Healthcare value chain
The pandemic exposed fundamental issues in the medical supply chains of the US and other nations, but it also served as a catalyst for change, prompting healthcare organizations that struggled with stock outs and shortages to revamp and fortify their supply chains. Those that have weathered the storm successfully have found their supply chains to be a strategic asset. A strong, agile healthcare value chain helps increase profitability and improve patient outcomes, making it a competitive differentiator, particularly in times of crisis.
To transform costly, inefficient healthcare supply chains into robust, resilient healthcare value chains, firms need digital tools that they can use to connect and coordinate efforts across stakeholders. They need technology that fosters knowledge sharing and collaborative endeavors and enables trading partners to work together to drive tangible value for their organizations and the health systems and patients they serve.
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Vulnerabilities in the healthcare value chain
Even before the COVID-19 crisis exploded, healthcare value chains in the US and other countries were highly vulnerable to disruption. The fragility of healthcare supply chains results from a combination of factors, including:
- Continued dependence on cumbersome and error-prone manual tasks
- A lack of responsiveness to sudden changes in demand
- Inadequate redundancy and diversity in sourcing
- Limited coordination and communication among trading partners
- A lack of visibility into healthcare supply chain management, which makes it difficult to track products, forecast demand, and prevent shortages
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Tools and technology used to manage the healthcare value chain
Forward-thinking organizations are leveraging technology to address some of the weaknesses in healthcare value chains. They are using innovative tools and powerful new technology to eliminate or cut down on time-consuming and error-prone manual processes and enhance supply chain management. RFID tagging and smart cabinets, for example, are being used to track assets and streamline and automate inventory management. IoT sensors are being used to feed usage data into healthcare supply chain analytics tools. And advanced analytics software is being used by health systems to track and monitor key healthcare supply chain metrics.
The connected healthcare value chain
One of the most powerful technologies organizations can use to better manage supply chains is the digital supply network, or cloud-based supply chain networking technology that provides users extensive visibility across the end-to-end supply chain. TraceLink's Digital Network Platform, which boasts over 280,000 users, was designed specifically for the healthcare value chain and provides its users with innovative multienterprise work management software that they can use to improve coordination and support cooperation across supply chains.
By facilitating seamless information flows, the digital network platform enables organizations to leverage analytics more broadly, using real-time data from across the supply chain to identify and eliminate bottlenecks early, minimize the impact of upstream disruption, and proactively prevent shortages or delays in the delivery of medications and medical supplies. By fostering collaboration through shared workflows, multienterprise work management applications help firms establish and strengthen strategic partnerships that improve profitability, accelerate innovation, and enhance supply chain resiliency. These two solutions work together in enabling organizations to develop a connected healthcare value chain.
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The future of the healthcare value chain
Forward-thinking health systems are using healthcare supply chain technology to build fully integrated supply chains, encouraging supply chain leaders and clinical teams to work together to reduce costs—to improve the quality of patient care and patient outcomes while also ensuring continuous improvement of supply chain processes in terms of efficiency and responsiveness.
All stakeholders—not just healthcare providers but also drug and medical device manufacturers, distributors, and third-party logistics partners—can now start leveraging digital supply chain networking technology and multienterprise work management tools to build a more patient centric supply chain.
Healthcare Value Chain FAQs
What is a healthcare value chain?
The healthcare value chain is the chain of suppliers, producers, distributors, healthcare providers, and dispensers that provide clinicians with the drugs and supplies they need to care for patients and patients.
What is the difference between a value chain and a supply chain?
The terms "value chain" and "supply chain" are often used interchangeably to refer to the chain or network of entities—materials suppliers, manufacturers, distributors, and retailers—that provides consumers with products, starting with the input of raw materials through production, packaging, and distribution and to the point of consumption.
How has the crisis of COVID-19 affected the healthcare value chain?
COVID-19 revealed both the strengths and weaknesses of healthcare value chains around the world. It has shown healthcare organizations how important coordination and collaboration are in the healthcare value chain. It has brought to light the lack of redundancy and diversity in pharma and medical supply sourcing and an urgent need for increasing digitization in the supply chain. It has also exposed a lack of supply chain visibility, which makes it difficult to track products, accurately forecast demand, and mitigate potential shortages.