When Substitution Becomes Strategy

In the past few years, a handful of high-profile backorders of critical items in the healthcare supply chain have garnered headlines. But every materials or inventory manager working in the trenches knows that backorders are a fact of life. Whether they make news or not, shortages are something supply chain professionals have to plan for and pivot around every day.

But even “small” disruptions can cause big problems if a clinician is expecting a product to help treat a patient.  What varies widely from one health system to the next is how disruptive those backorders become.

The challenge isn’t simply that a product goes unavailable. It’s the cascade of work that follows: teams scramble to identify acceptable substitutes, clinically validate them, cancel and reissue purchase orders, update item masters, relabel shelves, and reconcile receiving and invoicing. Each disruption pulls staff into reactive mode, consuming time and attention in an already resource‑constrained environment.

Medline’s Pre-Approved AutoSub offering was designed to address that reality.

The hidden cost of manual substitution

When a critical SKU goes on backorder, many health systems rely on manual substitution processes. Even when alternatives exist, the work required to process those substitutions can slow fulfillment and introduce risk. Supply chain teams must ensure clinical acceptability, align ERP systems, and manage downstream impacts to receiving, accounts payable and inventory accuracy.

That can put a strain on the supply chain team, fragment workflows, and add administrative burden associated with repeated, manual substitution management. During one customer visit last year, Medline heard from an inventory manager at a large Midwestern health system that she had created her own form to manage backorders, and it would often take her days to work with clinicians, vendors and other stakeholders to line up an approved substitution and place the order.

“We surveyed customers, and we found that the average time to get approval for a substitution can be 5 to 7 days,” says Dave Kordik, Medline’s vice president of customer technology solutions. “That can have a huge impact on patient care.”

Over time, that burden compounds—diverting staff from strategic initiatives and making it harder to maintain consistent service levels during periods of supply disruption.

How Pre-Approved AutoSub can help

Pre-Approved AutoSub is an automated medical supply substitution solution that replaces backordered SKUs with clinically pre‑approved alternatives. Rather than requiring teams to intervene order by order, AutoSub enables health systems to define acceptable substitution pathways in advance—and then allows those substitutions to happen automatically when needed.

The ”Pre-Approved” in Pre-Approved AutoSub is critical: The software does not swap in unvetted products that have not been approved by a health system’s clinicians. Substitutes are identified, reviewed, and approved ahead of time by the provider, giving clinical and supply chain leaders confidence that continuity does not come at the expense of standardization or patient safety.

“At the end of the day, what is most important is getting more clinically approved product into the hands of clinicians, so they can treat patients without a disruption of care,” says Kordik. “That’s what Pre-Approved AutoSub is meant to do.”

The result is a touchless process that keeps inventory moving while preserving supply chain and clinical control.

How AutoSub works

1. Identify supply chain risk
   Medline and the supply chain team at the health system can analyze the system’s data, identifying where disruptions may happen.

2. Define pre‑approved substitutes
   Clinicians create and maintain a list of clinically approved substitute products for those SKUs.

3. Automate substitution at risk
   When Pre-Approved AutoSub recognizes that a SKU is at risk of backorder, it automatically replaces it with a pre‑approved substitute.

4. Maintain system alignment
   Through EDI, Pre-Approved AutoSub supports PO matching, MMIS updates, receiving and invoicing.

Built for resiliency without added complexity

Using EDI automation, Pre-Approved AutoSub supports purchase order matching and proper alignment of receiving and invoicing, helping prevent downstream reconciliation issues that often arise with manual substitutions.

Because substitutions are mapped in advance, Pre-Approved AutoSub eliminates the need for relabeling shelves or managing barcode inconsistencies when substitute products arrive.

“Backorders happen all the time, and the reasons behind the backorders are complicated,” says Kordik. “Being able to automatically substitute a product means there’s less chance of a disruption. And we’ve seen customers build deep sub lists to ensure they have backups for their backups.”

Customers using Pre‑approved AutoSub have documented improvements in unadjusted fill rates—on average up to 2.5 percent—by reducing order interruptions tied to backorders and substitutions.

Customer spotlight on UCHealth

UCHealth has used AutoSub to support uninterrupted care through supply disruptions. The sheer size of UCHealth’s system means they order roughly 190,000 product lines a month. At the time we wrote about UCHealth’s success in 2025, AutoSub had automatically filled more than 9,000 order lines year-to-date, preventing more than 1,200 lines per month from being backordered. That helped timely delivery of clinically approved substitute products, quietly maintaining service continuity for over 230 critical SKUs that would have otherwise caused disruption in patient care.

The experience of UCHealth illustrates how automated substitution can support broader resilience efforts, delivering measurable fill‑rate improvements through proactive planning and collaboration.

A strategic reframe of substitution

By defining substitution pathways in advance, health systems gain greater control over how backorders are handled, which products enter their facilities, and how much effort is required to keep inventory moving.

As healthcare supply chains continue to face volatility, AutoSub offers a way to maintain momentum without adding complexity—designing substitution into the system from the start.