Weekly Business Insights 07/10/2023
Healthcare supply chains face shortages, rising costs, and delays. Technology enables data sharing and automation. Collaboration and tech reduce overspending. Proactive risk mitigation is crucial. Businesses must prepare for longer lead times and defects. FDA adopts digital solutions for supply chain improvement.
Collaboration And Technology Provide Answers For Health Care’s Supply Chain Problem
Nearly three years since the start of the pandemic, labour and supply shortages remain a big issue for health care organizations. Costs continue to rise and the production of certain goods are still facing delays. Difficulties filling job vacancies and global trade obstacles persist. At the same time, according to a recent Health Affairs study, clinical waste is a critical driver of excess health spending in the U.S., accounting for 5.4% to 15.7% of national health spending, resulting infailures in care delivery, care coordination and over treating.
According to Health Catalyst,approximately 30% of all hospital spending in the U.S. is related to supply chain overspend, which amounts to $25.4 billion for the U.S. health care industry each year. This is an exorbitant amount of money that could be used other wise to improve quality of care and further other organizational initiatives.
Modern technology is also bridging the gap between supply chain and the clinical side of health care by enabling greater data sharing. Automating the pricing synchronization process acknowledges and recognizes efficiencies by all participants in the contracting process, where all parties involved can share information electronically through robotic process automation.
Radical Supply Chain Visibility: The Antidote To Supply Chain Disruptions
As of mid-December, the United States Food and Drug Administration (FDA) published 31 different medical devices and supplies on its shortage list — including general hospital devices, anaesthesiology, dialysis-related products, testing supplies and equipment, ventilation-related products and more. Largely due to sudden demand increase, shipping delays, and manufacturing compliance issues, these disruptions have placed U.S. healthcare in a perilous state. For example,shortages of several high-profile prescription drugs including antibioticamoxicillin and ADHD treatment Adder all are making headlines. Patients are being forced to ration pills, while parents are hunting for over-the-counter pain and fever reducing medications for their sick children due to kids’ ibuprofen and acetaminophenbeing in short supply.
With the ability to foresee risk events such as a lockdown and the cascading impacts, agile intervention is possible. Healthcare organizations can leveragereal-time supplier and location intelligence to proactively find alternate suppliers or order supplies in advance of shortages. Better yet, it’s possible to operationalize this risk intelligence and automate risk mitigation actions based on pre-programmed triggers or thresholds that align with an enterprise’s overall risk mitigation strategy. In this way, organizations can realize significant improvements in risk management efficiency and effectiveness while reducing costs.
Semiconductor Unpredictability:Prescriptive Advice for Business
Businesses should continue to prepare and plan for longer component production lead times, especially for those that go into power supplies. Recognizing delays and issues are part of the new normal, companies will need to be more agile, so they are prepared to pivot. Planning for flexibility in their bill of materials beginning with new product introduction (NPI), and identifying multiple sources for these materials, will be crucial to navigating the next several years and maintaining production timelines.
Supply chain leaders should closely monitor not just semiconductor availability, but also the entire inventory mix. Consideration should be given to maintaining supply assurance by securing an adequate buffer stock to meet current needs while also focusing on future proofing of internal supply to meet the demands of next generation technology.
Medical Device Recalls Linked to Unprecedented Level of Faulty Manufacturing
Poor manufacturer quality is said to be creating a new spike in the rate of medical device recalls throughout the United States. According to the most recent "U.S. Product Safety And Recall Index" report by Sedgwick, manufacturing defects are the leading cause for product recalls in 2023 through the month of March.Several manufacturing defects were related to an inability to guarantee product performance when recommended temperatures and time out of range were exceeded.These findings reportedly mark the first time in the 12-year history of the report that device recalls were blamed on manufacturing defects. Typically,issues such as sterility, quality, or malfunctioning parts are cited as the leading causes of product recalls.
We’re also seeing greater adoption of software with in medical devices that can allow manufacturers to closely monitor their device sand potentially catch manufacturing defects before they fully emerge and communicate with patients the need to bring in their device for repair or replacement,” said Harvey. The FDA is also attempting to improve supply chain per formance and prevent product shortages by implementing digital solutions for new product submissions.