Market Overview
Supply Chain Management market in Healthcare is expected to grow at a CAGR of more than 10% by 2025, mainly driven by ever-increasing demand due to COVID-19 pandemic.
The healthcare supply chain is the most complex and fragmented among all industry sectors because healthcare is the only industry not dependent on demand and supply. It deals with the collection of essential goods and some life-saving products, including vaccines, medicines, surgical items, and medical equipment.
Supply chain management is one of healthcare service providers' largest expensive business functions. The Association for Healthcare Resource & Materials Management predicted supply chain costs would surpass labour costs for the number one position by the end of 2020. Also, in the recent pandemic, healthcare service providers are facing an exponentially increasing number of cases and a shortage of medical supplies. The primary reason for this breakdown is the over-dependency on traditional supply chain management methods and a lack of awareness about the emerging ways to deal with such a crisis.
For healthcare services providers, it is their priority to look for emerging technologies and methods for managing their supply chains efficiently. According to a study by Navigant Consulting, hospitals could save an average of 17.7 per cent or $11 million per hospital annually by streamlining and standardising their supply chain processes.
Impact of COVID-19 on Healthcare Supply Chain
The recent COVID-19 pandemic has exposed various flaws in the supply chain across the healthcare sector. With the ever-increasing demand for medical supplies, hospitals and governments could not meet the demand for PPE kits, gloves, oxygen supplies, ventilator machines, other essential goods, and patient services. Most governments and healthcare service providers cannot maintain the financial stability to manage their supply chains.
This situation has helped healthcare leaders and hospital networks realise the importance of innovation and alternative ways of working towards supply chain management. They have also started looking to drive the supply chain to achieve cost and operational efficiency. As we advance, their primary focus would be to –
- Develop a more efficient procurement process to manage such pandemic situations.
- Reduce costs to achieve decreased revenue.
- Achieve more visibility into the inventory across the healthcare value chain.
- Use of advanced technologies to gain better tracking and traceability and to reduce risks
- Get faster distribution with minimal costs and reach the maximum population possible in case of vaccination.
This can be achieved only using emerging technologies, including IoT, Blockchain, Big Data Analytics, Cloud Computing, and AI/ML. Many governments have started their developments in this direction. An example of such actions is the Government of India, which launched the AarogyaPath platform in June 2020. It is a web-based solution for the healthcare supply chain portal. It will provide real-time availability of critical healthcare supplies for manufacturers, customers, and suppliers. The integrated public platform will provide single-point availability of essential healthcare goods, which will be helpful to customers in tackling several routine issues. With time, analytics of this platform has been expected to generate early signals to manufacturers on looming shortages or over capacity.
Impact of Emerging Technologies on Healthcare Supply Chain
The most effective solution to manage the complex and fragmented healthcare supply chain is using emerging technologies. Technology is pivotal in providing advanced planning, synchronisation, and collaboration across the supply chain process. Creating advanced technology in the healthcare supply chain has been driving efficiency and helping contain costs while improving quality and care. Some emerging technologies that impact the healthcare SCM include Intelligent AI and Analytics, the Internet of Things (IoT), Blockchain, and 3D Printing.
Artificial Intelligence and Analytics
AI is used in areas such as decision support for traditional inventory management. It has changed how healthcare providers used to manage, interpret and analyse the data they collect from various sources. Also, data analytics has shifted from descriptive to predictive and prescriptive analytics, which allows them to predict future events and decide the next course of action based on that intelligence.
Internet of Things (IoT)
IoT devices' sensors measure things such as location, movement, temperature, humidity, and many other factors. The prominent feature of IoT-based decision-making is the ability to get quick and frequent feedback. Due to the automated collection and instantaneous data sharing, an IoT-controlled system can take several small actions, measure outcomes, obtain feedback, and make corrections based on the input.
Blockchain
The immutability of Blockchain or Distributed Ledger Technology (DLT) enables healthcare providers to track and trace supplies efficiently and securely. It helps in preventing delays and any possible fraud. Blockchain provides product traceability across the value chain – from the raw material provider to OEMs or manufacturers to the hospitals and healthcare providers with detailed information about every step, without any risk of data tampering or fraud.
3D Printing
Earlier, customers had to wait weeks and months for their products to be manufactured and delivered to their doorstep. Still, with the help of 3D printing technology, it is possible to produce the required products in mass, which is also with personalisation. Healthcare is one of the emerging sectors that has adopted 3D printing technology for various surgical items, and it has seen an increasing adoption during the pandemic. 3D printing technology will help streamline the supply chain across the healthcare value chain with mass production for quality care.
