The Best Form of Resilience is Product that’s Already There

When people in healthcare talk about supply chain resilience, the conversation usually goes to one of two places: multi-sourcing and technology. And both matter. If you’re a manufacturer, resilience means having multiple sources of raw materials and multiple production facilities, so that if something goes wrong in one place, you can pivot without bringing everything to a halt. From a technology standpoint, it means investing in better forecasting tools, faster demand signals, clearer visibility into what’s moving upstream and downstream. We think about all of that and, at Medline, we invest in all of that.

But I want to make the case for something that doesn’t get talked about nearly enough: finished goods, forward-deployed, close to the customer. In my view, it’s one of the most underrated forms of resilience in the entire supply chain—and it’s the one that matters most at the moment a facility actually needs help.

Disruption is the new normal

For the last several years, the healthcare supply chain has lurched from one disruption to the next. COVID-19 exposed just how fragile the system was—and rather than returning to stability afterward, new threats filled the void. Port congestion. Geopolitical tensions driving up raw material costs and reshaping sourcing economics. Extreme weather events knocking out manufacturing capacity. Cyber events that disrupt manufacturers’ ability to manufacture and ship products. The list keeps growing.

The data reflects what supply chain leaders are already experiencing firsthand. According to a survey of nearly 100 healthcare supply chain professionals last year, supply chain disruptions is their number one challenge.¹ More than half of suppliers experienced operational impacts from geopolitical issues or severe weather that same year.²

The pattern across all of these disruptions is consistent: when something fails upstream—a plant, a shipping lane, a key supplier—the organizations with inventory already positioned nearby buy themselves time. The ones who don’t often face a crisis.

Time is what customers actually need

Here is what I hear from customers more than anything else when a supply disruption hits: “Please tell us what you know and how it will impact us,” What they are really asking for though is time. Time to assess. Time to make a plan. Time to figure out what substitute products they can pivot to. A hospital that has, say, 30 days of a critical product on hand is in a fundamentally different position than one that has ten.

Unfortunately, most healthcare facilities—especially non acute locations such as physician practices, ambulatory surgery centers, long-term care facilities, and smaller hospitals—simply don’t have the physical space or the capital to hold a month of inventory across everything they purchase. Large health systems with their own distribution centers and consolidated service centers have some ability to stock critical items more heavily. But they are the exception. For the vast majority of healthcare providers, how much buffer they have against a supply disruption depends almost entirely on what’s sitting in their distributor’s warehouse.

That’s why Medline has made a deliberate choice to carry more inventory. Across national brand products, we hold an average of 30 days of inventory in our distribution centers. Including our own manufactured Medline Brand products, that number climbs to 80 days. With 45 distribution centers spread across the country, positioned to reach 95 percent of U.S. healthcare customers with next-day delivery, the goal isn’t just efficiency—it’s proximity. Finished product that’s already in your region, already on a shelf, can move fast when it needs to.

Working with manufacturers, not around them

One thing I want to be clear about: this isn’t a strategy we’re pursuing in isolation. The most powerful version of forward-deployed inventory happens when distributors and manufacturers are genuinely working together—sharing information, giving each other early warning, and working together to build resiliency jointly.

We’ve seen what good partnership looks like in practice. When a manufacturer tells us their order processing systems are going to be limited or down for a week or two—say, during an ERP transition—we can buy heavy in advance. When a manufacturer knows they’re going to face a supply disruption and communicates the challenge in advance, we can put a product on allocation before customers have a chance to over-order—which means the inventory we have on hand stretches further and lasts longer for everyone.

We’re also building formal programs with select manufacturers around critical SKUs, where a shortage has direct patient care implications. We work with these manufacturers to hold more than our standard 30 days on these critical SKUs because we know how important they are to our mutual customers. There is a real cost to holding that extra inventory, but we work with these select vendors to not have a cost impact to our customers.

Resilience that doesn’t cost the customer anything

A lot of supply chain resilience programs in this industry come with a price tag attached. Stockpiling arrangements, emergency sourcing contracts, premium procurement provisions—they can add meaningful cost to already-strained hospital budgets.

What I’m describing doesn’t add cost to the customer. If a supply disruption hits and we have product already in our distribution centers, that buys our customers extra time to make decisions—at no charge to them. That time is the difference between a measured response and a crisis. And because we own the trucks and the distribution infrastructure, the last mile of that resilience is already built in.

I’ll be honest: this isn’t a silver bullet. No single strategy eliminates fragility from a supply chain as complex as healthcare’s. But while we all look for more ways to mitigate disruption risk, the product that’s already in the warehouse is already doing its job. When industry trends are moving toward leaner inventory, Medline is going the other way—leaning further into distribution, deepening manufacturer partnerships, and focusing on the critical SKUs where additional coverage makes the biggest difference. We think there is more opportunity ahead, and we’re going to keep building for it.

Kyle Hoffmann is senior vice president of vendor relations at Medline.