Improving Efficiency in the Healthcare Supply Chain

healthcare supply chain

Supply chain management is more than just a series of transactions; it is a valuable, strategic business process.

Change is inevitable, and, in healthcare supply chain, it is crucial. The most progressive healthcare organizations across the country now acknowledge that supply chain management is more than just a series of transactions; it is a valuable, strategic business process.

These organizations have researched this expanding avenue to improve their services and cut costs, leading to new supply chain strategies for the coming year. But many in this industry hesitate to accept the evolving role of healthcare’s supply chain and the value it holds. They fail to utilize the data or act upon it, and this carries a cost for both the organization and their patients.

And costs are a rising concern. It is estimated that healthcare costs nationwide will reach $4.8 trillion by 2021, according to the Centers for Medicare & Medicaid Services. Supply chain inefficiencies could be a contributing factor, but optimizing logistics provides a remedy.

The Force of Data Awakens

It is a pretty simple concept: The more you know, the better your decisions. As the healthcare industry continues to evolve, data has been crucial in helping organizations pinpoint ways to cut costs, improve patient care, and end wasteful methodology. And according to a Supply Chain Digital report, the vast majority of healthcare organizations have yet to tap into the full potential of the complex data available to them.

The power to improve efficiencies in a healthcare organization can be found through:

  • Recognizing the supply chain is a powerful force of change: Supply chain management and analytics are no longer after-thoughts. Once their value across an organization is realized, those focused on strategy and cost-effective measures will consider tomorrow’s supply chain of great importance.
  • Seeking more data with greater detail and complexity: As organizations gather more data — and that data becomes more granular, down to patients and their outcomes — in-depth analysis will achieve an unprecedented understanding of where real value is hidden throughout all departments.
  • Allowing the supply chain to guide consistency in care: Everyone benefits from standardization and consistent care, especially the patients. Tapping into the valuable data from the supply chain and using it to determine the best pricing and treatment strategies for the best outcomes for patients is a key component. All of this will encourage inefficient and wasteful processes be eliminated, saving time and money.
  • Implementation of product scanning, electronic ordering, order accuracy controls: Healthcare providers, distributors, and manufacturers have been challenged by an unacceptable amount of errors in the procurement of medical devices and treatment supplies, according to Inbound Logistics. Old systems requiring a manual ordering process can result in ordering errors, product shortages, or the delivery of products that are incorrect or even expired. Improving efficiency in the healthcare supply chain facilitates the elimination of costly errors and supports higher standards of patient care.
  • Aligning physicians with the value of supply chain data: A partnership must be formed between the supply chain and physicians to target more efficient processes for their patients and to seek supply chain guidance regarding product price points, alternatives, and outcomes.
  • Utilizing analytics to improve service and reliability: Healthcare supply chain data will be leveraged for predictive analytics. Essentially, supply chain professionals will use data to better predict and respond to products needed with greater speed and less instances of delays in service. Knowing these inventory challenges ahead of time also enables providers to seek alternatives if a product is discontinued or backordered.

There is an awakening in the healthcare industry as more organizations realize that their strategic business plans can be guided and improved by a myriad of complex supply chain data available. Across the healthcare continuum, there is a demand to look at business from a new perspective, seeking innovative methods to reduce costs and improve patient care.

This is achievable when healthcare organizations and their supply chain providers form an alliance, based on mutual goals and incentives, to leverage more analytical data to improve both patient care and operational efficiencies.


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