reduced risk. If all participants are monitoring the supply chain and extracting data with the same understanding, it lessens the chances of a massive disruption being more damaging for everyone at large. One interviewee cited how they received unprecedented levels of proprietary data from commercial partners in support of COVID which greatly helped their pandemic response, but they are uncertain about this continued willingness to share data as it sometimes contains sensitive information. Data standardization on its own will not be the answer to ending supply chain disruptions. Rather, it is an essential tool to maintain and continue to build a resilient supply chain by improving data visibility among different players while maintaining privacy and protection of sensitive information.

How Can We Work Together?

Standardizing data is one of the first steps that should be taken as it allows for the supply chain members to speak the same language and provides an open line of communication. Deloitte also recommends that standardized roles be created and understood between the supply chain members, both public and private sector. This is key to understanding who does what during a time of crisis as it will help determine which member is best equipped to tackle a type of potential disruption the best in the least amount of time and assign roles accordingly. During the pandemic, the entire world saw shortages resulting from poor communication and entities stepping on each other’s toes, such as how some government agencies had overlapping responsibilities but no action plan to split those responsibilities in an effective way. There was also the issue of certain entities hoarding essential items and taking the “every person for themselves approach”. With roles defined among the different entities on how to respond to crises, there would be clearer paths towards solutions which would aid in preventing the urge to take this hoarding approach.

Just like the benefits of standardized data, this new change in standardized roles will foster many benefits that continue to build the supply chain. Role standardization promotes quality of work, boosts productivity, and will ultimately decrease ambiguity of responsibilities. We often see cases of the bystander effect within supply chains where entities do not respond as they expect others to handle the issue, but if they do respond, they are trying to put out the same fire amid others which may cause more harm than good. Instead, standardizing roles and communicating the expectation of each member will mitigate both the redundancy in supply chain response operations and the effects of a disruption.

Data and role standardization were not major topics of discussion in the past. However, the pandemic has shown us that one of the major gaps in the supply chain was understanding which roles needed to be filled and who would fill them, and data standardization provides an environment where different players already speak the same language which will improve the communication between entities and clarify what is expected of them. Understanding that disruptions are inevitable and may occur at any given time, strides in standardization can be taken to avoid further exacerbation of disruptions by inadequate communication or lack of understanding between the members of the supply chain.