The healthcare sector has changed rapidly over the last decade. Companies of today are striving to align themselves to rapidly changing markets as the production of pharmaceutical and medical devices is getting increasingly complex. Also, due to the rapid global economic growth, the demand for affordable and effective healthcare products has increased substantially, especially in emerging economies. Improving the performance of the healthcare supply chain won’t just help companies address issues but will also provide numerous strategic benefits. First, it will reduce costs by shortening lead time and decreasing inventory levels across the value chain; and, second, it will improve access by reducing drug and device shortages in developed markets.

Our experts suggest that companies operating in the healthcare sector can improve their margins by billions of dollars and enhance patient safety by improving supply chain processes. Therefore, in this blog, we examine the key benefits of an efficient healthcare supply chain.

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What is Healthcare Supply Chain?

The supply chain usually refers to the resource needed for delivering good and services to patients. Healthcare supply chain management involves managing, obtaining resources, managing supplies, and delivering goods and services to providers and patients. By improving healthcare supply chain management throughout the organization, companies can easily identify cost-reduction opportunities.

Benefits of Healthcare Supply Chain Management

Reduce Costs

While the healthcare industry has its own set of challenges, it can learn quite a lot from other industries. For instance, the fast moving consumer goods company (FMCG) industry is approximately a couple of decades ahead in terms of supply chain capabilities. Our studies pertaining to healthcare supply chain management show that the industry can make substantial improvements. Pharmaceutical and hospital supply chains can allow manufacturers, distributors, and pharmacies to carry significantly smaller inventories. Moreover, healthcare supply chain management has the potential to make pharmaceutical products and medical devices affordable to more people.

Improve Access

Today’s healthcare supply chains have serious implications on human health. Even in developed countries like the US, which does not face such challenges, drug shortages have tripled over the last 10 years. As a result, providers have started paying over 10% for products experiencing shortages, accounting for more than billions of dollars in additional costs for hospitals worldwide.

Improving access to patients in emerging markets will improve their health and well-being and provide new growth opportunities for companies who are facing challenges boosting revenues at home. Our experts estimate that medical products revenues in emerging markets will cross over $300 million by 2020; whereas, pharmaceutical sales will cross over $700 billion for the same period. Even in developed economies, better healthcare supply chain management can increase access to short supply products and act as a revenue accelerator for the healthcare sector.

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Enhance Safety

Supply chain security breaches are on the rise, threatening patient safety. Countries with the highest risk of counterfeiting tend to be the fastest-growing pharmaceutical markets. The consequences of breaches include injuries, ineffective therapy, and increased drug resistance due to substandard medications – ultimately reducing people’s trust in the healthcare system.

Improving healthcare supply chain management capabilities is extremely important for boosting patient safety. There are numerous other examples of technologies and process changes delivering real benefits today. For example, computerized drug trolleys are improving patient safety and hospital supply chain management around the world. 

A robust healthcare supply chain management process can help you boost patient safety. Get in touch with our experts to know how we can help you achieve substantial savings.