HIDA PRIME VENDOR
BY ELIZABETH HILLA, HIDA SVP
New Allocation Best Practices Work Toward Harmonizing The Supply Chain Care providers, distributors, manufacturers, and GPOs contributed to resource recommendations
Collaborative, whose mission is to transform the healthcare supply chain through best practices for processes and data. The workgroup’s result: a white paper with steps specific to distributors, manufacturers, care providers, and group purchasing organizations, along with a set of standard definitions. The new resource, “Allocations: Best Practices For Conserving Medical Supplies During Shortages,” is available to download at no charge from HIDA.org/Distribution/Resources/ White-Papers. It addresses transparency, information sharing, calculations and processes, and specific challenges. Among the recommendations:
ʯ Manufacturers should set allocations When pandemic-related demand for personal protective
to their distributors, and allow their
equipment exploded in March 2020, medical supply distributors
distributors to set customer allocations,
responded by doing what they do best – working alongside their
to prevent customers from receiving
healthcare provider customers as trusted partners. They tapped
conflicting information.
into their logistics and planning expertise to rely on a tool used in times of short supply – allocation. The pandemic underscored the usefulness of allocation. It preserves inventory for customers as long as possible during a
ʯ The baseline period for allocation calculations should be the same
Elizabeth Hilla
quarter from the prior year.
ʯ When communicating allocation
shortage, ensure that customers receive some portion of a lim-
amounts to trading partners, the supplier
For more informa-
ited supply at previously agreed upon prices, and prevents hoard-
should provide units not just percentages.
tion about the
ing. It also makes it more difficult for opportunistic brokers to buy up limited supplies and resell them to the highest bidder – a
Health Industry
Allocation has always been an impor-
Distributors Asso-
tant tool for conserving supplies during a
ciation, the Health-
shortage, but each organization through-
care Supply Chain
between healthcare trading partners is more important than ever,
out the medical products supply chain
Collaborative and
HIDA last year convened an expert workgroup to develop specif-
seemed to take a different approach. We
related resources
ic, best practice recommendations for medical supply allocations.
believe these new recommendations are an
and events, visit
The initiative lies at the heart of HIDA’s Healthcare Supply Chain
important step in aligning the processes.
HIDA.org.
familiar scenario at the onset of COVID-19. Understanding that strong alignment and communication
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December 2021 | The Journal of Healthcare Contracting
