An engineering student team at the University of Michigan partnered with Michigan Medicine and the Bellwether League Foundation to improve the hospital’s supply chain during the COVID‐19 pandemic. The team analyzed troves of data using Python and Tableau to create meaningful tools for Michigan Medicine.

This project, in collaboration with Michigan Medicine, aims to analyze and suggest strategic supplier partnerships to the University of Michigan Hospital. Michigan Medicine currently partners with over 975 manufacturers and 425 vendors to purchase and store medical supplies for over 200 different product categories. This vendor performance analysis serves to strengthen the Michigan Medicine supply chain recovery and support a new, resilient approach to reviewing purchase order delays and arrivals. Ultimately, this will optimize standards for performance and existing supply chain contracts to help strengthen future contract negotiations.

Michigan Medicine collaborators provided the CHEPS team with data for all purchase orders from December 2021 to January 2022. With over 100 data fields in the dataset, the first step was to determine which data fields were relevant to our study. Using Python, we then created Sankey diagrams to show product flow from manufacturers to vendors to Michigan Medicine for each category, as well as their associated on-time fill rates. This illustrated the differences between direct and distributed supply chains. Finally, to sustain the value the analysis could provide, a Tableau dashboard was created, highlighting strong and weak supplier performances.

Clear differences emerged between direct vs. distributed supply chain. In direct supply, the items are shipped directly from the manufacturer to Michigan Medicine. In the distributed model, items are sent from the manufacturer to third‐party distributor then to Michigan Medicine. This approach has shown to be beneficial for Michigan Medicine. Additionally, we determined that there are many categories of Michigan Medicine items that are supplied by 12+ manufacturers. Consolidation of suppliers improves on‐time and full delivery performance. Rationalizing and optimizing the supply base also minimizes product variation and delivery delays, ultimately improving patient safety.

Michigan Medicine’s experience, like others during COVID, highlighted the criticality of supplier on‐time performance. At least three additional flaws emerged, with far broader implications. First, sourcing and contracting practices must elevate on‐time performance measures in supplier selection and remediation efforts. Second, providers must redouble their efforts to tighten supply formularies, strengthen strategic supplier partnerships, and rationalize the number of unique SKUs. Lastly, the industry must revisit the bifurcated direct supply vs. distribution model. The stark difference in performance between the direct and distributed channels emphasize the importance of reliable and efficient distribution practices, especially during periods of supply chain volatility.

The seminar series “Providing Better Healthcare through Systems Engineering” is presented by the U‐M Center for Healthcare Engineering and Patient Safety (CHEPS): Our mission is to improve the safety and quality of healthcare delivery through a
multi‐disciplinary, systems‐engineering approach.

For the Zoom link and password, and to be added to the weekly e‐mail for the series, please RSVP or contact genehkim@umich.edu