Prime directive

CHICAGO – Eye for Transport’s (eft) annual 3PL & Supply Chain Summit here at the onset of summer in mid-June tends to spark a flurry of topical ideas for discussion during Healthcare Purchasing News’ Editorial Advisory Board meeting held during AHRMM later in the summer.

Unfortunately, healthcare Supply Chain professionals typically don’t attend this worthwhile event, now in its 15^th year, not due to lack of scintillating topics and speakers (it has both) but more because of an inability to extract themselves from daily operations or even budget for it, particularly if attending AHRMM a month or so later any of the popular IDN Summits carries a higher priority. Granted, those events have direct – and cost-justifiable – applications to healthcare operations. Eft’s event, on the other hand, concentrates on the supply chain function in the manufacturing, distribution and retail arenas with a tentacle extended toward healthcare supplier challenges. Yet eft’s event serves as an essential barometer for issues the healthcare supply chain community may face.

In previous years, the eft event explored a host of potential “disruptors” threatening to crack the status quo, ranging from 3-D printing to augmented and virtual reality devices (AR/VR) to drones to driverless/self-driving vehicles to machine learning/”Internet of Things” to advanced customer-centric, real-time software applications that intrigued attendee curiosity even as they sought tips on such esoteric issues as filling empty spaces in trailers with products to maximize logistics value.

This year, however, the buzz seemed to hone in on two corporate intruders and their ilk threatening to disrupt their acceptable pace toward progress, if not the status quo.

In fact, the fawning and fear rekindled memories of then Columbia/HCA Healthcare Corp. CEO Rick Scott’s keynote at AHRMM in the mid-1990s when the for-profit powerhouse remained perched confidently atop the peak of its industry influence. Back then many supply chain pros feared the Columbia/HCA-inspired consolidation wave among wary providers, GPOs and suppliers would result in massive job losses that never materialized. By decade’s end, Columbia/HCA succumbed to financial scandal, just as the dot-com fad swooped in to rekindle similar fears.

Surprisingly, AHRMM attendees chose not to foment any kind of rebellion (polite and respectful or otherwise) against Scott (now governor of Florida), but rather bestowed upon him what could only be described as rock-star reverence, which Scott obviously relished. He proclaimed platitudes and positive feedback about the value of supply chain management, leaving attendees with cotton candy assurances that supply chain was valuable and valued.

Many here made noise about the impact of Amazon and Uber and similar app-based services seeking to satisfy increasing customer demands (no matter how unrealistic) and expand into more areas in their quest for venture capital funding. Speakers cloyingly classified this “trend” as the “Amazonification” and “Uberization” of logistics and supply chain services.

To wit, one prominent supply chain senior executive boasted to the crowd that “Amazon won’t do well in groceries, for example.” Amusingly, the next morning Amazon announced its acquisition of Whole Foods.

During one popular panel discussion, titled, “Keeping the customer by web, brick, truck and drone: Creating a seamless loop to close the retail ecosystem,” the panel included an Amazon senior executive who, not surprisingly, assumed the role of Elvis Presley re-entering the building after a 40-year sabbatical.

Even though the moderator gamely attempted to incorporate perspectives from all of the panelists, the audience clearly wanted to hear from Ed Feitzinger, Amazon’s Vice President, Global Logistics, about whether they were going to take over the world like some nefarious organization from a James Bond film.

“Amazon’s approach starts with the customer and works backward,” Feitzinger said. He further clarified that he was speaking about their direct/business-to-consumer business and not anything else. “We put assets and prices together to meet customer demand,” he continued. “You don’t have a choice to not meet it.” Not exactly a profound truth, but simple enough in its profundity.

Feitzinger asked the crowd for a show of hands on how many were Amazon Prime members. Most in the audience raised their hands. Playing to an obviously supportive crowd that still seemed to question competitive, corporate and job security, he insisted, “We have to meet your demands and keep you satisfied.”

The moderator cut to the chase: “Why is there all this worry about what Amazon is going to do? With Amazon’s long-term goal of vertical integration, are there increased opportunities for 3PL companies with Amazon?”

Feitzinger deftly dodged the “will we all be employed in our current companies or work for Amazon?” intent. “I can’t respond to worries and rumors about things like 3PL creation because I don’t know. Our No. 1 concern is customer satisfaction-based. You get the product to the customer. Period.”

But if that didn’t satisfy the crowd, this apparently did: “We have no interest in being in the 3PL space,” Feitzinger said.

Aside from the Amazon and Uber obsessions that permeated educational sessions, however, much of the event centered on technology-driven innovation with a keen focus on customer-centric services and fulfilling customer expectations via software systems designed to improve operations and increase process efficiencies.

Yet amid all the future-casting about software some execs proffered realistic assessments of those industries reportedly a decade ahead of healthcare on the IT front.

For example, during one panel, Drew McElroy, COO and Co-Founder, Transfix (one of those new “Uber-like” ventures), tempered talk of tech being able to use “Big Data” for real-time analytics just yet. “We’re getting there,” he said. “Capabilities continue to grow with platforms evolving.”

Meanwhile, fellow panelist Jett McCandless, CEO and Co-Founder, Project 44, lamented the languishing reliance on legacy systems, electronic data interchange (EDI) and fax by quipping, “That’s like trading stocks today with last month’s newspaper.”

Bill Goodgion, President, Ascent Global Logistics, set a tone when he downplayed perceptions about Amazon’s and Uber’s impact on the logistics industry. He noted that logistics remains “a highly fragmented business.” Then he uttered something that should sound familiar to those in healthcare supply chain circles: “Technology and data doesn’t solve all of our problems,” he remarked. “We’re not threatened by digitization and don’t believe [those companies] will drive 3PLs out of business.”

Polite defiance duly noted, it remains to be seen whether that vision remains short-sighted or prescient. But at least this offers healthcare counterparts a view to a drill.