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    Blog Image

    Achieving Supply Chain Transparency in Health Care Industry

    • The health care industry is evolving fast with newer regulations, drugs and disease patterns challenging the traditional supply chain management systems.
    • There is an elevated importance of supply chain management in health care to be more flexible, integrated and have transparency.
    • Supply chain transparency enables healthcare and healthcare supply chain companies to manage inventory, sourcing and distribution better.

    July 11, 2022 | Supply Chain Strategy

    Over the last couple of years, the health care industry has seen significant changes in terms of new regulations, procurement, logistics and distribution. The market uncertainties, led by the COVID-19 pandemic, have further made many sets of the supply chain obsolete, with the need for a complete overhaul of the health care supply chain and its management.

    Unlike earlier, wherein the health care supply chain had no scope to adapt to short-term demands and changes in the industry, today there is an elevated importance of supply chain management in health care to be more flexible, integrated and have transparency.

    What Supply Chain Transparency in Health Care Really Means?

    Supply chain transparency requires companies in the health care industry to be well versed with the changes in the external and internal environment. Moreover, healthcare companies must take a strategic call to meet the changing demands of the market.

    The health care supply chain is complex as it manages a wide variety of drugs, portfolios, markets and outsourced setups. Hence, it is imperative to leapfrog towards a smarter, transparent and agile supply chain management system that takes into account all the aspects that impact or can impact the health care supply chain and the overall healthcare sector.

    Supply chain transparency enables health care and health care supply chain companies to manage inventory, sourcing and distribution better. It allows them to plan, procure and produce as per the real-time data and demand analysis, saving on costs and making the process efficient.

    Supply Chain Transparency Definition And Examples

    In simple terms, supply chain transparency can be defined as a two-way communication pathway involving each stakeholder in seamlessly delivering healthcare products and services. It involves backward and forward integration by health care companies to gain better control over the value chain of the market they operate in and to serve their customers well.

    For instance, during the COVID-19 pandemic, health care companies had to maintain a clear supply chain transparency with the governments regarding the procurement, process and readiness of the vaccine for the population. It also involved transparency in terms of delivery, distribution and pricing, while also making sure that the quality is not impacted, and the supply chain is foolproof without any glitches and wastage.

    Path Toward Supply Chain Transparency Solutions

    To set on the path towards supply chain transparency solutions, health care companies need to take the following aspects into consideration:

    1. Complexity of the Portfolio:

    Since each drug and its treatment involves a set of protocols such as temperature sensitivity and time, it is important to look at a resilient supply chain management system that is adaptive to the portfolio requirements and transparent.

    2. Stringent Regulations:

    Healthcare industry products and services are regulated items and face stringent penalties in case of any anomalies. Therefore, it is key to have a supply chain management system that adheres to the rule of the land and makes necessary changes to the process to fit into the land of operation.

    3. Geopolitical Uncertainties:

    Global uncertainties such as geopolitical tensions and the pandemic have a direct impact on the supply chain system. It is vital to design and implement a supply chain management system based on the formula of fast responsive management.

    Some of the imperative transparency solutions required in the supply chain management of health care include:

    1. A Well-connected Environment:

    A well-connected environment is imperative in today’s time for not just transparency but for the entire function of the supply chain management in health care. This means all the stakeholders involved in the process should be connected via smart technologies for real-time access to inventory, manufacturing, distribution and supply of raw materials. This would enable them to predict and prepare well for the potential and real demand.

    2. Digitalization:

    Moving the processes from paper to paperless is one key step in making the supply chain in healthcare robust, responsive and agile. It would make the supply chain management in health care more effective and optimized in terms of cost and efficiency. Using new-age technologies such as IoT, machine learning, and artificial intelligence (AI) would enable health care companies to benefit extensively in handling the complex nature of the supply chain.

    3. Robust Planning:

    A robust supply chain planning would provide a window toward pre-empting and preparing for known and unknown risks. Effective planning would involve a seamless functioning of the business activities such as procurement, supply chain, finance and sales.

    Benefits of supply chain transparency

    1. Effective Inventory Management:

    Smart customer data collection and better supply chain visibility would help health care companies plan their inventory more effectively and smartly, keeping an eye on the market pulse.

    2. Tailored Health Care Supply Chain Solutions:

    Insights on the market, demand patterns and raw material availability can help health care companies tailor unique supply chain management solutions for each category of products.

    3. Customer Centricity:

    With the shift in disease patterns and more generic drugs in the market, it is crucial for health care companies to adopt a customer-centric approach and not focus on the hospitals, governments and pharmacies alone. The transparency in the supply chain management in healthcare would allow companies to cater to all sets of customers effectively and efficiently.

    Adopting Supply Chain Transparency Software to Manage Risks

    Given the length and breadth of the health care supply chain, adopting the right software platform to prioritise and mitigate risks is crucial. A platform with a source-to-pay integrated platform for spend analysis, sourcing, contract and supplier management, project management and tracking will enable health care companies to manage their complex supply chain smartly and effectively.

    Conclusion

    While the importance of the supply chain and its digital transformation remains sacrosanct across businesses, its urgency in health care is at higher levels due to the nature of business and its impact on human life.

    The health care industry is evolving fast with newer regulations, drugs and disease patterns challenging the traditional supply chain management systems. Reinventing the healthcare supply chain would require a higher focus on technology, software and a complete shift in the decision pyramid.

    FAQ

    What is the main goal of supply chain transparency?

    The main goal of supply chain transparency is to know what is happening in the internal and external environment and communicate it effectively among all stakeholders.

    How to prioritize supply chain transparency?

    Some of the steps to prioritize supply chain transparency include

    1. Identify and prioritize the risks
    2. Visualize the risks
    3. Use transparency levers to fill gaps in the information through third-party data analysis
    4. Actively monitor suppliers with transparency data tools

    What is supply chain transparency software?

    Supply chain transparency software enables transparency, streamlines connectivity and improves efficiency in the supply chain management system. The digitalization of the supply chain leads to better control of costs and working of the supply chain levers.

     

    Tags: life sciences , supply chain

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