Healthcare industry must break away from traditional supply chains, consultancy says

26 June 2015

Healthcare firms need to move away from a one-size-fits-all mindset for supply chains, according to a consultancy.

Crimson & Co said although healthcare firms are gradually understanding the importance of employing effective supply chains, they must be prepared to break with tradition with existing suppliers.

Rob Baker, Crimson & Co principal, said supplier engagement in the healthcare industry is traditionally very focused on service and product cost. He suggested this mindset needs to change in favour of a much more holistic view of value across their supply chains.

“The healthcare industry relies on the success of its supply chains when it comes to ensuring effective product and service delivery, however, by adopting a one-size-fits-all approach, it has led to mounting complexity and inflexibility for those firms, ultimately impinging on their success," he said.

Baker added consumer demands and product portfolios were becoming more complex ramping up the volatility in the supply chain process. Quality assurance standards are also putting more pressure on manufacturers, distributors and the NHS. He added firms needed to consider the impact on existing supply chains of the increasing need for NHS patients to be treated at home.

“To unlock the success from healthcare supply chains, there needs to be buy-in from all the necessary stakeholders collaborating, understanding and communicating, regarding how best to manage the challenges in product and service demand, and breaking away from traditional supply chain models,” said Baker.

He suggested stakeholders plan the end-to-end inventory more efficiently, with the support of tools that include vendor managed inventory and materials management, to manage the process of stock supply. Tailoring supply chain processes to product and customer type through product segmentation will allow stakeholders to decrease complexities and increase traceability in the supply chain, he added.

Baker concluded healthcare supply chains also need to benchmark their performance against other sectors. “Adapting supply chain processes to these changing demands will enable them to achieve better product and service delivery to ultimately support the success of the healthcare industry,” he said.

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