Three key areas for health care supply chain success in 2023

Costs, supply reliability and operational efficiency top priorities for hospital purchasing leaders

January 5, 2023

Health care supply chain leaders have done enough looking back over the past three years to understand what factors led to today’s challenges. They have been consistently applying lessons learned in collaboration with internal (e.g., clinicians) and external (e.g., suppliers, distributors) stakeholders to determine which interventions are having the greatest impact.

Looking ahead to 2023 and beyond, Owens & Minor, a leader in health care distribution and logistics, conducted its State of Hospital Purchasing survey, asking 227 hospital purchasing leaders from Advancing Health Care Through Supply Chain Excellence (AHRMM) about factors driving their priorities moving forward. Here are some of the key findings from this research.

  1. Dollars and cents dominate decisions

When asked what they value the most, 78% of survey respondents said they seek cost efficiency above all other priorities.

Hospital supply chain leaders will likely pursue initiatives that have consistently yielded value, including standardization of manufacturers and supplies, and purchasing consolidation through a distributor to streamline processes and maximize contract savings. In fact, among those who took part in the State of Hospital Purchasing survey, 74% said they are working closer with distributors now compared to two years ago.

  1. Supplier reliability remains front of mind

Previously, many suppliers were able to compete based on price alone, particularly when it came to “commodity products.” Now, however, widespread shortages of common but critical items such as personal protective equipment (PPE) have changed the game.

Today, hospital purchasing leaders place a high priority on reliability in their supplier relationships, with 76% of those surveyed citing this factor as a top value driver for their teams.

With insights into the broader health care supply chain, including visibility into global product and raw materials status and backorder risks, health care distributors are equipped to help guide hospital procurement teams in selecting business partners positioned for strong supply continuity.

Owens & Minor delivers this transparency through its Supplier Metrics and Accountability Report Tracker (SMART Card) publication, which it sends to customers bi-weekly. The goal is to help customers plan for product availability or for the need to find substitute products.

Owens & Minor also continues to diversify and mitigate risk by investing in Americas-based manufacturing and finding alternative sources for products in both local and non-Asian markets. Today, the company has partnerships with over 1,200 branded and qualified diversity suppliers.

  1. Keeping pace with change requires greater efficiency

Staff shortages, cost increases, change in patient behavior and preferences, continued ramp-up in elective surgeries, and increasing performance expectations mean efficiency and smart decision-making are more important than ever. Three-quarters (75%) of health care purchasing leaders surveyed named operational efficiency as a priority.

Given their limited resources, supply chain teams need solutions to streamline day-to-day supply procurement and inventory management tasks so they can focus their efforts on strategic improvements. They are increasingly turning to industry partners for technology solutions that automate processes and leverage artificial intelligence to deliver actionable insights on supply consumption.

Recognizing how clinical staff members are struggling with unprecedented staffing concerns at a time when procedural volumes are rising, health care purchasing leaders are also seeking ways to extend technology-driven supply solutions into procedural areas. With Perioperative supply management being a major area of labor, expense, and waste, this has become a target for supply chain process optimization among hospital supply chain leaders.

Want to learn more?

The Owens & Minor State of Hospital Purchasing Survey Report contains insightful information on the priorities of hospital purchasing leaders during this current period of historic industry challenges. The complete report can be accessed here.