Delivering quality healthcare requires extensive behind-the-scenes coordination. Nowhere is this more evident than when managing the massive and complex supply chain that underlies every aspect of healthcare, from basic office supplies to sophisticated medical equipment and essential medications. In this low-margin industry, where expenses often rise faster than revenues, healthcare leaders face mounting pressure to lower costs yet maintain high-quality care. Effective supply chain management is a powerful means of achieving both aims.

What Is Supply Chain Management?

Supply chain management (SCM) embraces all activities involved in the design, planning, execution, and management of an organization’s supply chain. For a manufacturer, for example, SCM covers the processes of turning raw materials into finished products, as well as suppliers, logistics providers, distributors, and customers. A professional services firm’s SCM, on the other hand, focuses on sourcing and managing the resources necessary to perform its consulting work. The most efficient supply chain management efforts try to integrate not only the discrete processes along the individual chain, but also the communication with supply chain partners that encourages cooperation up and down the value chain to minimize costs, maximize efficiency, improve quality, and ensure customer satisfaction.

What Is Healthcare Supply Chain Management?

Healthcare supply chain management emphasizes the strategic coordination of procurement and distribution of the goods required to sustain both business operations and the care of patients. Unlike industries that can zero in on a narrower range of related products, a healthcare supply chain needs to account for particularly stringent regulatory and compliance standards and could include everything from pens, laptops, and printing paper to perishable drugs and blood, X-ray machines, and surgical implants. Each healthcare organization must manage a broad network of vendors, processes, systems, and data and ensure that these items are manufactured, delivered, stored, and used so as to advance premium (and cost-effective) care to patients.

Key Takeaways

  • Healthcare organizations need the right products at the right price at the right time to guarantee efficient patient care.
  • Because healthcare organizations require such a wide variety of products, their supply chains tend to be vast and fragmented.
  • The complexity of healthcare supply chains, along with supply chain disruptions, makes management especially challenging.
  • Boosting data accuracy, automating processes, applying lean principles, and standardizing processes are just a few ways healthcare organizations can improve their supply chain management.

Healthcare Supply Chain Management Explained

Healthcare organizations engage an extensive, complex network of suppliers to keep operations running smoothly and deliver quality healthcare services to their patients. This process, known as healthcare supply chain management, aims to minimize costs and treatment delays while maintaining the highest standards of patient care and safety.

This is often easier said than done. A healthcare organization’s supply chain is generally more complex and fragmented than those in other sectors, and to make matters more complicated, its management must take into account several high-stakes, industry-specific challenges, where lives are often on the line. However, the principles of good supply chain management remain largely the same from industry to industry: Even in healthcare, supply chain management encompasses not only oversight of vendors and products but also systems, processes, and data. This includes designing, planning, and managing the supply network, as well as and implementing mechanisms to predict, plan for, and react to possible disruptions or risks.

More specifically, healthcare supply chain management involves several key activities, including:

  • Planning and forecasting demand for supplies, equipment, and medications.
  • Collaborating with administrators and clinicians on product selection and standardization.
  • Procuring and purchasing supplies from manufacturers and distributors.
  • Managing and storing inventory.
  • Distributing supplies to various facilities, departments, and locations.
  • Tracking and managing product usage.
  • Returning, repairing, or disposing of unused or expired items.
  • Conducting quality control and testing of received products.
  • Analyzing supply chain data to identify potential areas for cost savings and other optimization opportunities.
  • Ensuring regulatory compliance as required, related to certain products.
  • Managing relationships with suppliers and group purchasing organizations (GPOs), which aggregate the purchasing volume of multiple healthcare organizations to negotiate better prices, terms, and conditions with suppliers.

Why Is Supply Chain Management Important in the Healthcare Industry?

Healthcare organizations face increasing pressure to deliver high-quality, cost-effective care, despite dealing with lower reimbursements, cash flow issues, and rising expenses. In fact, PwC projects a 7% increase in the cost of treating patients in the United States in 2024, up from a 6% increase in 2023 and 5.5% in 2022. And, like many industries, healthcare has also felt the impact of significant, and more frequent, supply chain disruptions. The COVID-19 pandemic, for instance, exposed major vulnerabilities in the complex, global supply system that healthcare organizations rely on. And given the regulatory complexity, criticality of minimizing supply chain failures, and unique product handling requirements, a problem with a supplier several tiers down the chain can suddenly wreak havoc on many organizations—not to mention patients.

Given these mounting pressures and supply chain vulnerabilities, healthcare supply chain leaders can play a role in boosting operational, financial, and even clinical performance. By implementing more efficient procurement processes, automation through technology like artificial intelligence (AI) and Internet of Things (IoT), stronger supplier relationship management, and better inventory management, among other strategies, organizations can gain deeper insight into their supply network—from immediate suppliers to those several tiers removed. This enhanced visibility, combined with well-integrated data and systems, enables organizations to better monitor inventory levels, anticipate potential issues, enact contingency plans, and quickly respond to changing circumstances.

Healthcare Supply Chain Management Challenges

When healthcare organizations fine-tune their supply chains, they can achieve significant benefits: lower costs, increased revenues, and—most importantly—better care. But there is no shortage of challenges to overcome. According to Premier’s 2024 Supply Chain Resiliency survey, nearly 80% of healthcare providers and 84% of suppliers expect supply chain challenges to worsen or remain the same over the next year.

These issues burden healthcare supply chain teams, providers, and patients. The same survey reveals that more than 67% of providers spend 10 or more hours per week mitigating supply chain challenges and shortages, and nearly 40% had to cancel or reschedule cases at least quarterly in 2023 due to product shortages—potentially putting patients at risk.

These situations, however, are not the only issues healthcare organizations face in managing their supply chains. Other all-too-common healthcare supply chain challenges include:

  • Drug shortages: Medication shortages have always been an issue in healthcare, but they’ve become a persistent and more frequent challenge due to ongoing supply chain disruptions, including global dependencies and demand surges related to pandemics or catastrophes. The U.S. Food and Drug Administration (FDA) notes that while manufacturing quality issues are the major cause of drug shortages, there are other culprits: production holdups, delays in receiving raw materials and components, and barriers to onboarding new suppliers during disruptions. Healthcare organizations that haven’t taken proactive steps to mitigate these risks or diversify their supply chain often must resort to buying more expensive alternatives or maintaining costly backup medication inventory.
  • Lack of system integration: The healthcare industry has seen significant merger and acquisition activity, which often exacerbates existing problems with supply chain system integration. When supply chain data exists in silos across an organization, meaningful analysis becomes difficult and real-time reporting next to impossible. Similarly, without centralized purchasing systems and channels, organizations will find it difficult to maintain companywide visibility into spending and supply chain management. The solution is system integration through linking disparate software applications or by investing in integrated enterprise platforms like cloud ERP. Benefits include greater efficiency, cost savings, business growth support, opportunities to automate processes, and, of course, the ability to make data-driven decisions.
  • ERP system limitations: Healthcare’s inherent complexity creates specific challenges for enterprise resource planning (ERP) implementation, particularly regarding regulatory compliance, data security, privacy rules, and integration with legacy systems and electronic health records software. While ERP software serves as the backbone of supply chain functions, healthcare organizations must ensure that their chosen systems fully support these specialized needs. Inadequate integration can force supply chain teams to manually transfer data between systems, which, in turn, drains resources, introduces errors, and becomes a drag on any attempt at supply chain automation, let alone optimization.
  • Clinical time allocated to inventory management: An inefficient supply chain management function burdens both supply chains and healthcare providers. Poor inventory management, for example, often forces clinical staff to spend valuable time manually tracking and documenting products as they are received, stored, or used. That means that they’re not devoting those hours to their primary role: patient care. The same is true for administrative staff, who may find themselves diverted from improving patient experience to handling supply chain issues.
  • Regulatory and compliance challenges: Healthcare organizations must comply with a number of regulations that can affect their supply chains. The FDA oversees the safety and quality of medical products, which can impact sourcing, storage, and handling, Meanwhile, the data privacy and security regulations mandated by the Health Insurance Portability and Accountability Act (HIPAA) add complexity to supply chain management by requiring healthcare organizations to have comprehensive policies and procedures in place to control vendor representatives’ access to physical facilities, as well as protections to prevent the unauthorized use and disclosure of patients’ electronic protected health information.

15 Best Practices to Improve Healthcare Supply Chain Management

Given the supply chain’s importance to healthcare organizations’ financial and operational performance, as well as patient outcomes, investing in better supply change management is imperative. Opportunities for improvement range from tactical improvements in technology and data to strategic efforts that strengthen supplier relationships and improve agility and responsiveness.

Here are 15 best practices health care organizations can adopt to strengthen supply chain management.

1. Improve Data Quality

Data is fundamental to effective supply chain management. One of the most important actions a healthcare organization can take is to address the quality and completeness of its supply chain data. In the healthcare industry, where inventory updates might still be communicated by phone calls or supply requests sent by fax, organizations should first assess their current data quality to identify areas for improvement. For instance, orders placed by phone might lack standardized product codes, or faxed delivery confirmations might never make it into digital systems—creating gaps in inventory tracking.

This improvement process typically involves several key steps: creating clear data governance frameworks for managing data quality; implementing automated systems for data cleansing and standardization; and establishing continuous improvement practices, like tracking data-quality KPIs and performing periodic data-quality audits.

When healthcare organizations transform their supply chain data into standard digital formats and enforce common data architectures, they open up new opportunities. For instance, with complete, timely, and accurate data, they can perform advanced real-time analysis to readily share information with suppliers and distributors—enabling better coordination and collaboration, while supporting supply chain optimization.

2. Enhance System Integration and Data Sharing

Robust tools are available to help healthcare organizations better manage their supply chains and inventories, as well as the related procurement and payment processes. But these tools are only as effective as the environment in which they’re implemented. Healthcare organizations that want to improve their supply chain management should invest in systems integration and data sharing capabilities that allow for a seamless flow of information across departments, facilities, and external partners.

One straightforward way to do this is to implement an ERP platform with built-in capabilities for supply chain management, inventory management, financial management, and more. Leading platforms also include supplier relationship management functionality that enables greater collaboration and data sharing with vendors and partners, resulting in greater transparency, faster response times to supply chain disruptions, and more efficient procurement processes.

3. Increase Supply Chain Visibility

Supply chain disruptions are a fact of life in many industries, and healthcare is no exception. Increasing visibility across the supply chain—not only internally within the healthcare organization itself but also across its vast network of suppliers and distributors—is essential for managing these disruptions. The more insight the organization has about its own inventory levels, as well as the status of goods being manufactured or shipped, the better equipped it will be to deal with sudden inventory shortages, logistical or manufacturing bottlenecks, backorders, and other issues.

Some solutions include automatic identification and data capture through tools like barcodes and RFID scanners, which can be used to help track inventory movement. Supplier portals and vendor management systems can also provide a more direct line of sight into the production and shipping status of products. Investing in an ERP platform with robust tools for procurement, inventory, ordering, and supplier relationship management is another important step in achieving networkwide transparency, and many of these systems feature built-in vendor management capabilities and supplier portals.

4. Focus on Demand Forecasting and Inventory Management

Demand forecasting helps predict how much of a particular product or service the organization will need during a specific period. The more accurate the demand forecast, the better the organization can align its ordering, preventing both stockouts and excess inventory—each of which carries significant costs. Maintaining a just-right level of inventory ensures that the healthcare organization has what it needs without waste or running out of supplies. This is critical in the healthcare industry, as inventory includes many of the supplies patients and providers depend upon: perishable medications, temperature-sensitive testing equipment, medical devices, and necessary personal protective equipment like gloves and masks.

Once products arrive at a healthcare organization, they need to be managed from the time they are received through storage and actual usage. Investing in inventory management processes and systems improves the efficiency of these activities, from tracking goods on their way to the organization to receiving, inspecting, and replenishing them. The most robust inventory management systems provide real-time visibility into inventory across the organization for better decision-making. This is particularly useful in light of the unique challenges faced by healthcare organizations charged with carefully managing perishable items, like vaccines or blood products, to limit waste and spoilage—all while ensuring necessary volumes are on hand to meet demand.

5. Leverage Technology

Manual supply chain management processes (e.g., handwritten purchase orders, paper requisitions, physical inventory counts, paper-based supply usage recording) are a recipe for errors and inefficiencies in any industry. In the context of a vast and complex healthcare supply chain, digitizing management processes becomes essential for accuracy. By embracing technology, healthcare supply chain leaders can increase efficiency, reduce errors, and leverage advanced analytics and AI capabilities to automate demand forecasting and inventory control.

Centralizing healthcare supply chain data into a cloud-based ERP system can further improve visibility and operational agility by connecting supply chain, procurement, and vendor management capabilities to enable real-time responses to demand shifts. This can help to ensure that precious time and resources aren’t lost wrangling data locked away in siloed systems. What’s more, these systems can scale up or down as the organization grows or contracts, eliminating the need for costly infrastructure changes or system replacements and alleviating growing pains.

6. Automate Processes

Investing in technology opens up opportunities to automate critical supply chain processes to drive greater efficiency, accuracy, and responsiveness. For example, automated data capture allows healthcare organizations to track goods from time of delivery through their use. Automation also frees clinical and administrative staff from performing labor-intensive tracking processes so they can focus on higher-value tasks. Another option is to incorporate IoT devices that feed into an inventory management system to automatically track supply locations, usage patterns, and inventory levels within the healthcare facility, enabling real-time updates and reducing stockouts and overstocks. This real-time tracking can support reordering decisions and inspire process improvements, while reducing errors and boosting worker productivity.

Migrating supply chain data to cloud-based ERP systems further facilitates end-to-end process automation that encompasses inventory management, procurement, order management, logistics, supplier relationship management, financial management, and more. These platforms consolidate data from multiple sources into one accessible hub, enabling healthcare organizations to make faster data-driven decisions, adapt to fluctuations in demand, and streamline workflows. For instance, invoices can be automatically matched against receipts and purchase orders to verify accurate pricing and confirm receipt, reducing payment errors and improving financial oversight.

7. Optimize Network Design and Distribution

Healthcare organizations should analyze their current supply networks to identify bottlenecks and inefficiencies. This involves:

  • Examining the location of suppliers, distribution centers, and healthcare facilities.
  • Evaluating transportation modes and routes.
  • Monitoring inventory levels at various points in the network
  • Reviewing order fulfillment processes.

This study may uncover opportunities to diversify the supplier base, consolidate warehouses or distribution centers, improve inventory management, or rethink transportation strategies to ensure timely delivery of essential supplies, such as medications or medical devices.

Healthcare organizations may also identify a need to work more closely with key suppliers on demand forecasting and inventory planning; implement advanced supply chain technologies, like predictive analytics; or explore last-mile delivery innovations to make sure critical items can reach their destination quickly and securely.

Advanced supply chain analytics and modeling tools can also be leveraged to simulate the effects of different network configurations. Evaluating various trade-offs in costs, service levels, and risk factors, for instance, can help decision-makers identify the network design and distribution strategies that will guarantee the availability of life-saving supplies without delays or shortages.

8. Diversify and Strengthen Supplier Relationships

Supplier relationships are the glue that holds strong supply chains together. Strong, collaborative relationships support a reliable flow of critical materials, make communication easier, and strengthen forecasts—all of which allow for greater flexibility when facing disruptions or shortages. In the healthcare industry, where timely access to supplies like medications, medical equipment, and PPE can directly impact patient care, having robust supplier relationships is especially important. Therefore, investing in supplier relationship management (SRM) is essential.

Robust SRM involves continually monitoring supplier performanceto proactively address and prevent supply chain issues. It also includes investing in select relationships at a higher level to work together on everything from operational and financial improvements to the development of innovative products. This might involve:

  • Setting up longer-term contracts with key, strategic suppliers and developing shared goals.
  • Regular meetings with supplier representatives to discuss challenges, opportunities, and progress.
  • Sharing data on usage patterns, inventory levels, and demand forecasts to help suppliers refine their own processes.
  • Working together on joint product research and development initiatives.

Given healthcare’s unique vulnerability to supply chain disruptions, organizations should consider diversifying their supplier base. For example, a healthcare organization might consider adding more nearshore or nearby suppliers in order to limit the lead times and logistics involved in obtaining the supplies and equipment essential to patient care. It’s also recommended to maintain multiple sources for critical products. Understanding each supplier’s risk factors (geographic location, exposure to natural disasters, manufacturing capabilities, their own supply chain resiliency, etc.) is equally important for limiting a healthcare organization’s own supply chain risk.

9. Build Resilience

The vulnerability of long, lean global supply chains and the value of building supply chain resiliency were hammered home during and in the wake of the COVID-19 pandemic. Supply chain management—once considered largely an unsexy back-office function—was suddenly a topic of discussion on the nightly news and at the evening dinner table.

Building supply chain resilience is particularly important for healthcare organizations preparing for disruptions. 2022 research by the Deloitte Center for Health Solutions, involving interviews with 50 healthcare supply chain leaders, identified two of the most important factors in increasing resilience: organizational commitment and robust, strategic spending. The research also found that the most resilient organizations:

  • Spend time determining the underlying causes of supply chain vulnerabilities.
  • Put in place strong governance and risk management frameworks to manage volatility.
  • Are thoughtful about which digital technologies to implement.

In addition, some ways healthcare organizations can increase their supply chain resilience include:

  • Diversifying their network of supply.
  • Sharing data and increasing communication with suppliers.
  • Implementing systems that provide greater visibility into upstream issues.
  • Mapping key risks and developing scenario plans to deal with them.
  • Investing in a supply chain management dashboard to keep tabs on performance.
  • Regularly assessing and updating supply chain processes in relation to changing conditions.

10. Increase Supply Chain Agility

While resilience helps healthcare supply chains withstand disruptions, agility enables them to quickly respond to unexpected changes in demand or supply chain shocks. Healthcare organizations need to be able to pivot rapidly, whether to secure alternative sources for supplies during shortages or to take dvantage of opportunities to save money as market conditions shift or new suppliers come online.

Agility starts with having access to the data and intelligence that inform these quick decisions. Data analytics and AI technologies can be used to gain insights into inventory levels, pricing fluctuations, demand patterns, and lead times. AI-driven tools, for example, can forecast shifts in demand, come up with alternative logistics options when normal shipping routes are disrupted, or even suggest new suppliers that can better meet urgent needs. In fact, nearly half (46%) of healthcare companies are already using AI to identify and address potential supply chain disruptions, according to 2024 research conducted by Economist Impact for DP World.

11. Manage Supply Chain Costs

Costs are always top of mind for supply chain managers in the healthcare sector, which operates on slim margins and faces burgeoning expenses. The cost of raw materials, freight, and labor is unlikely to return to pre-pandemic levels and will continue to put pressure on healthcare suppliers’ manufacturing costs, according to Vizient’s Price and Supply Assurance’s 2023 Budget Impact Projections report. In response, more than three-quarters (78%) of hospital purchasing leaders said they prioritize cost efficiency, according to Owens & Minor’s 2023 State of Hospital Purchasing survey. Thus, anything healthcare organizations can do to achieve hard and soft dollar savings is typically a good investment. Some avenues to pursue:

  • Implementing technology-driven automation to scale back manual data entry and associated errors, automate purchase order processing, enable automated inventory tracking and replenishment, and streamline documentation.
  • Standardizing procurement procedures, consolidating orders to reduce shipping costs, implementing just-in-time inventory where appropriate, and paring unnecessary steps in workflows.
  • Strengthening supplier relationships to negotiate volume-based discounts, establish long-term contracts with preferred pricing, collaborate on cost-reduction initiatives, and improve payment terms and conditions.
  • Enhancing data accuracy and analysis through regular audits of pricing agreements and invoices, tracking key cost metrics in real time, using data-driven forecasting, and integrating disparate healthcare systems to eliminate silos.

12. Utilize Strategic Sourcing and Bulk Purchasing

Another way that healthcare organizations can contain supply chain costs is through smarter procurement approaches. Strategic sourcing, for instance, goes beyond identifying and evaluating suppliers based on pricing, quality, reliability, and partnership potential; it adds practices that can help healthcare organizations gather insights, research trends, and develop overarching policies for supplier selection, performance management, and risk mitigation. A mature strategic sourcing approach encompasses market research, supplier evaluation, spend analysis, and a total cost of ownership assessment.

Bulk purchasing is another tactic to achieve greater cost savings through volume-based discounts. One way to maximize this approach is by joining a group purchasing organization (GPO). GPOs leverage their members’ collective buying power to negotiate better prices, terms, and conditions with suppliers. GPOs have also invested significantly in AI, machine learning, and data analytics capabilities to better anticipate and balance supply and demand issues, according to a 2024 report from the Healthcare Group Purchasing Industry Initiative.

13. Apply Lean Principles

Lean principles focus on eliminating waste and optimizing processes to deliver maximum value—a direction well suited to the demands of healthcare. To put lean principles into practice, healthcare organizations can implement several strategies to streamline supply chain management. For instance, lean inventory approaches (like just-in-time inventory management) allow providers to hold only the stock required to meet anticipated needs, a particularly useful way to manage perishable goods, like vaccines and medications. By coordinating with suppliers to receive smaller, more frequent deliveries, organizations can avoid the expenses associated with excess inventory, expired products, and carrying costs.

Beyond inventory management, lean principles promote standardization and simplification. For example, healthcare organizations may benefit from reducing the number of stock-keeping units they order and standardizing on fewer products, while also simplifying their procurement and inventory management processes.

Another lean principle is to adopt a culture of continuous improvement, which can be applied to supply chain management by monitoring key performance indicators (KPIs) and identifying opportunities to address inefficiencies, such as overstocking, waste, medication expiration, redundant steps in ordering and receiving, underutilized storage, and excessive staff time spent on routine tasks. Supply chain mapping is another method some organizations may apply to examine the flow of supplies from manufacturer to point of use to highlight bottlenecks or unnecessary steps that can be eliminated.

14. Integrate Data With Workflows

Collecting high-quality data is a necessary component of good supply chain management, but it’s not sufficient in itself. The real value of data comes from how it’s used and applied to improve supply chain processes. Which brings us to integration: Integrating data and insights into supply chain workflows is where true business value is realized.

One way to achieve this is by investing in an ERP system that can connect supply chain data to other systems’ data (e.g., financial and clinical platforms), so that information flows seamlessly and everyone works from the same source of truth. With high-quality, reliable data integrated across all enterprise systems, organizations can automate and augment existing, as well as new, workflows pertaining to procurement, order management, supplier relations, invoicing, and payments.

Integrated analytics tools can further harness this data to provide actionable outputs, like demand forecasts, real-time inventory tracking, and supplier performance metrics. Many healthcare organizations may find particular value in implementing real-time dashboards that monitor supply chain KPIs, such as inventory turnover, order fulfillment times, stockout rates, supplier lead times, and carrying costs.

15. Standardize Processes

One final method for optimizing a healthcare supply chain network is to standardize on processes, such as product selection and data governance. Healthcare leaders can achieve the greatest impact by standardizing all organizational processes so that supplies are procured, ordered, stored, managed, and utilized consistently across all functions and locations.

One of the most effective ways to accomplish this is to develop and implement standard operating procedures (SOPs) that establish clear, repeatable steps for key supply chain activities—ordering protocols, inventory checks, and stock rotation, to name a few. Just as important as implementing SOPs is making sure that there is adequate and ongoing training for everyone involved in supply chain management, from procurement managers to clinicians to administrative staff. Additionally, performance metrics related to standardization, such as order accuracy rates, can be tracked to validate adherence to these procedures and reveal any areas for improvement, perhaps through clearer communication, additional training, or system adjustments.

Finally, investing in supply chain management software reinforces process standardization, as long as all users are well trained in using the system, willing to adopt it, and consistently adhere to the necessary procedures.

The Future of Healthcare Supply Chain Management

A number of advances are creating opportunities for significant transformation in healthcare supply chain management.

As healthcare organizations adopt new digital systems, such as cloud-based ERPs and AI-driven predictive analytics, they can improve transparency and gain insights that drive greater efficiency, cost savings, and agility. Integrating supply chain operations with financial and even clinical systems generates more informed decision-making that aligns with overall business strategies and goals. Real-time inventory visibility can help healthcare organizations calibrate stock levels based on supply and demand trends, serving as a safeguard against disruptions. AI-powered tools also can further enable dynamic inventory management, more accurate demand forecasting, and overall supply chain process automation.

Another anticipated area of activity is greater collaboration with manufacturers and distributors. As healthcare organizations share data and improve transparency with their partners, they will more successfully navigate an increasingly dynamic and disruption-prone supply chain environment.

Resilience and risk management will continue to be a primary focus for healthcare supply chain leaders in the years ahead. This could include a stronger emphasis on risk mitigation, contingency planning, and investments in safety stock, where appropriate. Supplier diversification and local sourcing or production can also alleviate dependency on single sources and improve the agility and adaptability of supply chains.

Sustainability, which reigns as a strategic priority across industries, will be a focus in healthcare supply chain management, as well. Healthcare organizations that prioritize environmental considerations are exploring alternative fuels and vehicles, carbon-neutral warehouses, returnable and recyclable packaging systems, and optimization of delivery routes to reduce environmental impact.

Finally, innovations to improve quality control and regulatory compliance are likely. Blockchain technologies can prove invaluable for product traceability and authenticity, helping to prevent counterfeiting. Similarly, staying ahead of evolving regulations will be a top priority for supply chain leaders.

Ultimately, forward-looking healthcare organizations will focus their supply chain efforts on continually improving efficiency, resiliency, cost-effectiveness, and responsiveness to patient needs. With integrated data and systems in place, healthcare organizations will find themselves more able to amend their processes over time.

Redefine Your Healthcare Supply Chain With NetSuite

Investing in enterprise systems designed specifically for the healthcare sector creates a solid technological foundation on which to build an efficient, effective, and resilient supply chain. NetSuite’s cloud-based healthcare business management suite is trusted by more than 40,000 customers in the industry to tame complexity, improve visibility, and increase agility across their organizations.

NetSuite’s supply chain management solutions are designed to oversee the flow of goods and services from a manufacturer, vendor, or partner all the way through their usage. The software’s integrated demand planning, inventory management, and AI-powered predictive analytics features, along with tools for supplier communication during the purchasing process and supplier relationship management, equip healthcare leaders to streamline and sharpen their end-to-end supply chain.

Investing in a unified platform like NetSuite’s offers significant benefits. Because all supply chain records, financial reports, inventory, and order data are updated in real time, everyone in the organization can work from the same accurate information—whether they’re managing procurement, checking on an order, or collaborating with a key supplier.

A robust, resilient, and efficient supply chain is essential for delivering high-quality healthcare and improving patient experiences and outcomes. However, managing the complexity and frequent disruptions present along the healthcare supply chain can be challenging. Healthcare supply chain leaders who invest in the right data, systems, processes, and people to tame that complexity and mitigate risks can help drive strategic improvements in operational, financial, and clinical outcomes for their organizations.

Healthcare Supply Chain Management FAQs

How does supply chain management work in healthcare?

Healthcare supply chain management involves designing, planning, executing, and overseeing the procurement and delivery of all the supplies required for patient care—from software to prescription drugs. Healthcare organizations must manage a complex, often global, web of suppliers to guarantee that critical items are manufactured, delivered, stored, and ready to use when needed. The goal is to provide effective care to patients at a reasonable cost.

What is the focus of the healthcare supply chain?

The focus of a healthcare supply chain is to manufacture and deliver all the products necessary to enable high-quality healthcare delivery, improve patient experiences and outcomes, and keep costs in check. This includes managing the procurement and distribution of items ranging from pens and software to medical devices. By making sure supplies are available for the right price, in the right quantities, at the right locations, and at the right time, healthcare supply chain management supports better operational, financial, and patient outcomes.

What is a supply chain in healthcare?

A healthcare supply chain refers to the network designed to deliver the goods and services required to maintain the operations of a healthcare organization and provide effective patient care. Those goods and services may include everything from computers and clipboards to medications and MRI machines. Healthcare organizations typically must manage a broad network of processes, systems, data, and relationships to ensure that these items are manufactured, delivered, stored, and ready for use.