To
see how challenging healthcare and medical device supply chain logistics are
becoming, just watch consumer-targeted television ads for new medicine and
medical equipment. The plethora of direct-to-consumer advertising for products
from the latest prescription drugs and supplements to medical devices,
highlights growth in products entering the marketplace.
For
manufacturers and the logistical teams bringing products to markets and
consumers, the challenge is expected to grow. Across the healthcare sector,
profit margins are thinning as insurers and Medicare reduce reimbursements and
buyers seek greater discounts.
Meanwhile,
expenses are anticipated to increase with the implementation of various
regulations, including elements of the Affordable Care Act.
Medical
device and general healthcare organization supply chain demands are growing
more complex with each passing year. This includes healthcare providers who
must keep costs in check while needing to deliver an ever-increasing number of
products. One analysis by McKinsey found that over the previous five years, the
number of SKUs per packaging line in the healthcare marketplace has increased
by 50% (“Building New Strengths in Healthcare Supply Chain,” 2013).
Faced
with these issues, improved supply chain management can reduce cost-related
issues facing the healthcare industry. Alternative logistics solutions can
include technology, just-in-time delivery and warehousing, as well as novel and
flexible logistics solutions and partnerships with logistics vendors dedicated
to helping customers seek out best-in-class solutions. Together, these can help
companies across the healthcare spectrum heighten performance, reduce costs,
and ensure elevated levels of customer service and patient care.
Supply
chain performance improvement allows medical device makers to address current
issues and implement longer-term, strategic benefits, McKinsey reported. Such
efforts reduce costs by reducing manufacturing lead times, cutting inventory
levels, and even eliminating some product obsolescence, the company wrote.
Supply chain optimization also can improve access and reduce drug shortages,
increase product safety by thwarting intrusion of counterfeit products into the
system, and even reduce medication errors, the company noted.
“Our
analysis suggests that the healthcare sector can improve its margins by tens of
billions of dollars and improve patient safety by making supply chain
improvements,” the report stated.
Where
can other improvements be achieved across the supply chain?
Start
by reducing waste and duplication in the supply chain, including warehousing.
This can be achieved through consolidation of shipments where possible,
reduction of waypoints or touch points from origin to destination, contracting
multi-tenant warehousing opportunities to share related costs and reduce
unnecessary and inefficient space utilization, and introduction of just-in-time
inventory management to further reduce storage costs.
Additionally,
outsourcing where possible and turning to experts and third-party logistics
providers where necessary can introduce innovative thinking to the organization
and maximize opportunities previously not considered.
Ultimately,
the goal of any logistics customer, provider and/or partner organization should
be to infuse the practice and culture of operational improvement across the
organization.
Today’s
medical device and general healthcare supply chain will face continued and
increasingly complex demands for delivering products to market, while keeping
costs in check. Use of the latest solutions and the realization that a
cultural, even creative shift may be necessary can help healthcare companies
realize improved efficiency and reduced costs in healthcare supply chain
logistics.
To
learn more, download our white paper “Eliminating Waste in Healthcare Supply
Chains” and learn how implementing LEAN can help you improve your healthcare
and medical supply chain.
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See more at: http://blog.ryder.com/2015/02/improve-efficiency-cut-costs-healthcare-supply-chain/#sthash.tGcyE2Eb.dpuf