In the healthcare industry, where patient wellbeing is paramount and life-saving resources are critical, supply chain management is a crucial component of business success. However, healthcare supply chains have become increasingly complex and the events of the past few years have highlighted their vulnerabilities.
So, how do you build resilience in your healthcare supply chain? We explore the challenges to healthcare supply chain management while shedding light on the strategies, innovations and technologies driving sustainable change.
The challenges of healthcare supply chain management
A supply chain is a network of organisations, people and resources involved in producing, distributing and delivering goods or services. In healthcare, supply chain management includes many stakeholders, such as manufacturers, importers, suppliers, healthcare providers, regulatory bodies, government and private services and shipping and transport partners.
The vulnerabilities of supply chains worldwide were highlighted during the COVID-19 pandemic and health policymakers were left searching for quick and practical solutions. For health practitioners, the shortage of consumables, stock and equipment was frustrating and damaging to their business and potentially dangerous for staff and patients. The events of the past few years have highlighted why supply chain management is so important in healthcare organisations.
For Australian healthcare providers, it’s even more complex. Domestic availability of medical supplies in Australia is limited, which means the nation is at the end of a lengthy and complex chain for most of its supplies.
Tim Bowring, Octet’s Head of Sales, Health, has seen the effect on the ground. “For example, we went through a period from the end of the pandemic until very recently where if you ordered, say, a dental chair, it could take six months before it arrived in the country.
“We also saw items such as X-ray machines and specialist equipment to perform surgeries greatly impacted. It led to the largest suppliers having to open bigger warehouses, forecast demand for stock over a long period and then pre-order and store it all here on shore.”
How to build resilience in a health supply chain
While no healthcare provider or supplier can control global disruptions such as pandemics, diplomatic tensions and wars, there are many actions they can take to manage supply chain issues in healthcare and build resilience. Here are our top picks.
Utilising automation and data analytics
“Resilience often comes down to how you manage your stock,” says Tim. “So ordering the right amount of stock, being efficient in your stock usage and having accurate forecasting models for how much stock you’re going to need are all critical areas.”
That’s where data analytics comes in. Important information, such as how to streamline processes, reduce costs and minimise errors, can be obtained by collecting, interpreting and analysing data.
Robotic automation can help with packing orders, while sensors and cameras can be used for quality control. Warehouse management, logistics scheduling, data sharing, processing orders and returns can all be automated.
Focussing on stakeholder engagement
The most effective supply chain leaders align their goals with key stakeholders, encouraging collaboration to achieve the best outcomes and minimise costs. It’s also essential for those involved in healthcare supply chain management to align their business values (in areas including ESG, growth or customer service) with the supply outcomes (such as fulfilment and introduction of new products) to ensure success.
Undertaking risk and resiliency planning
While the pandemic put healthcare supply chains into reaction mode, supply chain managers are now considering longer-term strategies. They are prioritising building resiliency into their supply chains over cost savings by investing in systems to mitigate risk. These might include programs to plan for and respond to disruptions in the supply chain or building monitoring tools to track critical supplies.
The more visibility a health supply chain manager has, the easier it is to build resilience. Clear visibility using a system for tracking supplies, for example, helps highlight potential blockages and allows an organisation to get a more accurate picture of clinical and non-clinical supplies. Forming close relationships with both local and global suppliers and distributors also helps increase visibility and accountability.
Developing protocols for internal teams
Throughout the healthcare supply chain, it’s important for leaders to develop tools and enhance capabilities in their teams to increase crisis preparedness. A clear framework for managing supply chain challenges allows teams to more efficiently manage any blockages.
How Octet can help streamline healthcare cash flow
“For practitioners, if equipment breaks down and they can’t use it, that’s downtime in the practice,” Tim says. “The longer it takes to replace it, the greater the impact on the practice’s ability to treat patients and its revenue. It’s therefore vital that a supplier has access to extra stock at short notice. The large, multinational suppliers have the ability to bring stock onshore. But SME suppliers need more support.”
That’s why a reliable finance partner is a must for healthcare businesses. Working capital solutions can mitigate vulnerabilities and unlock opportunities in the global health supply chain.
“With Octet, you can increase your purchasing power and use that to negotiate early settlement discounts. You’ll be able to hold or order stock without needing your customers to pay upfront. We also give you the ability to offer your customers longer terms or repayment plans to make yourself more competitive.”
There are many options to strengthen your healthcare supply chain with Octet:
- Enjoy up to 60 days interest-free and 120-day repayment terms with our Trade Finance facility. This convenient line of credit allows you to pay local and international suppliers securely and efficiently.
- Access unpaid business invoices for a fast and efficient cash flow injection. We can help you convert up to 85% of outstanding invoices with our Debtor Finance facility — all without the need for personal asset security.
- Streamline and track every stage of your supply chain process with our innovative Supply Chain Accelerate. This fast and flexible solution pays 100% of your supplier invoices instantly while you have up to 90 days to repay. That way your suppliers get paid while you enjoy an extension on your terms.
Strengthen your healthcare supply chain with Octet
Understanding your healthcare supply chain and applying strategies to strengthen and safeguard your network is critical for business success. You need a working capital and payments acceleration partner who can support sustainable business growth. Contact our team of healthcare finance specialists to find out what Octet can do to help power your healthcare business’s growth today.
Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.