Healthcare supply chain issues refer to challenges and problems that can arise within a complex system. These can be responsible for procuring, managing, and distributing medical products, equipment, and services in the healthcare industry
Understanding the ongoing demands of the customers (quantity, quality, market trends), manufacturing capabilities, and time taken to deliver goods and services plays a crucial role in healthcare supply chain issues. It is one of the most important aspects of any business and accounts for an average of 8-10% of overall business costs.
1. What Is The Current Healthcare Supply Chain Disruption?
The COVID outbreak in China in 2019, Russia’s war with Ukraine, and the downfalling economies of developed and developing countries following that have affected every business aspect including manufacturing, and healthcare supply chain disruption. China is the biggest manufacturer in the world and has a 28.7% share of the market in manufacturing. Regarding COVID, China has imposed stringent rules on global exports and imports, which has significantly increased manufacturing costs & time.
Russia holds 4.8% of the world’s oil reserves. The ongoing war situation has changed its oil export policies and has massively impacted logistical problems in healthcare and supply chains globally. The chaotic times have increased supply chain costs by 4.2% worldwide.
The healthcare sector has witnessed more strains than any other industry as the supply chain costs have evidently increased by 13% and went up to 37.3% of patient care. Healthcare supply chain issues are more complex, involving numerous stakeholders, perishable goods, and life-saving tools that demand swift delivery. Research suggests that if mishandled, healthcare supply chain challenges can last up to a year and account for 40% of operational costs in hospitals and labs.
2. How Healthcare Supply Chain Challenges Are Processed Differently Than Others?
In healthcare, the supply chain is mainly related to inventories and services required in laboratories and hospitals. The process requires gaining resources, managing suppliers, and delivering goods and services to both providers and patients. Managing healthcare supply chain problems becomes increasingly complex. Medical products, services, and information involve various stakeholders: manufacturers, group purchasing organizations, providers, hospitals, insurers, and regulatory agencies.
Every stakeholder has different interests which increases complexities. Let’s take the example of medicines. Patients will sometimes expect specific medicines because they have heard or read something online. Healthcare supply chain challenges arise from varying expectations among stakeholders in the medical field. Medical professionals and doctors, due to their specialized training, have specific preferences for drugs and equipment. Manufacturers streamline mass production, finance examines expenses, and regulators prioritize quality and compliance. This complexity in priorities makes the process of choosing the right medicine or equipment for the supply chain a challenging undertaking, contributing to healthcare supply chain issues.
3. 3 Most Common Healthcare Supply Chain Management Challenges
I. Incomplete & Lack Of Data About Demand
Understanding patient behavior and patterns has been a constant challenge in healthcare. The rise of diseases like COVID-19, dengue, malaria, etc. makes it more difficult. During periods of healthcare supply chain disruption, the surge in the volume of patients, variety of diseases, and treatment options escalates significantly. Managing comprehensive data on all these aspects becomes a daunting challenge. Inadequate or absent data further exacerbates the intricacies of the healthcare supply chain issues.
Without comprehensive insights into total inventory consumption, service utilization, and patient health data, identifying the erratic patterns within the volatile market becomes a challenging task, intensifying healthcare logistics challenges. Manufacturers, in particular, face difficulties in allocating resources and optimizing production due to the absence of analytical data. The lack of clear demand data further compounds the complexities within the supply chain.
If we consider the example of drugs, as per the Researchgate report, the average time observed from the preparation of an indent to receipt of a drug is 162 days. A manufacturing process takes about 117 days, and distribution takes about 47 days. Manufacturing takes 4 times more time than distribution. Both manufacturing and supply chains are hampered due to the lack of visibility about demand & supplies. The total period has now increased to 213 days since the healthcare supply chain issues.
II. Manual Errors
Maintaining the data integrity of supplies throughout the supply chain is a prerequisite yet cumbersome. Around 67% of laboratories have reported more than a 3% loss of revenue due to error-prone manual data handling regarding supplies. The lack of a skilled workforce is a primary reason behind this healthcare supply chain shortage.
III. Financial Leakages
In the healthcare supply chain, there are typically multiple distributor networks. Here a single product can be distributed by multiple suppliers, and a single distributor can offer various products. Managing accurate supplier and financial data within this intricate web can be particularly challenging, especially in the context of healthcare supply chain shortages. Within the healthcare supply chain, employees often engage in manual data entry. Due to the repetitive and interconnected nature of this process, errors are almost inevitable. Moreover, numerous discrepancies can go unnoticed, given that it span multiple departments and requires various approvals, contributing to healthcare supply chain problems.
Allocating & managing finances with such data can affect every workflow and result in unnecessary costs. Supply chain issues in healthcare industry are primarily seen in multi-center enterprises because there isn’t much centralized procurement that can improve operations and decrease cash leakages.
Simplify Lab Inventory Operations With Crelio Inventory
4. Adaptable Healthcare Supply Chain Solutions To Tackle Issues
I. For Hospitals:
The emergence of cloud and software-based solutions has come to the rescue in these testing times. Multiple innovative solutions for healthcare supply chain problems have unleashed the power of data. By implementing these healthcare supply chain solutions, respective organizations can efficiently store, manage, and optimize their data within a unified platform, thereby addressing healthcare supply chain shortages more effectively. It allows them to understand demands and streamline all operations including the supply chain. The majority, approximately 92 percent, of digital advancements in healthcare have primarily targeted hospitals. This includes innovations like Hospital Information Management Systems (HIMS), specialized finance management software, and other cutting-edge technologies aimed at addressing healthcare supply chain problems.
II. For Medical Laboratories:
Innovations in the healthcare industry have predominantly focused on hospitals, with laboratories being relatively less explored. However, there are a few emerging healthcare supply chain solutions tailored specifically for laboratories that have the potential to alleviate supply chain issues in healthcare industry.
One of them is Crelio Inventory, a leading cloud-based solution. It is a HIPAA, GDPR, SOC II & ISO compliant medical laboratory software for inventory management issues in healthcare supply chains including medical laboratories.
III. Complete Visibility:
The Crelio healthcare supply chain management software, designed for inventory control, offers a comprehensive view of inventory consumption and patterns. This tool empowers laboratories to gain insight into rising demands and make real-time supply management decisions, effectively addressing healthcare supply chain problems. With centralized procurement, multi-centers can order, manage, and deliver stocks from parent locations. The dashboard in the system shows near-expiry and below-alert-level stocks of the inventory at regular intervals. In addition, it displays overall wastage. Streamlining demands and supply with these details is easy and hassle-free.
Read More: How to improve inventory data management to prevent leakages
IV. Automation
The system also includes an automated stock consumption feature. This is particularly valuable for medical laboratories looking to streamline their inventory management issues in healthcare supply chains based on tests and departments. For instance, if the pathology department consistently consumes a specific quantity of inventory within a defined timeframe, Crelio Inventory will log this data and apply it in the future. Such lab automation systems further address logistical problems in healthcare. Similarly, when laboratories perform certain tests and use similar inventory every time, they can make decisions for average consumption in a specific scenario for the lab. Effective management of supply purchases can pave the way for minimal to zero wastage in the future. Further, aiding healthcare organizations in optimizing their inventory planning and mitigating healthcare logistics challenges for cost efficiency.
V. Stock Analysis
Capital allocation or budgeting can be easy with its stock analysis feature. It enables lab owners to analyze their opening stock, consumption, and purchase patterns, simplifying capital allocation without hassle or inaccuracy.
Supply chain management has been displayed in tackling supply chain issues in healthcare industry with traditional methods. In an ever-expanding and demanding market, the sole viable approach to sustaining and thriving is the adoption of revolutionary digital innovations. This offers security, configurability, and easy accessibility, thus addressing healthcare logistics challenges effectively.
Conclusion
Overcoming the healthcare supply chain shortages is a multifaceted challenge that requires a comprehensive approach. Further encompassing strategic planning, technological integration, and robust collaboration among stakeholders. The recent logistical problems in healthcare have highlighted the vulnerabilities within the system, necessitating a shift towards more resilient and adaptable supply chain models. By leveraging advanced healthcare supply chain solutions and technologies such as artificial intelligence, blockchain, and IoT, healthcare organizations can enhance visibility, streamline operations, and ensure the timely delivery of critical supplies.
Furthermore, fostering strong partnerships and open communication channels among manufacturers, distributors, healthcare providers, and regulatory bodies is crucial for mitigating risks and improving responsiveness to future crises. Ultimately, by embracing innovation and fostering a culture of continuous improvement, the healthcare sector can build a more robust and efficient supply chain, ensuring the uninterrupted delivery of essential services and improving patient outcomes.
References:
How hospitals can manage supply shortage as demand surges
Exploring the role of supply chain management in healthcare
Average turnaround time from supplies to customers
