Discover how McKesson’s ERP transformation built a resilient supply chain and adaptive billing systems to power healthcare response during COVID-19.

A well-implemented ERP transformation that updates the supply chain and consolidates billing can be crucial for healthcare organizations responding to extreme situations like Covid-19 Pandemic. The pharma distribution industry’s pandemic response highlights key elements necessary for operational resilience and innovation during crisis of this magnitude.

The Power of Modern ERP and Supply Chain Flexibility

In recent years, pharmaceutical distributors encountered various challenges due to pandemic-related disruptions, supply chain issues, unpredictable demands, and evolving compliance requirements. Organizations with flexible IT infrastructures have been able to respond more effectively to these changes. Implementing a modular ERP strategy with interconnected systems has enabled these organizations to manage large volumes of daily transactions, shipping vaccines, PPE and medicines at an unprecedented level. They scaled services to a different level rose to the demand when it came to survival of humanity. The combination of technology and operational adjustments contributed to their ability to address these challenges.

The challenges faced

1. Introduction of new product categories such as drugs, PPE, accessories, and equipment.
2. Operational shifts require faster supply chain transportation and adapting to fluctuating demand.
3. Inventory management with limited warehouse capacity and minimal dwell time.
4. Managing demand spikes for certain products amid supply constraints and unexpected shutdowns.
5. Integrating legacy systems with new supply chain demands, which is difficult and risky to change rapidly.

These foundational challenges and changes set the stage for how organizations respond to real-time crises and invest in technologies that would continue to address the real learning coming out of crisis of this magnitude.

Living by the day to handle upsurge in demand

In early 2020, Distributors saw customer orders for COVID-19 drugs and supplies surge up to tenfold, outpacing inventory. Supply was further limited by factory shutdowns overseas, especially for PPE. Ongoing stay-at-home orders and emergency use authorizations have continued to affect product availability not only in USA but in most parts of the world. The adaptive supply chain enabled by the ERP system allowed the large distributors to respond with a data-driven, transparent strategy to manage shortages and still fulfill orders quickly.

Enterprise analytics for collaboration and visibility

Combining procurement specialists, administrators, and former clinical pharmacists collaborated and used expertise to monitor public data & track hospitals/ICU volumes. This collaborative approach, supported by dedicated data scientists and Enterprise Analytics, improved communication and resource use, enabling better predictive analysis.

Urgent response, shared responsibility

Partnerships with suppliers accelerate delivery of critical items, and clear communication with customers is essential as FDA guidelines shift. Collaboration with government agencies enables agile sourcing and effective supply chain coordination. ERP Supply and demand planning tools allowed organization to shift resources where they needed most and done swiftly.

Supporting health systems through equitable allocation

When products are in short supply, manufacturers and distributors may set allocation limits to distribute inventory more broadly over time. Distributors used an allocation system based on typical customer usage to manage personal protective equipment and other supplies during high demand. Custom build applications highlighted which items are on allocation, available quantities, and provides filled order reports. As supply stabilizes, allocation limits can be increased or dropped. Distributors helped customers adapt ordering strategies for products such as N95 respirators, which were not commonly used in non-acute settings before COVID-19.

Transforming Billing systems in Times of Crisis

Equally important is an adaptable billing system. The shift to dynamic, rule-based engines—capable of instantly handling new reimbursement codes, government mandates, and episodic billing scenarios—has been instrumental in supporting healthcare partners throughout crisis conditions. Integrating such a billing platform with the broader ERP environment ensures accurate, compliant, and timely financial operations, even as requirements change overnight.

Many business units of the organization use different operating systems to serve niche customers, but ultimately these transactions should be consolidated into a single billing or reporting system.

Lessons from the Front Lines

The advances in ERP modernization, agile supply chain transformation, and adaptive billing systems within such organizations have had profound impacts during the pandemic, directly empowering the entire U.S. healthcare ecosystem to respond rapidly and effectively in a time of crisis. By enabling seamless order fulfillment, real-time allocation of essential medical products, and continuous, risk-mitigated software deployment even in periods of extreme disruption, these developments helped ensure that frontline providers received critical medicines and supplies when they were needed most. This level of operational resilience and adaptability not only safeguarded patient care amid unprecedented uncertainty but also underscored the vital role that innovative technology and process excellence play in the public health infrastructure, ultimately benefiting millions across the nation.
What becomes clear is that technical modernization is inseparable from a transformation in organizational mindset. Success is not just about adopting the right tools; it also requires cross-functional collaboration—from developers to business partners—to harness automation and agility for critical missions.

Disclaimer/Declaration

The views, opinions, and analysis presented in this webinar are solely my own and do not represent the views of any past, present, or future affiliations, employers, or organizations associated with me. The content shared is based on publicly available information and is provided for informational and educational purposes only. While care has been taken in compiling the material, I make no claim of ownership over third-party content, and any copyrights remain with their respective holders.