In the healthcare supply chain world, the year 2020 created a notable split. Even those not directly involved in the healthcare industry, that would otherwise have no vested interest in healthcare-specific supply chain knowledge, felt the effects of this sizable upheaval. 

There were already weak points in the supply chain flow, and COVID brought them up to the surface and into the light. This resulted in the monumental strain our healthcare system has faced, with the effects being far-reaching and long-standing. Hospitals in the United States experienced a massive shortage of PPE, as well as other life-saving medical equipment. Of course, patients were not exempt from this strain either. Non-priority surgeries and procedures were either postponed or canceled. Sickness and quarantines prevented regularly scheduled appointments from taking place, and care plans that could transition to remote formatting did so.  

Downstream effects of the pandemic on the supply chain will continue to reverberate into 2023. Companies are now focusing on reducing their reliance on China by making efforts to source at least a percentage of supplies in-house. While the United States is by no means implementing a mass exodus out of purchasing cost-effective goods from China, we are consciously diversifying our supply sources. If the pandemic taught us anything, it’s that the lowest costing goods can sometimes come with the highest price. If your business is wholly dependent on one source for supplies, and a global pandemic shuts down that source, it’s time to variegate sourcing. For businesses not to respond in this way following the major hit global distribution took during pandemic shut-downs would be imprudent at best, and irresponsible at worst. We do not need this recent history of supply chain failure to repeat itself.    

COVID Highlighted the Supply Chain’s Visibility Problem

A major issue that the COVID-19 pandemic highlighted is lack of supply chain visibility within the healthcare sector. When the medical supply demand became urgent and global distribution was disrupted, companies faced the consequences of not having the necessary technology, systems, and plans in place to properly forecast these surges. Without effective contingency plans and the ability to successfully track and trace supplies, the healthcare system was not able to properly access need and adequately shift supplies to those within their own networks with the greatest needs. 

Following this failure, the lesson learned is that we must be proactive in moving forward with risk management by enacting updated contingency plans that work to directly prevent pandemic-related supply chain failures. With this new focus, companies can ensure that they’re doing everything in their power to facilitate greater resilience to future supply chain disruptions. 

Labor Shortages

Currently, we are facing labor shortages with every tier of provider within the healthcare industry. From R.N.s to M.D.s, a massive percentage of workers have left the field altogether. Statistics also show that young people are not gravitating towards healthcare careers either. Following the pandemic, the percentage of new doctors is lower than ever before. So much so, that experts are predicting a national shortage of primary care physicians by the year 2025.  

But healthcare providers are not the only profession experiencing labor shortages as a direct result of the pandemic. Supply chain truck driver shortages are slowing down distribution and driving pricing up, and the current trajectory could produce effects felt into the next decade. The American Trucking Association reports that in 2021 their shortages reached an all-time high, with an estimation of 80,000 more drivers needed to fill shipping demands. Factors contributing to the shortage include drivers leaving the industry due to the pandemic, as well as truck driver schools training significantly less students in 2020.     

Moving Forward With New Strategies

By this point, it’s abundantly clear to businesses negatively affected by the pandemic’s supply chain breakdown, that investing in the most up-to-date technology and current best practices for their production and logistics is no longer a luxury, but a prerequisite for future success. And in order to increase efficiencies and contain costs, significant industry players need to outsource logistics to an expert 3rd party logistics provider. As more manual systems convert to digital processes, and more tech options hit the market, 3PL providers can guide their customers toward the best technical direction for their business. 

Some supply chain trends gaining momentum for 2023 are:

1. Sustainability
2. Block chain databases
3. Robots and automation
4. Artificial intelligence
5. Cloud-based products
6. 5G networks
7. FDA’s new licensure proposal 

Sustainability

As sustainability becomes more popular with consumers, companies must center it as a primary, customer-facing pillar of their business model. Consumers place a higher value on companies that make noticeable efforts at sustainability and therefore vote with their dollars in favor of those companies. Businesses are opting for closed-loop supply chains to recycle product waste, reduce costs, and reduce carbon emissions. Closed loop or circular supply chains are systems that extract value from returned products or raw material production waste. Instead of discarding a customer’s returned item, for example, that item may be resold as a refurbished product. Companies are adopting sustainability practices that focus on energy efficiency, reduced packaging waste, optimized distribution routes, and using alternative sources of fuel. 

Block Chain Databases

Blockchain databases are structured differently than traditional databases that use tables to store information. In a blockchain database, the information is stored in blocks, and as new data pours in, new blocks are added. These new blocks stay connected to the storage blocks already in place. The benefits of using a blockchain database are less admin paperwork, increased visibility, and higher data security. This makes blockchain databases primed to help resolve the problem with the lack of supply chain visibility.   

Robotics and Automation

The global market for robotics is forecasted to increase from $55.8 billion in 2021 to $91.8 billion by the year 2026. Robotics can do monotonous jobs at a quicker pace than humans, which strengthens productivity and boosts the overall fulfillment process. Automation comes with the stigma of taking jobs away from human workers. However, this is not always true. While automated processes do replace some jobs that humans previously did, freeing up these positions allows for greater company growth which can allow new types of jobs to develop. Just like the washing machine replaced hand laundering, automation frees up time and energy that can be put towards more valuable, higher-paying positions. Robotics and automated systems ultimately move us forward and create new opportunities.   

AI

Artificial intelligence, or AI, is a huge time saver for businesses. It can speed up internal processes, which reduces time spent by people having to implement these processes, and in turn, reduces labor costs. The AI of today has the capability to analyze data, detect patterns, and predict outcomes, which allows companies to manage risk at a whole new level of efficiency and accuracy.  

Cloud-based products

Cloud-based products are quickly gaining speed in the market as people become more comfortable and trusting of the technology. The cloud packs a major benefits punch, including offering customization options, reducing costs, quicker implementation speeds, and extended software life. 

5G Networks

5G networks are leaps and bounds ahead of 4G networks in regards to device capacity. While 4G networks have the ability to support 10,000 devices per square mile, 5G networks can support up to 1 million devices per square mile. As technology advances, so does the need for systems that support those advances. With globalization on the rise within the distribution industry, it’s essential that 5G networks are in place to support the needed upgrades that allow space for business growth.   

FDA’s New Licensure Proposal

The FDA announced on February 4, 2022, the National Standards for the Licensure of Wholesale Drug Distributors and 3PL Providers rule. The purpose of the rule is to provide a more robust vetting system of pharmaceutical supply chain participants in order to increase safety and security of the supply chain. The hope is to create more uniformity and consistency, which will assist in supply chain visibility, and ultimately prime supply chain business for less loss and more growth.  

BioCareSD is proud to serve as a leader in specialty distribution for more than 40 years. We strive every day to deliver unparalleled service to our patients and partners and, most importantly, to provide patients across the country with fast and easy access to life-saving medications. To learn more about partnering with BioCareSD, please contact us here.