Fremont, CA: COVID-19 has shown systemic flaws in the healthcare system, most notably a recurrent problem with the capacity & resilience of the medical supply chain network. Since the pandemic, 59-83 percent of organizations have experienced delays or increased lead times in getting supplies. To weather the demand swings and disruptions, 81 percent of these firms modified their stockpiles, with the majority raising inventory levels.

Several key risk concerns or underlying issues for healthcare supply networks have emerged:

Lack of resilience

COVID-19 highlighted the need for improved supply chain robustness. IDC underlines the need for healthcare organizations being more adaptable to changing pandemic conditions while preparing for the "new normal" post-pandemic. Of course, preventing supply chain interruptions in healthcare has serious implications for the bottom line and patient care. Perhaps this is why, according to a recent poll, supply chain disruptions are becoming the second-highest issue for healthcare CEOs, after only patient safety.

Cost management

When demand for personal protective equipment (PPE) plus medical supplies surged during the outbreak, prices skyrocketed. Supply costs now can overtake people's costs as the largest expense in healthcare. According to a study, the majority of inventory decisions made to react to disruption are suboptimal, and almost half are unneeded. It is not unexpected considering the lack of visibility, as well as the fact that health systems often buy supplies given historical models and physician preferences rather than actual use and predicted demand. As a result, there is waste, procedures get delayed, and inventory and carrying costs are high.

Integration and interoperability

From an organizational, process, and technological standpoint, integration concerns contribute to cost increases and visibility issues. To connect the dots, data integration across different ERP, legacy supply chain systems, and external sources is necessary, as well as interoperability between instruments such as RFID barcode scanners that feed product data back into these systems.