Fast Medicine

Screen Shot 2016-05-31 at 9.00.10 AMA diversion into the world of high fashion in this week’s post… It’s an area that everyone who knows me would admit I know nothing about. Nevertheless, here we go…

Martin Schulte, a Partner at Oliver Wyman management consultants, recently posted a fascinating article on, of all things, fashion industry supply chain management. It contains some interesting nuggets for healthcare.

Background: before the 1980’s, couture was customized, reserved for the wealthy, and slow to diffuse into popular culture from biannual fashion shows.

Two disruptive changes shook up the fashion industry in the 1980’s and 1990’s:  The first was a move to what is called the “fast-fashion business model” where couture was “translated” from the runways and quickly mass-produced.  The second disruption was the emergence of discount realtors like H&M and Topshop, which offered extremely fashion-sensitive clothing (at cut-rate prices) to the masses.   These two trends quickly democratized fashion.

These two trends forced retailers to think carefully about supply chain.  After all, they are trying to sell highly perishable merchandise to highly fickle consumers.  What the retailers did, in the end, was to respond by segmenting their business: they tailored the supply chain to reflect trends and consumer demand.  The turnaround time differed for the three main clothing categories.  These were:

The Evergreens: fashion staples that could be transported from Asia by boat in a cost-efficient manner and in predictable volumes. The clothes are not fashion driven and it’s not worth paying for a fast and flexible supply chain. See: men’s khaki pants.

Traffic Generators:  in contrast, are are trendy items that need to be delivered quickly.

Items often have concept-to-shelf times below 20 weeks. For such fast-tracked items, the final production steps often have to be done in Turkey or North Africa for European retailers, or Mexico for the US and Canada, and the goods are often transported by air. To ensure reliable manufacture, production capacities are frequently reserved in advance and pre-coloured fabrics prepared up front. The final steps validate the item, fine-tune the fit, and so on.

The last segment is the “Chase” Stream:

The most sophisticated textile retailers indeed go beyond this, putting in place an additional final step: this is a separate process that swings into action if a trend is missed. Once set in motion, this ‘chase’ stream can produce an item from concept-to-shelf in less than ten weeks.

Here’s why I think this business adaptation is interesting:

Patient access remains a big problem for healthcare practices.  Leading medical centers like the Cleveland ClinicUCLA and PennMed and are now offering guaranteed same-day appointments for new patients and I’ll bet that this is a national consumer expectation in a year or two.

Cleveland and Penn can do this by being large enough (with enough hospitals and enough specialists) to have a predictable supply of cancellations on tap and high enough volume to make their yield calculations pretty reliable.   These organizations have clearly decided to segment the time-sensitive shopper. I’d hazard a bet that these health systems have specifically allocated capacity for the healthcare “traffic generators” — the folks who (unlike Evergreen patients) will go elsewhere if they can’t be seen right away, making their opportunity to engage with the system somewhat perishable.

To me, the trick to all of this is pre-planning.  Like the fashion industry, healthcare can do guaranteed same-day-visits by pre-staging resources so that a visit can quickly be pulled together when a new patient calls.

Pre-planning is also the answer to acting quickly when you’ve missed the boat operationally.  Outside of a formal disaster plan, I’ve yet to see anyone in healthcare come up with an analogue to fashion’s “chase stream” (say when there are suddenly many more patients looking for service than there is supply e.g. high demand for ID in the case of a pandemic, or a crush in demand for a newly announced cancer therapy)…In most systems patients just wait till capacity is gradually augmented or demand falls.

What would a healthcare “chase stream” look like?  Perhaps teams of “pluripotent”staff who could quickly be partnered with a specialist physician to respond to a surge in demand.

One way or the other, other industries long ago learned that segmenting the customer population on the basis of the perceived urgency of their needs and their willingness to seek service elsewhere is a savvy approach to keeping everyone happy.

2 replies »

  1. Patient access is a big problem for healthcare practices and the solution is difficult to implement.