How to ensure robust supply chains for health services

  • Increasing challenges are putting pressure on health services
  • A major incident such as a fire or pandemic could test health service supply chains to their limit
  • Most supply chain disruptions come from those that service main suppliers

The healthcare industry faces a growing number of challenges, with decreased funding, organisational changes, reduced staff and ever-growing public demand. As a result of these challenges, many health service leaders believe that the sector is destined to face a major incident within the next three years.

For the health sector, a major incident is one that could have devastating national consequences for daily services, such as a major fire, a cyber security incident or flu pandemic. However, one risk that is rapidly growing is that of supply risk disruption.

For organisations working in any sector, BCM is critical. Not only does it allow businesses and organisations to engage in strong scenario planning, but it also helps them to understand the knock-on effects that an incident could have.

Worst-case scenario

Many health professionals believe that they could cope with any major incident that might occur. However, it is not just a single incident that can cripple a hospital – it is when several occur at the same time.

Organisations within the NHS feel budget cuts, an increase in outsourcing, and changes implemented by the Health and Social Care Bill Act 2012, have resulted in an already complex model of service becoming even more confusing.

“It is important to be clear on what services are being delivered by whom – and how the commissioning organisations can keep control,” says Phil Coley, Team Leader, Strategic Risk Practice, at Zurich Municipal.

“When it comes to social care, it is critical for commissioning organisations to understand their partners’ continuity plans, and what they are doing up front to make themselves as resilient as possible. This includes carrying out regular fire risk assessments – as well as potential areas for joined-up response and recovery planning.

“If their partners have a significant fire, how do they plan to protect people in their care and return to normal operations as quickly as possible? How do they plan to ensure the consistency of data protection controls and processes when outsourcing to third parties?”

Strong links throughout

It is important to be clear on what services are being delivered by whom – and how the commissioning organisations can keep control

Phil Coley, Strategic Risk Practice, Zurich Municipal

Health services, like many industries, often use the same manufacturer for many of their products. If a primary manufacturer suffered a major loss, such as a factory being destroyed in a fire, then it could have devastating knock-on effects.

However, while most businesses worry about their direct suppliers, 42% of supply-chain incidents actually come from tier two or tier three suppliers – essentially the suppliers that provide your suppliers’ goods.

Health service leaders need to be able to step back and assess the resilience of their organisation and, if possible, compare it to their peers. This includes looking at the resilience of their partners, suppliers and anyone they may have to rely on in the event of a major incident.

Protecting a supply chain is not just about being able to respond when a major incident happens, but how the company performs in the aftermath. A good business continuity plan (BCP) should also take into account recovery plans that are flexible enough to deal with any and all contingencies.