Gartner Gives the Healthcare Supply Chain a Checkup

Gartner has released its second annual review of the Top 25 Healthcare Supply Chains.  Like good health, there exists a litany of best practices that contribute to overall wellness.  Gartner examines what brings the greatest “value” to healthcare supply chains in terms of patient and financial health.  Like patient health, building an efficient supply chain is best achieved with regular maintenance, a team of providers working towards a unified goal, and a heavy dose of preventative medicine.

Building from the first annual publication, Gartner has updated their model for “value” in healthcare.  “The premise remains unchanged,” they note, adding, “Value in healthcare is still high-quality patient care at optimal cost.”  They go on to list the refined core capabilities of the value chain model:

·   Collaboration — Trading partners must enter into sustainable, collaborative relationships with a shared vision and transparent set of mutual goals to create win-win situations.

·   Network visibility — Trading partners must create bidirectional visibility to key information, such as inventory, demand, compliance and outcomes.

·   Dynamic supply — Because high-quality outcomes aren't static targets, all organizations must create agile, value-added supply chain responses tailored to multiple customer and channel segments.

The inclusion of these capabilities to Gartner’s updated model comes as no surprise: collaboration, network visibility, and dynamic supply are all hot issues in the supply chain industry.  Realizing the importance of these components is of great significance, especially to the healthcare field.  As the Gartner report notes, “Excellent supply chain capabilities reduce the time required to sense and respond to patient demand, and then produce a profitable, right-first-time supply response to that demand.”

At Vecco, we couldn’t agree more with Gartner’s message.  Allegro, Vecco’s suite of collaborative supply chain execution solutions, addresses the core capabilities endorsed by Gartner.  Solutions, like Allegro, that provide true business process collaboration will be key as businesses improve their healthcare supply chains.  “The importance and impact of collaboration in our value chain cannot be overstated,” Gartner claims, adding, “Collaboration is the wave, and its tide will flood the value chain with best practices for efficient development and delivery of patient-centric therapies and services.”

Efficient healthcare supply chains provide exceptional patient care, and optimal returns for business.  And that’s an easy pill for everyone to swallow.

Deloitte and the 7% Solution

In today’s global marketplace, everything is moving faster.  Businesses are living in an era of shorter product life cycles and turnaround times.  In a landscape that’s expanding exponentially and becoming increasingly more complex, effective supply chain management is not only advantageous…it’s critical.

Don't take our word for it:  here's what consulting powerhouse Deloitte said in its newest study.  The study shows that only 7% of the manufacturers surveyed effectively manage their supply chain, yet they are 73% more profitable than their peers.  It’s hard to argue with numbers like that.

That small percentage of manufacturers represents businesses with a clear advantage.  They’re operating more efficiently as they collaborate with their outside suppliers and customers.  As manufacturers continue to globalize, they need a complete picture of what’s going on inside and out.

At Vecco, we understand just how essential it is to build and maintain collaborative business networks.  Using an advanced solutions suite, like Allegro, businesses are able to dynamically orchestrate internal and external supply chains.  When you can simultaneously interact with your vendors and customers in a coordinated fashion, you can better manage the entire process more efficiently.  And, as Deloitte’s study points out, a diligently optimized global supply chain network directly contributes to significantly better bottom-line results.

The Rx for the Pharma Supply Chain

When one of the world’s largest consulting firms says that an entire industry’s supply chain infrastructure is “under-utilized, inefficient and ill-equipped to cope with the sort of products coming down the pipeline,” you sit up and take notice.

That’s exactly what PricewaterhouseCoopers (PwC) has written in a review of the pharmaceutical industry.  In its new report, “Pharma 2020: Supplying the Future,” PwC’s authors write that the industry will require a “radical overhaul” in order to meet both the changing requirements of the industry, as well as the larger change in outlook from patient-based to outcome-based approach.

The report predicts that collaboration will have to increase among healthcare partners, making the entire process more efficient.  We couldn’t agree more.  The supply chain environment has exploded into multiple dimensions; today’s supply chain can no longer be run in a linear manner – by the time problems are communicated sequentially through the supply chain, the original conditions and problem have changed. In an environment where any disruption among any of the partners at any level runs the risk of causing disruption at every point, information needs to be communicated simultaneously and decisions need to be made in parallel and often collaboratively. Synchronized, collaborative demand-supply networks are what is required.

PwC writes that “the supply chains for designing, manufacturing and distributing pharmaceuticals and medical devices plus those providing healthcare services will integrate so that all partners can see the full picture and help them plan ahead more accurately and cost-effective.”  In short, we believe they’re saying that pharmaceutical companies’ supply chains will evolve into what we at Vecco refer to as a business network.

The business network is collaborative.  The business network enables companies to create real-time, synchronized multi-partner approaches that solve their global supply and fulfillment challenges. 

Other vertical industries may not need the “radical overhaul” that PwC says pharmaceutical firms require.  But they clearly need to think ahead; what’s worked in the past…what works today…will almost certainly fall behind as the global economy becomes increasingly more inter-connected, and definitely more competitive.   PwC’s spokesman is quoted in the company’s news release as saying, “Companies that recognize information as the currency of the future, will be those that go the final mile and stand out by 2020.”  He’s talking about pharmaceutical firms, of course, but his words clearly apply to virtually every firm out there today.