In the healthcare supply chain, manufacturers and shippers have faced a number of challenges that have disrupted traditional channels and business transactions. And, the aftershocks of these complexities are rippling through transportation modalities. Overall, these challenges such as shorter lead times, talent shortages, and capacity volatility, coupled with the lasting effects of the global pandemic during the last 12 to 18 months, revealed fragility to standard supply chain operations, largely because the industry wasn’t prepared for the level of disruption that occurred.
Additional hurdles including cybersecurity attacks that impacted gas and meat purveyors, cargo/container ship reliability and port congestion, and protectionist policies enacted to encourage domestic trade are driving up costs and delays for transportation as well.
As we emerge from the pandemic and face new disruptions, we look with a sense of purpose at how the lessons we learned can be turned into new strategies that can help healthcare manufacturers and shippers overcome these complexities now and in the future.
Become a Shipper of Choice
In today’s transportation market, the pendulum that swings between shippers and carriers during the ebbs and flows of the freight cycle more extreme than in decades past. Because of this, becoming a Shipper of Choice remains a strong strategy to quell rate increases and capacity volatility, as well as building carrier partnerships.
Being a Shipper of Choice means that your business practices are aligned with what carriers consider desirable. Shipper of Choice behaviors include level loading, drop trailer privileges, increased tender lead time, and increased flexibility in appointment times for loading and unloading across multiple shifts and expanded days of the week. This matters because carriers are more apt to keep their capacity commitments with these conditions in place. Flexibility is key and carriers that are afforded that luxury will keep their capacity working more closely with companies they choose as Shippers of Choice.
There are staffing challenges along every point of the healthcare supply chain, especially in the warehouse setting, which ultimately impacts the ability to have product ready on time and staged for carrier pickup or for unloading to keep carriers moving. At locations where carriers are delayed due to in-gating, out-gating, loading, unloading, and products not ready, carriers are hesitant to work with these companies and, if they choose to, may charge a premium tied to the inefficiency of the pick-up or delivery operations.
Investments in new technology for labor management inside the warehouses are critical. This technology provides performance metrics visibility, labor management, and data automation within a warehouse, enabling stakeholders to build labor strategies that improve efficiency.
As a result, companies gain visibility into performance metrics down to the individual employee level, customer delivery status, performance analysis, and contractual key performance indicators. This can lead to double-digit labor productivity improvements, as well as increased satisfaction for carriers working with you.
When it comes to transportation and working with carriers, conducting a LEAN assessment of the truck traffic identifies opportunities to improve the location and the flow of on-site traffic. Evaluate and identify incremental improvements to advance shipping-receiving productivity, eliminate constraints, or improve driver comfort. One example of a simple improvement is to perform check-ins, and then direct arriving trucks from the gate to the warehouse shipping or receiving office, eliminating parking congestion and delays.
Other strategies include increasing load-tender lead times, sharing lane volume forecasts to enable carriers to make capacity commitments early, and increasing the number of available shipping and receiving slots in the dock schedule to provide flexibility to carriers, as well as maximize daily shipping and receiving.
Finding a Transportation Partner
In today’s competitive healthcare industry, your transportation network should be flexible, efficient, and perfectly in tune with the dynamic nature of your business. But, through disruption and other complexities, managing a transportation network on your own is time consuming and costly. Like many shippers, you’re probably constantly seeking out ways to reduce freight costs, improve service levels, and drive efficiencies.
Historically, companies have outsourced primarily to cut costs. Today, it is about optimizing the network, becoming a Shipper of Choice, and reaping the benefits of strategic outsourcing such as accessing skilled expertise, reducing overhead, staffing flexibility, increasing efficiency, reducing turnaround time, and, ultimately, improving patient care.