The Healthcare Supply Chain is Unique
The latest version of the nonprofit safety group Emergency Care Research Institute’s (ECRI) annual health technology hazards report identifies ‘supply chain shortfalls’ as one of the greatest dangers facing the healthcare industry, an enduring remnant of the global coronavirus pandemic.
According to ECRI’s researchers, the lingering supply chain management issues point to, “the need to progress from just trying to cope during the pandemic to building stronger and more resilient processes, leveraging the innovations developed, and the lessons learned along the way.”2
“When supply chain issues strike, the resulting production and delivery delays compromise patient care”, says Geoff Gates, Cleveland Clinic’s Senior Director of Technology for supply chain and support services.
“As one clinical department head put it, ‘You could literally shut down our department if we don’t get the supplies that we need.’ We take that very seriously,” Gates told HealthTech magazine in November 2022. “What we do and whether we get it right has a real impact on day-to-day operations.” 3
Overcoming supply chain management challenges begins with engaging the right suppliers during product research and development prior to manufacturing. This enables OEMs to identify local suppliers who can quickly deliver components during prototyping and the initial production run. The next step is to expand the supply base network to incorporate qualified suppliers, who can enable commercial scale-ups with optimal costs. The goal is to strike the right balance of local and global suppliers and negotiate the best prices possible to support mass production.
Implement these best practices to build a comprehensive network of local and global suppliers to avoid sourcing issues:
Utilize Dual Sourcing
Apply dual sourcing strategies for volume or complex components to strike the necessary balance between cost optimization and risk reduction.
Avoid Supplier Risks
Ensure your supply chain consists of qualified suppliers and components to avoid unfortunate and potentially time-consuming obstacles due to regulatory compliance.
Bring Teams Together
Bring engineering and supply chain teams together to ensure the design incorporates readily available components and avoids high risk components.
Understanding Early Sourcing Risks
Ensure there is a clear understanding of the potential impact of having to source qualified parts during the early stages of the design phase.
Establish Demand Forecasts
Engage the supply base during the design phase to establish clear demand visibility. This enables a fulfillment model that strategically positions inventory and establishes accurate replenishment lead-times across all supply chain nodes.