Healthcare supply chains have been struggling with inefficiencies for years. While industries like retail or automotive have embraced data-driven, streamlined processes, healthcare supply chains have been slower to adapt. Many still lack basic visibility into inventory, demand forecasting, supplier risk and performance, and there’s a complete lack of true visibility between themselves and the manufacturers. This lack of transparency leads to waste, drives up costs, burns out staff, and, in some cases, may impact the quality of patient care.
I recently spoke with Darren Baginski, vice president of Healthcare at RiseNow, about how health systems are rethinking their supply chain strategies to address these issues.
Where we find ourselves
Without a complete, accurate picture of inventory, health systems are vulnerable to unexpected disruptions and unnecessary risk. Covid-19 made this all too clear, exposing gaps in tracking and control that many executives didn’t realize existed. This lack of visibility led to emergency spending, duplicative orders, over ordering and treatment delays due to inaccessible supplies — directly impacting patient care. Executives found themselves relying on outdated systems and manual processes (remember “Burn Rate Calculators”?) that simply couldn’t keep pace with demand. Even today, these problems still serve as a wake-up call for building supply chains that are more agile, efficient and proactive versus reactive.
Baginski reflects on that time, saying “When the pandemic hit, many health system executives were shocked to realize just how little visibility they had over critical supplies. They didn’t know where items were, what was in stock, or how quickly they could get replacements. The gaps weren’t just inconvenient; they were affecting patient care. It was a massive wake-up call.”
Baginski and the RiseNow team have used that experience to help health systems redesign their supply chains from the ground. They assess process, data and talent, then work closely with supply chain teams to engineer those gaps out of the process. Three of the most common gaps RiseNow sees are around poor inventory visibility/demand planning/forecasting, supplier risk and relationship management, and ongoing issues when not working directly with manufacturers.
We have to stop flying blind
“Many hospitals don’t know what they have, where it is, or how much of it is left,” Baginski explains. “This lack of visibility means they can’t make educated or quick decisions on reallocating resources or responding to emergencies. Without accurate, real-time inventory tracking, healthcare providers are often relying on guesswork — or institutional knowledge — to guide decisions rather than the facts.”
Demand forecasting also remains a challenge. Health systems often misinterpret short-term demand spikes, leading to a phenomenon known as the "bullwhip effect," where increased orders cause downstream players to over-respond, creating excess inventory and waste.
When a hospital or health system temporarily increases orders — say, due to the addition of a new practice or a short-term spike in patient volume — this demand signal can trigger a chain reaction. Distributors, seeing the sudden increase, stockpile more inventory, and manufacturers adjust production forecasts, assuming a permanent demand shift. But once the temporary need subsides, these downstream players are left with excess inventory that isn’t needed. Accurate forecasting at the provider level would prevent this costly cycle.
Communication breakdown
The recent shortages of IV fluids after Hurricane Helene illustrate, yet again, the importance of supplier management. When Baxter’s North Cove facility, a major supplier of IV solutions in the U.S., was forced to shut down due to storm damage, hospitals across the country scrambled to manage limited supplies that were critical for hydration and life-saving interventions. Due to limited availability, hospitals began rationing IV fluids, delaying elective surgeries, and in some cases substituting them with oral medications or alternative hydration methods like Gatorade or Pedialyte to conserve IV stocks.
This supply disruption underscores the need for direct, proactive relationships with suppliers. Without direct relationships and reliable backup sources, healthcare providers had few alternatives when their primary supplier faced constraints. Baginski notes, healthcare providers are often “left scrambling” when a disaster affects a major supplier, highlighting the risk of relying on a single supplier. To reduce these risks, healthcare systems can benefit from stronger, more direct relationships with manufacturers, allowing for faster access to secondary supplies and more flexible response options when disruptions occur.
Alternatively, healthcare systems can minimize supply disruptions by removing the middleman altogether via a consolidated service center (CSC) model. This approach gives health systems the platform to develop strategic relationships with manufacturers, avoiding reliance on a single distributor and giving them more control over inventory and stock levels. By managing their own inventory, healthcare providers can respond more flexibly to demand shifts, sourcing supplies directly when necessary and avoiding the bottlenecks that come with third-party channels. Baginski points out that by consolidating supplies in-house, systems can "forecast needs more accurately and prevent over-reliance on distributors," which helps maintain a steady flow of essential items, even during unforeseen events like natural disasters, pandemics, strikes… the list goes on.
A fundamental shift
Healthcare supply chains are undergoing a radical transformation to meet today’s challenges, and RiseNow’s expert team is at the forefront, enabled by technology partners like Tecsys. As Baginski highlights, these shifts aren’t just operational changes — they’re fundamental improvements that prepare healthcare systems to meet future challenges head-on, reducing waste, minimizing disruptions, and, most importantly, ensuring that patient care remains seamless and responsive.
This goes well beyond keeping shelves stocked — it’s about rethinking what a healthcare supply chain can be and ensuring that healthcare providers are prepared for whatever comes next.
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Darren Baginski, RiseNow’s VP of Healthcare, brings over 25 years of experience in supply chain leadership, including roles with Cardinal Health and Owens & Minor, where he developed expertise in strategy, healthcare logistics, inventory management, and supplier relations.
RiseNow is a strategy design and execution firm that builds and powers ground-breaking procurement and supply chain practices. By focusing on talent and operating models that not only support but actively transform day-to-day work, RiseNow's system-agnostic design, build, operate approach helps enterprise organizations and large healthcare systems integrate technology to enhance relationships and drive transformational change and outcomes.