Across all manner of verticals, efficient supply chains can boost margins, but in order to capture those efficiencies, supply chain management processes need a technological overhaul.
So it is with the healthcare industry, according to a recent report by Sage Growth Partners. The headline numbers show that, as reported on sites such as FierceHealthcare.com, more efficient supply chain management can give operating margins a lift of at least a few percentage points.
Thus, the case for investing in supply chains (and garnering a return on investment) seems clear – but, as the study found, many executives are not pulling the trigger on those investments, and are still relying on outdated processes when it comes to supply chain management.
The study, based on a survey of more than 100 C-level and supply chain executives in the healthcare space, was conducted by Sage on behalf of Syft, a supply chain management firm formerly known as Management Health Solutions. The insights come as supplies (spanning medical and other products) are among the more significant parts of healthcare spending. Other research, such as that conducted by the Association for Health Care Resource & Materials Management, has estimated that, as early as next year, spending on supplies will surpass labor costs as the largest hospital expenditure.
“Like IT, managing the supply chain was historically relegated to the basement – largely regarded as an expense rather than as a strategic business imperative that can positively impact margins,” Sage said in its study, titled “The Largely Untapped Value Opportunity: Optimizing Supply Chain Management.”
Yet the findings show that although executives express confidence in managing supply chains, the solutions they use are more limited than might be expected, especially in complex, high-cost settings like the operating room. To track margins by surgical procedure, said the study, 46 percent of executives use in-house solutions based on manual or spreadsheet processes.
According to the report: