Six major trends in healthcare supply chains

The history of modern medicine is a story of transformational ideas and radical innovations backed by decades of dedicated research. The pace of progress has accelerated relentlessly since key concepts emerged in the late nineteenth century, such as the germ theory of disease, the significance of hygiene, and the importance of data in decision-making processes.

The COVID-19 pandemic provides the latest, remarkable evidence of that progress. In a matter of months, the industry successfully developed and tested novel vaccines, scaled up production, and delivered billions of doses to people worldwide. It was a tenfold increase in speed compared to conventional vaccine development programs. Logistics and supply chain management played a key role.

Today, the transformative change gripping the life sciences and healthcare sector is placing new demands on healthcare logistics. A combination of factors is driving this change:

• Rapid advances in medical technology require us to rethink healthcare supply chain models – from methods of delivery to the very design of networks.
  
• Unprecedented global events like COVID-19 and their lasting after-effects have redefined expectations.
• Broader social trends are changing healthcare consumer behavior – how and where we want healthcare delivered.

Here are some figures behind these factors:

It’s going to take next-level healthcare supply chain management to deliver next-level healthcare. What exactly does that entail? Let's look at the six key trends driving this transformation and the main implications for healthcare logistics.

1. Patient-centric healthcare

Today’s healthcare supply chains evolved in a world of standardized, centralized treatment. But this world is changing. Personalized treatments require closer links between pharmaceutical manufacturers and patients. And patients now expect the same choice and convenience in healthcare that we know from the commercial marketplace, driving dynamic growth in the consumer healthcare segment.

2. Advanced therapies

New approaches are supplanting simpler, more generalized medicines. Complex cell and gene therapies are developed in small batches that require tightly controlled two-way supply chains. Biopharma products need to be handled carefully at every stage in the supply chain, prompting robust investments in cold chain logistics.

3. Digital healthcare

The pandemic fueled an explosion in remote healthcare, including “decentralized clinical trials” where shipments of urgent, sensitive, and temperature-controlled medications are replacing the movement of patients. This means more complex healthcare supply chain management – with sophisticated sensor and asset-tracking technologies for cross-system visibility and auto-replenishment as well as blockchain technologies to guard against counterfeiting and data theft.

4. New ecosystems

The urgency with which the COVID-19 vaccines were developed and distributed reset expectations – not just for the pharmaceutical industry but for logistics as well. Accelerated timelines have led some large healthcare providers to turn to third- and fourth-party logistics providers to handle the critical flows of medicines and devices throughout the supply chain.

Each of the six trends above adds extra complexity to existing logistics or requires completely new supply chain management models. Here are the eight areas providers should prioritize:

1. Cold chain capacities

The continued growth of biopharma will lead to increased volumes of temperature-controlled shipments. Cold chain networks must have the agility to meet changing demand, the ability to handle temperatures as low as -196°C, and state-of-the-art sensor and tracking technology to ensure compliance and on-time performance – right down to the last mile.

2. White-glove service

Patient-centric medicine requires logistics providers who understand the unique needs and sensitivities of healthcare logistics and can deliver the right product at the right time, including direct pickup from labs and handoff directly to patients.

3. Direct-to-X delivery models

Pharma companies shifting from supplying dozens of distributors to a diversified, omnichannel model – providing thousands of hospitals, pharmacies, or even millions of patients with a vastly larger portfolio of personalized products – need fundamentally different supply chain models.

4. Supply chain optimization

The growth of personalized, direct delivery models makes healthcare supply chain management much more complex. Accommodating this means more carefully orchestration by segmenting different customer and product groups, coordinating diversified supply chain elements, and applying state-of-the-art technology for end-to-end optimization.

5. Inventory optimization

Product availability is imperative, but big inventory buffers increase costs and the risk of obsolescence. Demand forecasting, end-to-end visibility, and intelligent planning help reduce capital and operating costs without compromising the ability to deliver what’s needed when it’s needed.

6. Digital technology

Modern control tower solutions can eliminate blind spots in the supply chain. smart sensors and interconnected systems give healthcare companies near real-time visibility of shipment location and status.