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healthcare supply chain strategies

The business of keeping people healthy is expensive, and growing more so every day. From doctors' offices to hospitals to other health care facilities, there are a thousand different expenses to deal with. Medications and medical equipment needs to be ordered. Doctors and nurses need to be paid. All these things are succeeding in driving healthcare costs through the roof.

However, it doesn't have to be that way. The healthcare industry could learn a lot from the retail industry in terms of supply chain management. After all, from a purely objective standpoint, medicine and medical equipment are just business supplies, doctors and nurses are just employees, and patients are just customers. With that in mind, here are a few supply chain strategies that can help battle rising healthcare costs.

Read: Environmental Sustainability—Green Supply Chain Management


One thing that supply chain management works to do is automate processes and procedures that were previously done manually. This not only saves time and makes the processes more efficient, it can also serve to make them more accurate than when done by hand.

The healthcare industry has many of the same tasks that regular businesses do: data entry, billing and invoicing, and even filing complaints and grievances. Proper supply chain management allows these procedures to be automated, saving both time and money.

Eliminating Waste

One major source of expense, both in retail and in healthcare, is waste of supplies. Medication can expire, tools and equipment can be lost or misplaced, or any number of other things can happen, causing a bottleneck in the supply chain.

Learn: The Strategic Importance of Supply Chain Management

If the inventory of those supplies can be tracked and monitored through a database, it would give healthcare providers improved insight into what they have, what they need, what they're paying, etc., allowing them to plan ahead and reduce waste.

Capturing Data

In healthcare, proper data is vital. A single piece of information can mean life or death. Fortunately, in this respect, healthcare providers already use a few supply chain strategies: specifically, bar codes. A simple bar code can be encoded with identifying information about a patient. Anyone who scans it, from a doctor to a pharmacist to an intern can then immediately pull up that patient's records, including medications, recent treatments, allergies, and more.

Read: 5 Emerging Trends in Supply Chain Management

But there's more that can be done. Healthcare providers are constantly capturing and recording information on the medications, equipment/devices, and other things they use in treating patients. With a supply chain management mindset, that information can then be shared with other providers across the globe through a database, such as an electronic health record. This leads both to greater efficiency and to greater compliance, thus lowering costs.

These are just a few supply chain strategies that healthcare providers can use to battle rising healthcare costs. By better organizing the data for both their suppliers and their patients, they can improve efficiency and reduce costs. But more than that, these techniques will actually help them provide better treatment to their patients.

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About Michael Wilson

Michael Wilson is AFFLINK'S Vice President of Marketing and Communications. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. In his free time, Michael enjoys working with the Wounded Warrior Project, fishing, and improving his cooking skills.

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