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. (more…)
The food and beverage industry faces a lengthy list of unique challenges in terms of logistics and supply chain management, right from volatile commodity pricing and inventory management to quality and safety requirements combined with frequent new product introductions, high demand uncertainty, complex manufacturing constraints, and perishability. The need for inventory optimization in the food and beverage industry is growing due to the increase in customer demand, expanding product portfolios, and lengthening supply chains.
Inefficient inventory management in the food and beverage industry results in spoilage of products, resulting in bad supply chain management. This results in poor decision making at all the levels of the supply chain. This leads to a vicious cycle, ultimately reducing sales, profit margins, and customer loyalty.
At SpendEdge, we understand the impact of better warehouse management on supply chain management. And to help companies strive in the competitive food and beverage industry, our experts have highlighted some of the major challenges that they must be aware of and prepare themselves for accordingly.
When it comes to supply chain risk management planning, a risk can be defined as a broad spectrum of events, from counterfeit products, natural disasters, supplier delay, to theft, part shortages, production interruptions, and even cybersecurity. Every business has a different array of potential risks depending on its verticals, and each of its product has a different risk portfolio depending on its components. The product lifecycle is influenced by an incredible number of variables. Therefore, a comprehensive supply chain risk management planning is required, and many companies, today, are embarking on the journey to reduce the overall negative impact on the bottom line and effectively deal with unexpected hiccups. For companies that don’t have supply chain risk management plans, their primary objective should be to discover the largest risks and figure out strategies to deal with them. In this article, we have discussed some next-level best practices that can push supply chain risk management plans to another level of value and consistency.
Best Practices for Supply Chain Risk Management
Best Practice #1: Site checks must be performed
There are certain kinds of issues in supply chain risk management that can only be discovered with routine, in-depth personal visits, and an understanding of the culture where production occurs. The routine site visits are one of the most impactful methods of not only identifying supply chain risk but also help in developing contingency plans. Undoubtedly, this can be expensive and time-consuming in the case of a supply chain that reaches overseas, but the outcome can be enormous. This is one of the best practices which ensures that if there are any concerns with unsafe working conditions or quality, the companies can immediately take the necessary steps to revise their risk quantification.
Best Practice #2: Don’t neglect cyber threats
Risks are not always physical but virtual too. There are many stakeholders when it comes to supply chain risk management who assume that supply chain risks come from physical challenges, such as delay in production and shortages, but this is short-sighted. Every supply chain is built on top of IT, whether it is a bill of materials shared between the company and the third-party suppliers, or CAD designs comprising proprietary, patented designs. Therefore, for a better supply chain risk management, companies need to roll cybersecurity risk into the overall supply chain roadmap and prioritize them higher than several physical risks.
Best Practice #3: Ease out supply chain risk with insurance
Insurance companies specialize in risk quantification and working with someone can help procurement companies in their process of putting together proper contingency plans. Some insurance policies cover the own production of the company, such as a custom-built and expensive piece of equipment that would cost millions and take weeks to replace. Therefore, this best practice in supply chain risk management can enable the company to recoup many of the costs involved in case of a critical failure. There are also other insurance policies that cover issues upstream, such as delay in the supply of parts from overseas suppliers. In either case, insurance can never make up for damage to a brand, but it can help lessen the sting of a major supply chain disruption, both in-house and the other side of the globe.
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Globally, the quality of health care services has improved a lot over the past few years. Today, the researchers have found solutions for many diseases that had no cure or could not be treated earlier. Such improvements in health care quality are primarily because of the immense growth in healthcare procurement processes that include segments like clinical research and medical equipment procurement. Despite the strong growth of the healthcare services industry, the suppliers in this sector are facing numerous procurement challenges. In this article, we have listed down some of those challenges that you must know if you are a healthcare organization. But before exploring those challenges, let’s understand a bit about procurement.
Supply chain management in healthcare is a very fragmented and complex process. Management of healthcare supply chain involves gathering resources, managing supplies, and delivering goods and services to patients and providers. The physical goods and information about medical products and services have to pass through several independent stakeholders like insurance companies, manufacturers, providers, hospitals, group purchasing organizations, and several regulatory agencies before the completion of the supply management process. But before diving straight into the process, let’s try to understand supply chain management in simple terms.
What is supply chain management?
Supply chain management is the process of managing supply chain activities to maximize the value of a customer and acquire a sustainable competitive advantage. It reflects a serious and conscious effort by the supply chain firms towards developing and running supply chains effectively & efficiently. Supply chain activities involve processes ranging from product development, production, sourcing, and logistics. It also includes information systems that coordinate these activities.
Healthcare Supply Chain Management Trends
#1. Standardization of patient care
Standardization of care is a very crucial instrument to make healthcare sustainable, especially from the perspective of a patient. Healthcare supply chain management will pave the way for this instrument. The supply chain sits on the valuable cluster of data that can help in determining not only the best price but also the best results in the healthcare industry. It will help in changing slow, inefficient, and wasteful processes involved in the process of healthcare.
#2. Increase in use of data and advanced analytics
Big data and advanced analytics are benefiting supply chain management. The growing need for forecasting supply chain outcomes is one of the driving forces behind the increasing need for reliable data. This is one of the popular trends that is emerging in healthcare supply chain management. The use of advanced analytics helps in identifying:
- Benchmarks of supply chain performance
- Integration of clinical data with supply chain data
- Transparency of data across the supply chain
Data is crucial for improving quality, cost, and outcomes and helps providers and suppliers to take an informed and strategic approach to supply chain management. Advanced analytics is not only improving the supply chain itself but is also crucial for analyzing the outcomes. It also helps in making decisions about cutting the cost and savings initiatives. Moreover, cloud computing is also helping healthcare become an industry driven by data. Access to the valuable data leveraged by certain software like PREDICT facilitates supply chain teams to aggregate purchases across several types of projects and hospitals to minimize costs.
#3. Innovation caused by changing population health
The health of the population is changing every day, and this is one of the major trends driving innovation in healthcare supply chain management. Increasing chronic health issues is creating a more patient-centric supply chain and is leading to an environment where care can be provided as and when patients need it. This trend is going to make healthcare delivery and supply chain management more integrated.
#4. Clinically integrated supply chain management
A clinically-integrated supply chain plays a very crucial role in the success of the healthcare industry. Clinicians and supply chain professionals work in synchronization, share their ideas, compare outcomes and make informed decisions. Physicians are maintaining a relationship with supply chain professionals to avail a better guidance on price points, results, and alternatives. With the role of automation, there is a decrease in the order errors by suppliers and cost providers that they commit through inaccurate payments, invoices, and products. The providers and suppliers with the help of an automated process can catch discrepancies in no time and address issues in real time.
By promoting efficiency in the healthcare supply chain management, physicians and hospitals can create cost-reducing opportunities across their organization.
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