Health Care Risk Advisor Newsletter – Building a Better Supply Chain

Building a Better Supply Chain

The coronavirus pandemic exposed serious issues with health care supply chains—supply chains that tend to be complex. The health care industry uses five different categories of products, each of which has its own distinct supply chain (e.g., pharmaceuticals, personal protective equipment (PPE), medical devices, medical supplies and blood). The failure of any of these chains could damage the health care system.

The health care industry hopes to rebuild its supply chain organization by learning from other industries, such as the technology and automaker industries. This includes improving supply chain transparency and applying a dual sourcing strategy that adds redundancy, all without interrupting already established networks.

By rebuilding its supply chains, the five health care product groups would benefit as follows:

• Pharmaceuticals: Improved traceability, resiliency and responsiveness
• PPE: Increased emergency stockpile that keeps inventory fresh
• Medical devices: Improved product design and judiciously relaxed regulations from a more agile supply chain
• Medical supplies: Enhanced supply redundancy and contingency plans
• Blood: Decentralized collection, and centralized storage and distribution for variable demand

Through a better understanding of supply chain risks, the health care industry can form new collaborations with diverse geographies and sourcing materials. And although the industry may see marginally higher direct costs, the health care supply chains will ultimately be more flexible, responsive and scalable, allowing organizations to meet customer demands more quickly. To ensure optimal performance, health care providers should analyze their supply chains to safeguard their ability to deliver quality care when needed.