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  August 25th, 2023 | Written by

The Role of Supply Chain Management in Improving Access to Healthcare

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Today, the healthcare industry faces many obstacles to providing fair and impartial access to medical provisions and assets. The management of supply chains plays a pivotal part in ensuring that essential medical supplies, devices, and medications reach those requiring them the most, irrespective of their geographical location.

By effectively implementing strategies for supply chain management, medical practitioners can enhance the accessibility and affordability of healthcare goods, no matter where they are situated.

The Importance of the Supply Chain Management in Healthcare

The efficiency of our healthcare system depends mainly on the effectiveness of its supply chain management. By creating strategic and well-planned supply chain networks, medical providers can lower costs, limit waste, and enhance the availability of crucial medical products.

Below are some of the benefits that an effective supply chain management system can bring to healthcare providers:

Improved Patient Outcomes

An indispensable benefit of implementing supply chain management in healthcare is the improvement of patient outcomes. A streamlined management approach guarantees that healthcare providers always have sufficient crucial medical devices, drugs, and supplies necessary for optimal care. 

This continuous availability of medical resources ensures that patients receive prompt and effective treatments, leading to better outcomes.

Cost Reduction

Well-executed supply chain management has the potential to decrease healthcare expenditures significantly. By effectively managing the supply chain, medical professionals can eradicate the need to stock a surplus of medical supplies to meet patients’ needs. This greener approach reduces waste and, ultimately, lowers healthcare costs.

Improved Efficiency

Efficient supply chain management is pivotal to improving efficiency in healthcare organizations. This helps ensure that medical supplies are always accessible when required, giving healthcare providers ample time to focus on providing top-notch patient care. 

Moreover, a well-functioning supply chain reduces the wait times for various medical services, improving patient satisfaction significantly.

Compliance and Regulations

Healthcare organizations are pressured to comply with increasingly stringent regulations and legislation. Effective supply chain management enables healthcare providers to comply with regulations. 

It helps them track the precise location of their medical supplies, monitor inventory levels, ensure that medical supplies are not expired, and manage supply shortages and recalls.

Distribution and Delivery Management

Effective supply chain management also ensures that medical supplies are effectively distributed within the healthcare facility. This management reduces the potential for mix-ups that could lead to misdiagnosis, the wrong dosage of medicine, or operating on incorrect surgical procedures. It also allows for secure handling, storage, and transportation procedures.

How Does a Healthcare Supply Chain Work?

The healthcare supply chain starts with identifying the resource needs of healthcare facilities. This can include anything from medical devices, pharmaceuticals, and surgical supplies, to linen and patient gowns. 

Once the needs have been identified, the next step is to source vendors and distributors that meet the facility’s quantity, quality, and timing requirements. This process involves negotiating contracts, assessing vendor or distributor capabilities and reliability, and managing supplier relationships.

Once suppliers have been identified, the healthcare supply chain focuses on coordinating the shipment of goods. This means managing the transportation and logistics of all the equipment and supplies from the vendors or distributors to the medical facility. 

In addition, the healthcare supply chain also aims to optimize the delivery process to ensure that goods are delivered on time and in good condition.

One critical aspect of the healthcare supply chain is maintaining regulatory compliance standards. Medical facilities must adhere to strict regulations around supply chain management to ensure the safety and efficacy of medical equipment and medications. 

This can include providing proper storage, tracking the expiration dates of drugs, and verifying compliance with environmental sustainability standards.

Recent Challenges in Healthcare Supply Chains

The healthcare sector has faced numerous challenges in recent years, significantly impacting supply chain management. Below are some of the biggest challenges:

Supply Shortages

Healthcare supply chains face a pressing challenge: the scarcity of vital medical supplies, equipment, and medications. This issue is further compounded by global occurrences like pandemics, geopolitical tensions, and natural disasters, which disrupt manufacturing and distribution processes. 

The negative impact of supply shortages on patient care is profound, especially on those who depend on life-saving treatments and drugs.

Longer Lead Times

Longer lead times have also become a significant concern in healthcare supply chains, resulting from increased demand, production bottlenecks, and logistical disruptions. Extended lead times can hinder healthcare providers’ ability to maintain adequate inventory levels, potentially causing delays in treatment and negatively impacting patient outcomes.

Heavy Shipment Spending

With the growth of global trade and complexities in distribution networks, healthcare organizations are confronted with heavy shipment spending. In addition, factors such as fluctuating fuel prices, transportation capacity constraints, and compliance with international regulations also contribute to increased shipping costs. 

These added expenses can strain healthcare budgets, ultimately affecting the affordability of care for patients.

Lack of Visibility Across Complex Distribution Networks

Healthcare supply chains often involve multiple stakeholders and span various geographical locations, making maintaining visibility throughout the entire process challenging. This lack of transparency can lead to inefficiencies, increased risk of errors, and reverse logistics issues, particularly regarding product recalls. 

In addition, inadequate visibility into the supply chain can impede the ability to make informed, data-driven decisions and hinder collaboration among different parties involved.

How Healthcare Supply Chains Can Improve Their Efficiency

To ensure the safety and efficacy of medical equipment and medications, healthcare supply chains need to be optimized. Here are some of the most effective ways that organizations can improve their efficiency:

Adopt a Patient-First Mindset

The first step in improving efficiency in healthcare supply chains is to adopt a patient-first mindset. By putting patients at the center of your supply chain management, you can ensure that all inventory, equipment, and materials are available when and where needed. 

Accurate forecasting, inventory tracking, and demand planning are critical. By managing all aspects of the supply chain with the patient in mind, you can better manage inventory and delivery schedules, reducing delays and wait times for critical materials.

Use Automation and Advanced Inventory Tracking

Advanced inventory-tracking technologies and automated systems could help increase efficiency in healthcare supply chains. Automation can streamline processes, improve inventory management accuracy, and reduce human errors. 

Keeping track of all supplies through an advanced inventory management system simplifies the methods of obtaining and restocking vital products, making them both more accessible and more accurate.

Prioritize Forecasting and Demand Planning

Forecasting and demand planning are vital in ensuring that all the necessary materials are available when needed. This involves understanding current and future trends and developing accurate estimates of demand. 

By forecasting and demand planning, the supply chain can be adjusted to meet the healthcare facility’s needs. This can reduce supply chain lag time, saving time and money to lessen the burden on the healthcare provider.

Establish End-to-End Security Protocols

Due to frequent cyber-attacks, the healthcare industry needs to prioritize developing complete security protocols for its technologies and systems. This includes implementing security measures across all equipment, technology, and data to safeguard patient confidentiality and prevent theft and tampering. 

In addition, maintaining a secure supply chain is crucial for the effectiveness and security of the healthcare supply chain network.

Keeping Our Healthcare Supply Chains Efficient Long-Term

To maintain efficient healthcare supply chains in the long term, staying up-to-date on industry trends and technological advancements is critical.

By employing a patient-centric approach and implementing supply chain optimization strategies, healthcare organizations can guarantee that their supply chains are operating at peak efficiency now and in the future.

Author Bio

David is CEO of DB Schenker North America, a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the North America region, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centers.