Challenges in supply chain management in Brazil after Covid-19

Brazil recently took the seventh position in the world ranking of deaths due to the new coronavirus, surpassing eight thousand deaths and more than one hundred thousand confirmed cases. The mandatory use of masks, the banning of public roads and even the “lockdown” are part of the package of emergency measures adopted by States and Municipalities across the country. With so many uncertainties in the present around the direction of the pandemic, reflect on the future after Covid-19 has become an even more challenging exercise.

In the health sector, the management of the medical supply chain placed government authorities, suppliers and public and private hospitals on opposite sides, especially after Federal Law 13,979, which allowed the State to “confiscate” goods and services from private institutions, affecting the stability of the free market, generating legal disputes and reducing the inventories of suppliers and hospitals.

With less – and more expensive – hospital products, whose import was also impacted by the high dollar, the supply did not meet the exponential increase in demand and, in just one week, the price of a hospital glove, for example, shot 469%, according to a survey by the digital platform Bionexo, which connects thousands of hospitals and suppliers in the country. Faced with this supply crisis, there are lessons that can help to act together in the present and to think about the future of the supply chain.

It is essential to explore the technology and intelligence systems available to assist in combating the pandemic. Since the beginning of the crisis, some hospitals have created stocks to ensure the protection of professionals working on the front lines and the continuity of service to the public. It happens that the calculation of this stock is carried out on the regular average occupancy rate of 70% to 95%, and not on the current rate of 35% to 55% (based on the hospitals that integrate the database of Bionexo in São Paulo and Rio de Janeiro). This lower occupancy rate reflects the elimination of elective surgeries, for example. Therefore, hospital centers may have stock above what is necessary, leaving other units unattended.

Through an intelligent system of algorithms it would be possible in the short, medium and long term not only to detect public and private hospitals with excess stock, but also to map the quantity of supplies needed for each hospital in a certain period of time, relocating the items between units according to urgency and availability. In this way, stocks could be used more effectively in favor of the population.

In addition, the pandemic highlighted the need for greater integration between the political and economic actors that make up the health sector in Brazil. The organization of a coalition between public authorities, industry and hospitals (private, public and philanthropic) could establish a flexible price band due to increases in the value of the input and other factors, promoting greater predictability in the value of hospital products and protecting the sector external factors such as dollar instability and variations in international demand and supply.

The pandemic will have lasting effects on all sectors of society, especially the hospital. Detecting the current challenges of the supply chain, learning from them and developing joint policies to strengthen the sector in the short, medium and long term is essential not only to overcome this moment of crisis, but also to reinvent itself in the face of new business models that approach in the post Covid-19 world.

Maurício De Lazzari Barbosa

Founder and Chairman of Bionexo

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