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Health few methods we’ ve adopted, such as conservation around product usage and sourcing alternative products. We’ ve also devised a bottle-to-bag process, which means transferring solutions from irrigation bottles into IV bags.
“ We had some product reserves in place ahead of the shortage, but they weren’ t sufficient to maintain normal operations for the shortage’ s duration. To mitigate the impact of future shortages, we are now evolving a self-distribution model to place more emphasis on resiliency versus operational efficiency. While we’ re not able to store enough of any category to overcome months of shortages, we can identify SKUs where we can increase our inventory reserves to minimize the clinical impact of future shortages.”
To overcome inconsistencies in how suppliers report product shortages, Banner has implemented several new strategies.“ We’ ve created our own internal system to detect and investigate unexpected shortages at the time of purchase,” Mike says.“ We’ re also partnered with our national group purchasing organization, which does an excellent job of informing us when they become aware of market impacts from product shortages. Lastly, we subscribe to daily notifications of known or expected disruptions that may result from natural disasters, business announcements, product recalls, or political unrest.
“ In terms of technology, we’ re also involved in a multi-year effort to renew our ERP software, which will enable better connectivity between business units and clinical service lines. Such improved connectivity will provide enhanced oversight of workflows, product usage, and expenses, helping us to identify opportunities for further improvement.”
The future of Banner
When it comes to positive supply chain relationships, Mike considers three attributes as particularly important.“ Transparency, timeliness, and collaboration,” he states.“ We need our suppliers to be transparent about where and how products are made so we can efficiently respond. While there will inevitably be supply issues over time, communicating potential problems in a timely manner enables us to plan and find an appropriate solution that minimizes disruption. Bad news delivered early is much easier to mitigate than trying to deal with an emergency issue, especially in the healthcare space.”
To close our conversation, Mike turns his attention to what the future holds for the organization.“ One of Banner’ s strategic goals is to become a High Reliability Organization( HRO) through collaborative relationships with suppliers,” he reveals.“ HROs are organizations that operate in high-risk environments but experience fewer accidents than expected. We’ re prioritizing this goal in 2025 by adopting resiliency language, forming agreements with suppliers, and emphasizing our medical expertise across the network.
“ Our overarching goal is to provide best-in-class, highly reliable care that is delivered with extraordinary service,” Mike concludes.“ Known for our advanced strategic planning and execution, we’ ve made the decision to extend our 20-year strategic plan to demonstrate our focus on long-term goals. This progression has shifted from focusing on acute care to now concentrating on population health, as well as expanding our focus to include preparedness.” ■
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