Working Together: Collaboration and Replenishment Strategies

By Josh Wolfe, Senior Vice President, Inventory Management

It’s a bit of a corporate cliché to say “this meeting could have been an email.” But the point is taken: Efficient communication makes everything run a little smoother.

But what about when email — once seen as the quickest and most convenient method of communication — could actually introduce inefficiencies? When a system like the healthcare supply chain is facing more disruptions than ever with more shortages to address and more surface area to cover, efficient communication is vital. The old ways of managing supply disruptions — emailing spreadsheets back and forth — just don’t work anymore.

Unfortunately, many healthcare supply chains continue to operate with limited visibility, fragmented communication and reactive processes. In fact, a 2023 GHX survey found that 86% of healthcare supply chain leaders cited operational inefficiencies tied to poor data visibility.¹ These inefficiencies often stem from disconnected forecasting, inconsistent communication and outdated inventory systems.

But a growing number of supply chain leaders are turning to collaborative planning and replenishment strategies to build more agile and resilient systems, and to build trust between providers and suppliers.

Fragmentation and lagging visibility add to challenges

Healthcare supply chains have long grappled with reactive ordering, communication delays, and fragmented data. But in recent years those issues have become harder to ignore. Timeliness and accuracy of data is a growing challenge. Historically, most suppliers and providers would rely on email and spreadsheets to communicate, but those were just snapshots of data that quickly became outdated. By the time a provider was working off that data, it could already be stale.

Data variability from third parties just adds to the complexity. Manufacturers may update delivery estimates daily, which can turn into last-minute shortage notifications that catch providers off guard. One day an order is on schedule and the next it’s delayed, resulting in a shortage that wasn’t on the radar just 24 hours ago.

And not all health systems are equipped with the infrastructure or bandwidth to quickly identify alternative products. Some health systems have critical item lists, pre-approved substitutions, or 3PL stockpiles ready to go. Others don’t—and when a shortage hits, it’s a scramble.

The solution: supplier and provider collaboration

Collaborative planning reframes the dynamic between supplier and provider. Rather than operate in silos, both parties align around shared goals, real-time communication, and joint decision-making based on current data.

At its core, collaborative planning means integrating inventory data, sharing demand forecasts, and optimizing replenishment. Some providers can now share inventory data that gives suppliers earlier insights into demand changes. Seeing a change in the rate that a product is being consumed allows a supplier to ask why it’s happening, and whether it’s a one time event or indicative of a new trend going forward.

Without that information, a supplier may not see the change in demand until the provider orders actually start increasing or decreasing. Recognizing it several weeks earlier, as it’s happening in real time, allows both parties to work a lot more proactively to address the change.

All of that means a supplier could prevent a backorder, or minimize the duration of a backorder, because that collaboration sparked a signal further in advance.

Data-driven inventory management

It’s not unusual for a product to run low, but not all products are created equal. Identifying and sharing data around top-priority SKUs can enable more prioritized shortage reporting and allow both parties to work proactively to avoid a stockout of a critical item.

That type of collaboration can take many forms, from simply communicating more frequently, to new technology solutions. Supply chain integration platforms like Medline’s collaboration with Microsoft, Mpower™ Foundations, can help increase visibility for health systems, and allow them to work proactively to identify potential backorders and improve fill rates.

The rise of predictive analytics, real-time visibility, and machine learning has changed the game for inventory management. Tools like Mpower™ allow providers and suppliers to centralize backorder mitigation, substitution management, and inventory visibility.

Best practices that drive supply chain resilience

• Define critical item lists: Proactive backorder reports might contain hundreds of SKUs. If providers have already identified which of those are mission-critical, they can work with their supplier to focus on what matters most.
• Pre-approve substitutes: Health systems that go through the clinical approval process in advance can switch to substitute items without delay, also ensuring inventory availability on the substitute to prevent any impact to patient care.
• Leverage auto-substitution: Research shows that auto-substitution can significantly improve order fill rates and reduce operational expense.²
• Pilot small-scale integrations: Start small. Full integration doesn’t have to happen all at once. Pick one data set — like critical item lists or on-hand inventory — and build from there.

Key takeaways

Even with robust tools and technology, collaboration and transparency are built on proactive communication. That mindset shift — from control to collaboration — is perhaps the most important step toward supply chain resilience.

Healthcare supply chains today must do more than just move product. They have to anticipate disruptions, adapt in real time, and work hand-in-hand with partners to protect patient care.

There’s always going to be risk. But with the right collaboration providers and suppliers can manage that risk smarter, faster, and more confidently than ever before.