A 2019 report from Deloitte focuses on 10 emerging trends – including one on the changing healthcare supply chain – and points to a variety of opportunities and potential risks that are likely to move the life sciences and healthcare industry significantly. The report, “Harnessing opportunities and managing risk in the future of health” also touches on ways healthcare leaders can seize on the opportunities presented while also managing the potential risks.
One of the 10 areas the authors zooms in on is the idea of synchronizing the supply chain, which they say will be necessary as increasing technological advancements in the life sciences pushes healthcare out of a one-size fits-all model to one where patients have a greater choice and say in their treatments and procedures.
“Organizations that require just-in-time delivery to provide faster, more convenient, customized, and closer to/at-home solutions are leveraging this customer-centric approach, which mirrors the approach pioneered in the retail industry. However, this shift in strategy is creating numerous operational challenges,” wrote the authors.
As care delivery becomes more targeted to individual patients, the need for new systems, processes, structures, and partnerships will increase in order to implement and deliver individualized products and services (e.g., precision medicine). Maintaining visibility and control into the entire supply chain would be challenging. But the authors suggest those that “build a risk-aware approach to implementing novel technology solutions for personalization and decentralization of their supply chains could potentially increase efficiencies and cost-effectiveness and provide patients a truly personalized experience.”
Here’s a snapshot from the report of what may drive change:
• Increased need to differentiate products and services and gain competitive advantage by providing customized customer service such as at-home, virtual care
• Medical research suggesting that different people respond to different therapies based on genetic and lifestyle differences leading to the need for personalized supply chain, especially for “Specialty care operators”
• Entry of technology and retail giants possessing strong distribution networks and the potential to disrupt traditional supply chain models of incumbents
• Pressures to control costs vis-à-vis increased complexity from smaller batch sizes and complicated testing for individualized medicines
Emerging opportunities for organizations may include:
• More effective treatments and better medical outcomes from differentiated products and services powered by a personalized supply chain
• Substantial increase in revenues over time from transition to effective personalized treatments from traditional one-size-fits-all approach
• Leaner and more flexible supply chain models that can adapt to more complex production and delivery processes of novel medical solutions and allow for increased visibility into operations, especially for “Health product developers”
• Increased flexibility in supply chains resulting in inventory reductions, improved efficiency in switching production to other products, and heightened negotiating power
Some of the risks that come with innovation may include:
• Patient harm from supply chain errors leading to inappropriate/unsafe personalized medicines reaching patients (e.g., lack of supply chain controls used by “Connectors and intermediaries” leading to spoilage of personalized medicines)
• Reputational damage and legal implications due to lack of visibility and control over third-party-driven complex supply chains (e.g., expired or defective personalized drugs reaching customers due to ineffective tracking mechanisms)
• Operational inefficiencies in handling just-in-time production operations, leading to delays and missed sales opportunities
• Financial loss due to increased exposure of IP to external players responsible for sourcing, manufacturing, and delivering products and services in a fragmented environment
• Technological challenges of managing functions with which life sciences and health care may not be familiar, such as customer relationship management (CRM)
