The importance of supply change management continues to increase for the healthcare sector, owing to the challenges it faces with proper distribution and time-bound fulfillment. Members of the healthcare industry adopt supply chain management for the promise of reductions in cost and manpower while gaining help tracking inventory to avoid waste.
How does Supply Chain works?
It generally refers to all the resources needed to deliver goods and services to a consumer. In the healthcare domain, it obtains a complicated form since there are multiple stakeholders including organizations, employees, insurance agencies, manufacturers, hospitals, providers, group purchasing organizations, regulatory agencies and more. An ideal supply chain includes obtaining the right resources, managing supplies, delivering goods and services to providers and patients.
Creating a sustainable supply chain will promote efficiency in the healthcare sector for hospital management. This, in turn, can substantially reduce the costs across entities. Supply chain management creates a way to maintain upstream and downstream relationships with suppliers and customers, providing the organization the best in the market at low costs. The challenge, however, lies in hospitals to align the supply chain to the care delivery model.
The efficiency of the supply chain is gauged starting with the first level, i.e. from the quality check that is involved in the manufacturing process of healthcare essentials. The items, once produced, are sent to the distribution center. Then, depending on the type of product, hospitals authorize inventory purchases directly from the manufacturer or from the distributor. Another stakeholder could be a group purchasing organization, which enters into an agreement with a manufacturer on behalf of the hospital.
The Value that Supply Chain Management Bestows
Most hospitals fail to implement an effective supply chain management system, either owing to their lack of knowledge or due to the misconception that it is not required.
However, that is far from reality. Without supply chain management, healthcare providers can lose track of the inventory of items used on a regular basis. Instruments such as pacemakers, defibrillators and catheters may get piled up on shelves long past their expiration dates. A proper supply chain can cut such unnecessary costs and ensure that the stored goods are used optimally without being wasted.
Secondly, any efficient supply chain system can ensure that stakeholders of a healthcare system- manufacturers, suppliers, and distributors communicate cohesively. This will help to eliminate the most common supply chain costs like clinical hoarding, drug diversion, upgrades and repairs, nonstandard ordering methods, unnecessary stockpiling and more.
The New Supply Chain Mantra
Hospitals are quickly realizing the necessity to move their focus from product and price reduction to concentrating on a larger supply chain picture. A clear and concise supply chain management system will bring value to healthcare systems. From pricing accuracy to transparency and communication, the dissemination of actionable data to revenue cycle accountability can be disciplined with a fully functioning supply chain management system. Hospitals are now driven by the way their patients see or judge their services. With the increase of value-based reimbursements and exchanges, hospitals now have a dual responsibility of providing the best for their patients while maintaining their own revenues. Supply chain management can easily gauge the loopholes in a service provider and the way it functions.
AI and Automation in Supply Chain Management
Imagine a scenario where a healthcare provider has to rely on their memory or search medical history files to retrieve information of a recurring patient’s data. It is not just time consuming but a potential risk that could affect long term revenue.
This is only possible with the implementation of data analytics and automation tools that make supply chain management easier. While it requires patient records to be maintained and curated in order, it also ensures that patients get the on-time care they need.
Supply Chain Management, Big Data and a Social Cause
An adaptable supply chain management system can also contribute to a social cause of donation. Hospitals, when aware of their stockpiles and their capacities, can always opt to transfer the surplus to areas in need. With more accurate data on hand, pharmaceutical manufacturers can cut their costs by tapping the discounted market.
Big Data and RFID technologies are the latest entrants in the healthcare supply chain management systems that make information actionable. Every organization looks to ensure that Big Data helps them increase patient outcomes, improve and reduce cycle time for manufacturing and managing the inventory.
Supply Chain Management is the only way to mend the broken links in the present healthcare system. It will ensure that the right products are delivered at the right time to the right places. Furthermore, continuous investment in automation and data analytics will ensure greater transparency and reliability on the health sector.