Health care product companies are increasingly recognizing the utility of an effective and well-managed supply chain, a new survey by Frost & Sullivan found. More than 75 percent of respondents acknowledged that supply chain management is key for future business success. Furthermore, over 80 percent of participants saw health care supply chains as crucial to hitting profitability targets and overall revenue projections.
The survey highlights the reasoning behind the increased shift towards supply chain review within the health care industry. Recently, many hospitals have invested millions in order to maximize the efficiency of hospital equipment supplies. The Frost & Sullivan findings confirm that these measures directly relate to the increased recognition of supply chain importance.
The survey introduction noted that supply chains are key to creating a competitive edge in a fast-moving industry. However, hospitals and health care product providers must seek out the relevant allies to maximize success.
The shift has already begun. Many hospitals and health care networks are forming mergers and working to consolidate their supply chains in order to reduce costs.
Of survey respondents, 61 percent believe that cost reduction measures will heavily impact health care companies' ability to respond to any cuts in reimbursement or revenue.
"Larger hospitals are consolidating networks to achieve greater cost savings and improve efficiency. This growing critical mass of providers means greater negotiating clout and thus the ability to wring price concessions from suppliers," stated the report.
Survey respondents recognized the impact these mergers will have on supply chains as a whole. In fact, 83 percent of participants believe mergers and acquisitions would have a direct effect on their supply chains.
Even more interestingly, the same percentage of participants believe that the health care industry and hospitals as a whole require the most supply chain innovation when seeking out increased efficiency.
The importance of managing supply chains
This survey highlights the overall importance of investing in supply chain management for health care professionals. A careful review of suppliers, product and distribution can help facilitate effective cost reduction for any hospital.
In a time when health care leaders are worried about revenue and reimbursements under the Affordable Care Act, supply chain management is an efficient way to reduce company costs and help lean company practices.
Technology has made this a much easier process, with things like RFID tags that can track inventory, suppliers and providers are provided with an increased visibility of supply chain practices which ultimately allow for better practices in the management of the supply chain.