With an increasing number of risks associated with the supply chain management for the health industry, it is more important than ever that leaders take an integrated, data-driven approach.
With issues such as compliance, the impact on patient safety and visibility to consider, it may come as a surprise to those outside the sector that much of the health industry’s supply chain is still reliant on manual processes.
In most cases manual activity is not cost-effective or efficient. For healthcare supply chains, the impact this has on product tracking also carries security and safety risks.
The question is: how can today’s healthcare leaders reinvent their supply chains to offer greater standardisation and efficiency that delivers safer, more cost-effective benefits for patients?
Key problems arising from limited digitalisation
Although digital technologies are being adopted by healthcare providers around the world, the rate of adoption is slow. Results like those below indicate the impact this can have on patient care.
- One study of acute care hospitals in England, Wales, Northern Ireland and Ireland highlighted the potential for slow reactions to problems: ‘over half of the responding hospitals did not have 76–100% of medicine lines fulfilled within 8 weeks of a disruption in the supply chain’.
- The difficulty in tracing recipients of faulty PIP breast implants in 2010 is another case in point; 50,000 British women received faulty implants that were more likely to rupture, but a lack of records created problems in alerting these patients.
- A lack of standardisation and shared record-keeping also result in issues in the procurement process. The Health sectors budgets have been strained unnecessarily in the past by price discrepancies, with separate negotiations meaning trusts paid radically different prices (one paying 35p for a 12-pack of gloves and another paying £16.47).
How technology can change attitudes and improve processes
The new capabilities offered by digital technology not only stand to improve healthcare supply chain processes but also impact attitudes surrounding them.
Research by the US based SMI group suggests that some busy clinicians order stock based on what might be needed, rather than a systematic record of use-by dates, actual volumes consumed etc. More accurate, efficient systems would allow customers to reduce costs, delays and potential shortages; these problems could be replaced with data-driven thinking.
New digital technologies allow the possibility of predicting supply chain issues. Connecting devices via the Internet of Things could allow supply to be automatically monitored by systems that communicate with each other. Automatic re-ordering would mean that required items are re-stocked before demand becomes critical.
Then there is blockchain, heralded as a revolution in visibility and security. Its centralised digital records cannot be altered, making it easier to guarantee quality and authenticity. Blockchain’s simple and secure sharing of documentation removes the need for complex paper trails and could help standardise procurement. It would also aid collaboration, so vital in this industry.
The current climate is a golden opportunity to convince decision-makers to invest in revamped processes. Although new systems would require investment to set up, IBM has suggested that blockchain technology could save the logistics industry $38 billion a year.
Key takeaways for the health industry’s supply chains
The health industry supply chain’s reliance on manual processes is outdated; now is the time to think about how you can future proof it.
What technology and digitisation offer is the chance for healthcare supply chains to become more cost effective. Using data to analyse the health of the chain itself reveals where there are inefficiencies that could be better managed. Sharing information throughout the chain would make it less fragmented and better integrated.
As we’ve seen with GPOs in America, integration – especially centralised supply chain management – means big savings and better purchasing decisions. For the NHS, better supply chain integration would allow it to purchase with the increased negotiating strength of a large organisation, rather than as individual trusts. There is also a strong case for putting supply chain management in the hands of experts focussed on data-driven efficiency, rather than seeing this as an unwelcome distraction from patient care.
Discussion of healthcare supply chains can often seem obsessive about spending, but only labour costs surpass those of the supply chain in this industry. A truly data-driven approach would mean huge potential savings, but also better service and increased patient safety afforded by better visibility and more streamlined practices.