A set of core traits can align your supply chain with the demands of the healthcare industry.
Minimizing inventory and improving efficiency — that’s how companies in most industries control supply chain costs. Missing a few sales is less important than keeping inventory under control.
But the concept of “too much inventory” loses its relevance when people’s lives depend on product availability
That’s a key reason why healthcare supply companies have historically focused on developing new products, manufacturing them safely and reliably and creating demand for them in the marketplace, not micromanaging supply chain costs.
When new products make it through the cost and complexity of development and regulatory approval, the No. 1 rule has been to get them into the hands of practitioners and patients — and never run out.
“The No. 1 rule has been to get new products into the hands of practitioners and patients.”
But priorities are shifting as the healthcare supply chain becomes more complex, with a rapidly evolving channel and distribution network and every country in the world part of the overall ecosystem of production and consumption.
Ongoing macroeconomic and regulatory events are constantly changing the shape of the competitive and operational environment in which supply chain managers make their strategic and tactical decisions.
With a goal of improving and extending lives for 7 billion people, limiting healthcare’s cost to society has become top of mind.
And that’s why leadership and shareholders now expect healthcare companies to balance product availability with cost management.
This, in turn, pushes efficiency and effectiveness in operational execution and logistics higher up the management priority list.
But there is good news: High-performing companies can improve performance and increase efficiency by using a set of core disciplines to align their supply chain with the demands of the healthcare industry:
They view the supply chain as a strategic asset to their company and align it with the overall business strategy.They develop an end-to-end process architecture through practices integrated across the entire supply chain. They are deliberate in designing their organization for performance, designating supply chain executives as key members of the C-suite and building and maintaining the skills needed for long-term success. They build an effective model for collaboration, leveraging a wide range of partnerships for maximum strategic and financial benefit while understanding and protecting core competencies. They use metrics to drive success by making performance of critical supply chain processes highly visible and actionable.
They regularly examine the overall health of their supply chain assets and infrastructure to identify gaps and make adjustments.
As healthcare products become more complex and valuable, while traveling to every corner of the globe, it becomes increasingly clear that healthcare supply chains deserve even more attention.
They are, after all, not only strategic assets, but also key to maximizing efficiency, minimizing cost and protecting the lifeblood of healthcare companies: their products.
Looking past price
Evaluating the health of your supply chain, whether you do it alone or engage a logistics provider, can be a highly effective way to improve top-line growth.
Moreover, efficient supply chain management can create competitive advantages for companies that prioritize it.
A third-party logistics partner, with expertise developed through a longstanding commitment to the needs of life-sciences companies, should offer insights to healthcare companies and effectively become a valued consultant.
“Limiting healthcare’s cost to society has become top of mind.”
The best logistics providers are constantly working to improve the supply chain. This goes beyond providing a basic service.
Clearly, the future of any healthcare business rests partly on its ability to create a supply chain that surpasses the needs of its customers.
As a result, choosing a logistics partner is one of the most important decisions any business owner will make.
Remember that there are considerations beyond price. This will be a long-term relationship, one that should spark creativity and innovation, and above all else, deliver value that separates your business from the competition.
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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.