The Rise of the Demand-Driven Healthcare Supply Chain: What Logistics Managers Should Know

As the needs of patients and healthcare facilities have evolved, the healthcare supply chain has undergone some major changes in the past few years. One trend that is only likely to accelerate in the coming years is the shift away from stockpiling and toward a more agile, demand-driven approach to ordering.

Here’s what shippers need to know about this trend—and some steps they can take to prepare.

Stockpiling has proven harmful and inefficient

For non-perishable materials and those that have far-off expiration dates, it was once common for departments to order in bulk and squirrel supplies away for when they were needed. But this had unwanted consequences: supply closets became cluttered and unmanageable, forcing busy nurses to spend hours every week managing supplies. And since some of this equipment was never ultimately used, facilities not only wasted resources in purchasing it, but in storing it, too.

Recent events led to even more stockpiling—creating new and even more troubling problems. In the midst of a global pandemic, some facilities were left facing supply chain shortages and critically low supplies of essential materials, while others acquired a surplus. And with fewer elective surgeries taking place, other materials that had previously been bought in bulk were left sitting in supply closets gathering dust.

For many, these events have been something of a wake-up call. Healthcare facilities are recognizing that they need to be open to making smaller, more frequent orders—meaning shippers will need to prioritize agile, reliable service if they want to keep their business.

Expiration dates are growing shorter

The trend away from small molecule drugs and toward biologics and other complex, large-molecule pharmaceuticals is also forcing healthcare facilities to think more strategically about when and how often to order stock.

Since these modern drugs tend to be more unstable and sensitive to external conditions, they typically have shorter shelf lives and require significantly more stringent storage conditions. As a result, overstocking can lead to costly waste, making it imperative that departments order just enough to meet short-term patient needs and no more.

Of course, supply shortages can cause just as many problems, sometimes even resulting in canceled procedures, and patients left waiting for the care they need. This means that purchasers will demand more from shippers—more control and visibility into the temperature of vehicles, more peace of mind around safety and compliance, and more precision and efficiency when it comes to delivery slots.

Supporting a demand-driven healthcare supply chain

The shift toward a demand-driven healthcare supply chain puts more pressure on shippers. Here are a few steps logistics managers can take to prepare—and continue exceeding clients’ expectations:

  • Develop a robust list of trusted carriers to ensure shorter lead times can always be accommodated
  • Ensure carriers with cold chain and cryogenic capabilities can accommodate increasingly complex shipping needs
  • Take advantage of less-than-truckload (LTL) shipping options to reduce transportation costs for smaller orders
  • Utilize a high-quality transportation management system (TMS) to rapidly identify optimal freight options
  • Stay on top of supply chain data to improve forecasting and identify opportunities to increase efficiency

CTSI-Global is strategically positioned to help shippers in the healthcare and life sciences space optimize their supply chains and adapt to a demand-driven market. Reach out to us today to discuss your needs.

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