Healthcare Supply Chain Metrics
Leaders at the most forward-thinking hospitals and clinics are taking a more sophisticated approach to supply chain management, using analytics and other innovative technologies and tools to improve demand planning and inventory management. As part of that, organizations are collecting and tracking healthcare supply chain metrics to assess the performance of health system, hospital, and pharmacy supply chains.
They are using healthcare supply chain metrics to expose and eliminate inefficiencies and assess their supply chain improvement and optimization efforts. Greater use of supply chain data analytics in the healthcare sector is helping providers better serve their patients and better protect the safety of their staff while reducing waste and enhancing the efficiency and responsiveness of the supply network they depend on.
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The use of healthcare supply chain metrics
Healthcare supply chain metrics are tracked and monitored using KPI dashboards, automated supply chain management systems, and analytic tools. They help supply chain leaders at hospitals, retail pharmacies, medical supply manufacturers, and other participants in the global healthcare value chain evaluate the performance of their supply chains. They make it easier for organizations to:
- Set goals for and assess the impact of their supply chain strategy and improvement efforts.
- Better analyze the relationships between different supply chain functions.
- Spur discussion among stakeholders about how to better align different goals and drive effective change across the organization.
- Benchmark the performance of their supply chains against that of their competitors or leading firms in other industries.
- Demonstrate to their shareholders, stakeholders, and clients the level of operational excellence being achieved.
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Examples of healthcare supply chain metrics
Supply chain metrics can be categorized by supply chain function and type of indicator. The main functions being measured include supplier performance, procurement, sourcing and contracting, inventory management, logistics management, and distribution. The indicator types include quality, time duration, cost, and productivity.
In the case of healthcare supply chain metrics, for example, the following set of metrics can be used to evaluate the performance of the sourcing function: Shipping Accuracy Rate (a quality metric), On-Time Delivery Rate (a time duration metric), Total Supply Cost (a cost metric), and Supplier Fill Rate (a productivity metric). Another example would be the following metrics which are used to assess the inventory management function: Inventory Accuracy Rate (a quality metric), Order Turnaround Time (a time duration metric), Inventory Holding Cost (a cost metric), and Inventory Velocity (a productivity metric).
In the case of hospital supply chain metrics, some typical KPIs include Inventory Turns, Efficiency in Clinical Supply Spend, Internal Requisition and Order Fill Percentage Rate, and Supplier Fill Rate. Healthcare supply chain metrics are used to measure the performance—or the quality, time duration, cost, and productivity—of supply chain operations, but also to set targets for improving the efficiency, responsiveness, and resilience of supply chains.
Going beyond healthcare supply chain metrics
Collecting and tracking metrics is not enough to build true resilience. To achieve a truly efficient, agile, and resilient supply chain, firms must leverage more sophisticated healthcare supply chain technology that can provide them with broad visibility across their supply network and tools that help them communicate and share data and actionable insights with their supply partners.
To ensure that patients and the healthcare providers that serve them have the medications and medical supplies they need when and where they need them, supply chain leaders should leverage healthcare supply chain analytics tools, collaborative tools such as multienterprise work management software, cloud-based networking technology like the digital supply network, and other digital supply chain technologies. These can be used to streamline and accelerate supply chain processes, increase supply chain visibility, facilitate collaboration, and improve product and supply availability. All of these activities contribute to greater supply chain resiliency and improved patient outcomes.
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The digitalized healthcare supply chain network
TraceLink's digital network platform is a cloud-based digital supply network that allows supply partners in the healthcare sector to manage compliance and share data, healthcare supply chain metrics, and detailed information about events happening across the healthcare value chain. TraceLink provides organizations with greater supply chain visibility and innovative solutions for managing work with supply network partners.
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Healthcare Supply Chain Metrics FAQs
What are healthcare supply chain metrics?
Healthcare supply chain metrics help organizations measure, track, and assess the performance of various supply chain functions in the healthcare sector. These functions include supplier performance, procurement, sourcing and contracting, inventory management, logistics management, and distribution. They also help healthcare providers and other players in the healthcare value chain improve the efficiency and resilience of their supply chains.
How are supply chain metrics used in the healthcare sector?
Health systems, retail pharmacies, and other players in the healthcare sector use these metrics to improve performance and eliminate supply chain inefficiencies. They help organizations expose areas in need of attention and opportunities for optimization
What are healthcare supply chain metrics important?
Healthcare supply chain metrics are important because they enable healthcare systems and other participants in the healthcare supply chain set clear performance objectives while ensuring the efficiency and resilience across supply chain processes. This helps them ensure that their customers, patients, or clinicians get the products, medicines, or medical supplies they need when and where they need them while maintaining a high level of supply chain efficiency and agility.