Healthcare Supply Chain Top 25 for 2020

Hopefully the release of Gartner’s Healthcare Supply Chain Top 25 two weeks ago was a reassuring, normal event in what has been anything but a normal year. Each year since 2009, in the second week of November, we reveal our list of the leading supply chains across the healthcare and life science industries. But there was a point this year when we weren’t sure that it would be appropriate to have a Top 25. Given the disruption that the COVID-19 pandemic has wrought, would people really care about the Top 25? Could it be seen as tone deaf given the greater issues healthcare was facing? Not easy questions to answer. Even if we went ahead with a top 25, we wondered if it would be better to highlight collaboration instead of competition. A key learning during the early stages of the pandemic was that collaboration is critical to mitigate the chaos caused by the virus. Would it be right to deliver a ranking that made direct comparisons between supply chains? But as the pandemic took hold, we realized that successfully dealing with COVID-19 was in many ways a supply chain issue. Supply was disrupted because of impacts to logistics networks and suppliers’ workforces. Demand spikes were caused by increased usage (think PPE, ventilators and diagnostic equipment) and stockpiling by customers. Supply chains were tested.  Some broke. Some barely made it. Many withstood the storm. Leaders, however, excelled. As Rahm Emanuel said in 2008 (echoing Winston Churchill’s comment from the 1940s), “You never want a serious crisis to go to waste. And what I mean by that (is) it's an opportunity to do things that you think you could not before.” That is why we decided to move forward with the Healthcare Supply Chain Top 25 this year. We had a hunch that we would discover some impressive supply chain innovations as the result of the pandemic, and we were correct. So here’s our ranking for 2020: All three of our Masters — Mayo Clinic, Intermountain Healthcare and Cardinal Health — repeated from 2019. Additionally, all three of them have earned Master status each year since we started the recognition in 2018. To be a Master, a supply chain must earn a top five score in any seven of the last 10 years. Becoming part of the top 25 is challenging, and reaching the top five in any year is an incredible achievement. But being able to do this year after is truly an incredible achievement. Congratulations to all three of our 2020 Masters! At the top of our pyramid is another familiar company — Johnson & Johnson earned the top spot in our ranking for the second year in a row. As in previous years, J&J continues to improve its foundational capabilities, but where it truly sets itself apart from the other distinguished supply chains on the top 25 is in its approach to supply chain innovation. While other supply chains make notable strides in individual projects and initiatives, J&J has no peers in its commitment to finding novel supply chain solutions to the challenges of modern healthcare. It has embraced the bimodal approach — including the requirement to “fail fast” — and has developed a true culture of innovation.  Joining J&J in the top five are CVS Health, Cleveland Clinic, McKesson and Banner Health. Both CVS Health and Cleveland Clinic repeat as top five companies from 2019, McKesson rejoins the top five after a one-year absence and Banner Health enters the top five for the first time. The rest of the top 25 is a well-balanced group of health systems, manufacturers and distributors. Four supply chains made their debut in the top 25 this year — Baylor Scott & White Health, Johns Hopkins Health System, Indiana University Health and Biogen. Concepts That Define Supply Chain Leadership in Healthcare No one could have predicted 12 months ago that the healthcare supply chain would have been as tested (or discussed) as it has been in 2020. The COVID-19 pandemic is a fundamental challenge to supply and demand on a massive scale. Extreme demand swings stressed, and in some cases broke, supply chains, bringing into sharp focus what worked and what didn’t.  For many supply chain organizations, the temptation has been to focus on the day to day given the unpredictable nature of the crisis. But leading supply chains are also embracing the disruption as an opportunity to drive their supply chains further. They are adding new capabilities that will benefit not only their response to the pandemic, but make their supply chains better once the world returns to a new normal. Supply chains that made the Healthcare Top 25 this year are learning from the pandemic, reinforcing strengths and addressing weaknesses. Leading supply chains aren’t waiting for a return to normal before making changes, as they understand that there is a limited window in terms of corporate willingness to make the required investments. Human nature tends to overstate the importance of recent events, but forget about them quickly. For example, Hurricane Maria sparked lots of concerns about Puerto Rico having too much risk, but three years later those concerns have quieted. That means the time is now to make meaningful changes. Leading supply chains have discovered some important underlying concepts since the beginning of the pandemic, and have aligned their improvement activities to them: Resilient supply chains protect the business in multiple ways Disruption can be leveraged as a catalyst for change Supply chain strategy must be clearly aligned to that of the organization More details on these three concepts can be found at Gartner Supply Chain Top 25 Spotlights Leadership and Gartner Healthcare Supply Chain Top 25. In Conclusion No one expected 2020 to turn out the way it has. Looking back to last year at this time, we were still a few weeks away from hearing about a new virus emerging in Wuhan. So much has changed in 12 months, and an appreciation for strong healthcare supply chains is a good example. We’re proud to continue our tradition of recognizing leading supply chains across the spectrum of healthcare, and hope you take the time to learn about their successes. Stay healthy, and see you in 2021! Stephen Meyer Senior Director Analyst Gartner Supply Chain [email protected]