Published On: Mon, Feb 6th, 2017

Critical Condition? Improving Your Medical Supply Chain

Medical office – middle-aged male doctor greeting patient, shaking hands.


Running any business requires a keen understanding of the ebb and flow of the supply chain, and this is especially true when it comes to businesses in the medical sector. From syringes to bandages and dressing to medication, understanding the different factors that influence a medical supply chain is essential if you want your clinic, pharmacy or medical OEM to be a success.

Your business may have been getting by fairly comfortably without placing a critical eye on your supply chain management. However, if you want to ensure your success in the future, it’s essential to be on the lookout for areas that can be improved. Here, I’ve listed some of the best tips for greater revenue success.

Concentrate on Hidden Costs

From Flickr


The first thing you need to do to make sure your supply chain is really working for you is to realise that your current supply chain initiatives have a risk of only skimming the surface. Aside from focussing on the costs of measurable medications, surgical or sleep lab supplies, you also need to be thinking about distribution costs and other hidden expenses. Whenever you’re looking to invest in new products or services, it’s essential for medical business owners to look past the rudimentary approach of value analysis. Before your next big purchasing decision, ask yourself a number of questions.

How much are you paying at the time of the transaction? What are the total landed costs of devices, supplies and drugs which contribute to the cost for each individual case? Consider how many expired or excess products you were left with following your last big order, the product standards, as well as the variance of purchase prices. The hidden costs of your supply chain are just as important as the most obvious ones, and if you overlook them you’re only going to be shooting yourself in the foot.

Hone in on Sources of Waste

Once you’ve uncovered the hidden costs in your supply chain, the next important step in improving your supply chain should be pinpointing any kind of waste and eliminating it. Every hospital and clinic in the world is now facing a massive, universal challenge: how to reduce the expensive waste of drugs and other supplies. Many executives who are looking for ways to doctor the state of their bottom line are now looking to the supply chain for ways to improve it.

The higher-ups in any medical institution need to be able to find savings in their supply, drug and device expenses if they want their supply chain to really start working for them. One of the most common examples of preventable waste is physician preference items. A lot of doctors are used to being pandered to, especially if they’ve only ever worked at small clinics and establishments.

If the organization tries to meet the specific requests of every single caregiver on the payroll, and end up paying for items that are more expensive than they need to be, they can quickly begin working against the organization’s best interests as a whole. Try to encourage a company culture of smarter procurement practices, better communication, and engagement with all physicians on the workforce through strong leadership.

Develop Your Inventory

From Flickr


Figuring what it makes sense to order is certainly important for better supply chain management, but it’s only half the battle. You also need to spend some time determining what happens to the items you order once they enter your business, and how quickly they leave after that. If you’re operating your business without a well-thought-out capital equipment management system, it can quickly pile on significant costs, and lead to you failing to milk your equipment for all its potential, or repetitive under-ordering.

If you think that your organisation is in danger of this, it may be time to review your current inventory system, and consider purchasing some inventory management software for use in your business. This kind of technology is now more sophisticated than ever, and has been instrumental in making many businesses’ operations much more streamlined. This will help you to gain greater pipeline visibility, and access various pieces of information which will allow you to keep closer tabs on your inventory, and make data-backed decisions which will improve your supply chain performance.

Many of these modern interfaces use QR codes or RFID tagging, combined with more sophisticated data analysis, which will make tracking and directing the flow of supplies so much easier. If necessary, you should also consider a more high-tech HR system. Supply chain management in the health sector isn’t just a question of money. It touches every little facet of the organisation, and needs to be thought of as such. Look at the people in the organisation, including key partners, and determine how both your clinical and supply chain staff can be pushed for greater productivity.

Emphasise Education and Engagement

In order for you to achieve a more streamlined supply chain, meeting the needs of all the key people in your business, the higher-ups need to be able to engage frontline staff, helping them to understand why certain changes are happening, and how their actions in the day to day running of the business will impact the supply chain. A strong focus on clinical integration is essential here.

The frontline medical staff need to be engaged from the very start of the process, and this communication needs to become a constant, ongoing staple of your company culture. Establish some guidelines for good habits, discourage any avoidable hoarding, and make sure senior workers are educating the more junior staff on the importance of using all supplies efficiently.

If it’s appropriate, you may want to talk to your executives and establish some kind of buy-in system for the people at the business who have the biggest stake in the state of your company’s supply chain. By making these changes, and staying in close contact with the people who are taking to them the easiest, you’ll be able to spread awareness, and help doctors and nurses to understand their role in maintaining the financial health of the company.