3 Steps to Improve Supply Chain Resiliency

Across the healthcare system, supply chain resiliency is the hot topic on executives’ minds within the payer, provider, policymaker, and supplier community. Indeed, with inflation, macroeconomic uncertainty and the war in Ukraine, 90 to 95 percent of executives think they need to focus more on resiliency. This is prompting a dramatic rethinking of the value of lean, globally distributed supply chains. Indeed, efficiency is now being redefined in terms of reliable and resilient supply chains better adapted to emerging geopolitical uncertainties rather than purely based on the lowest cost dynamics. 

At the beginning of the pandemic, it was more about securing PPE supplies, but now there are shortages for a whole range of products. Moreover, when we speak to CEOs of Pharmaceutical/MedTech companies and healthcare organisations, they say that the uncertainty will not disappear anytime soon. Most companies realise that these supply chain issues are not just ephemeral but much more systemic and will require more holistic solutions. Based on some of these conversations and our research into this subject area, below we highlight three strategies to improve supply chain resilience:

• Increase focus on collaboration and partnership across the value chain to improve overall visibility

Recently, we have seen the increasing globalisation of the Pharmaceutical and MedTech supply chains. Now, we may be witnessing the start of a countertrend towards increased localisation and greater emphasis on regional and national self-reliance. The ongoing disruptions and the geopolitical wrangling between countries is contributing to a new emerging consensus among the United States, Europe, and other decision-makers in like-minded countries of the need for more robust and resilient global supply chains. Indeed, a new belief is emerging that we might enter a new era characterised by a “rewiring” or “reinvention” of global capitalism and the supply chains that undergird it. The paradigm appears to be shifting from “just-in-time” to “just-in-case.”

A key challenge in the rewiring effort is to balance the advantages of globally connected innovation and production with the need for improved national and regional resiliency, outcome-driven value-based performance, and environmental sustainability. Vamstar envisions a tectonic shift from the current “fully globalised” supply chain model to a more “hybrid model” balanced across global, regional and local sites. Indeed, the emphasis is being shifted to boost supply chain resilience by establishing “redundant capabilities with multiple suppliers” through a hub-and-spoke model and increasing cooperation with vertically integrated organisations (such as outsourcers, procurement-focused organisations etc.)

All stakeholders will need to work together to develop systems that can provide on-demand and real-time information on the status, condition and location of the products, materials and inventory anywhere around the world at any point in the supply chain journey. Traceability and transparency across the supply chain components will drive the new models of cooperation and engagement. 

• Implementing product-specific strategies and defining the criticality of supplies needed to deliver quality care

Due to ongoing challenges, many healthcare organisations have started to explore and de-couple product-specific strategies to improve supply chain visibility. Across countries, these organisations are involving clinicians and clinical decision-support teams to understand and define what materials are needed for efficient care delivery, the thresholds of the products needed to deliver care, and how best to source these products. 

At a product level, healthcare companies and organisations have to not only forecast and manage primary shortages but also analyse data on the supply chain to predict secondary shortages, for example, when products are tied to disruptions indirectly – a raw material plant shutting down and affecting the manufacturing of products used in operating rooms is an example of a secondary supply shortage. This is where advanced technologies can help healthcare organisations better understand how pandemic, geopolitical, transportation, labour, financial, cybersecurity, and other factors dynamically affect the supply chain.

In the future, it may be possible to predict supply chain disruptions before they happen. With AI, it is possible to develop medical solutions that pinpoint products that become critical in various disruption scenarios and then cross reference equivalent items across a broad network of suppliers without competitive bias and advanced analytics systems for event monitoring. Indeed, at Vamstar, we are using AI to monitor supplier and buyer trends for products across the supply chain and provide support to the industry as an Exchange so as to provide input into the forecasting and procurement processes.  

• Developing system-level compliance with defined processes and governance structures

Resilience is the capability to survive in the face of unexpected challenges, whereas agility depends on companies responding to change with adaptability. For resilience and agility, core processes must be developed with real-time risk measurement, reporting, and mitigation strategies. 

Technology can be a significant enabler. Following the disruptions of 2020, many companies are prioritising technology investments to develop systems that can provide more granularity. Indeed, technology has made it possible to track products through the supply chain and keep communication lines open by providing all nodes with access to real-time information. Healthcare organisations can use IoT, AI and RPA to predict the perfect inventory volumes for their businesses. This way, they avoid overstocking or stockouts while also managing quality delivered items that are easy on delivery schedules. Lastly, people must be empowered to make decisions and collaborate across the value chain to ensure that the technology and processes deliver the correct output. 

At Vamstar, we are committed to partnering with hospitals and health systems across 100+ countries to ensure that with the help of real-time supply chain data and fully interconnected AI-based Exchange services, our hospitals never run out of supplies to ensure timely care delivery. To join our network, please reach out to me directly at praful@vamstar.io or our talented and experienced sourcing and procurement team at buyers@vamstar.io

COVID-19 | Healthcare Supply Chain | Hospital Backlog | Cardiovascular | Cardiac care | Healthcare Data | Artificial Intelligence | Value-Based Procurement | Medical Technology | Procurement Softwares | Machine Learning | Mitigate Supplier Risk | Medical Equipment | Forecasting Models