Healthcare supply chain innovation slows, experts urge renewed focus
ARIZONA, UNITED STATES — The healthcare industry, which rapidly embraced innovative solutions to navigate unprecedented supply chain challenges amid COVID-19, is now experiencing a slowdown in innovation.
Eugene Schneller, a professor of supply chain management at Arizona State University’s W. P. Carey School of Business, highlighted this trend during a recent interview with the Association of National Account Executives (ANAE).
Pandemic-driven innovation surge
Critical supply shortages and rising costs during the height of the pandemic spurred supply chain teams to adopt creative procurement strategies, expand supplier relationships, and accelerate the modernization and digitization of supply chain operations.
These efforts were crucial in maintaining the flow of essential medical supplies and equipment when global supply chains were severely disrupted.
However, Schneller noted that progress has slowed as the immediate pressures of the pandemic have eased.
“When the pressure’s off, you don’t pay as much attention to those as you did in the past. Notably, we still don’t have provider systems that have resilience in their mission statements or as part of their governance processes,” Schneller remarked.
Collaboration and transparency challenges
The pandemic necessitated a high level of collaboration and transparency between suppliers and providers. Schneller emphasized the importance of sustaining these partnerships.
“Much sharing of data happened during COVID. When the crisis goes away, how do we sustain collaboration? Putting governance structures in place to assure access to and equitable allocation of critical products is important,” he said.
Rising costs and strategic sourcing
The healthcare supply chain continues to grapple with rising costs. Mergers and acquisitions across healthcare systems have not mitigated the escalating supply expenses.
Schneller pointed out that hospital management views the growing costs for supplies as a significant area for potential savings. While value-based purchasing could reduce costs, its implementation is still in the early stages.
The evolving role of group purchasing organizations
Group purchasing organizations (GPOs) have been pivotal in navigating post-pandemic challenges by leveraging technology and innovation.
They have shifted focus to local production, adequate inventories, and improved transparency.
By employing data analysis and AI, GPOs have enhanced their forecasting capabilities, preventing drug shortages and supply disruptions.
Future outlook
The healthcare supply chain must continue to evolve to address ongoing challenges and capitalize on opportunities for innovation.
Sustaining the collaborative efforts and transparency established during the pandemic will be crucial in building a resilient and efficient supply chain that can withstand future disruptions.
