COVID-19 has been a hugely disruptive force in the procurement process for healthcare firms; but technology has the power to fix these issues and ensure the lessons of 2020 are learned. Health Tech World spoke to expert Tony Harris, global vice president, business network solutions, SAP, to find out more.
HTW: What trends have you seen emerging in recent months in terms of the procurement of medical supplies?
Tony Harris: Clearly there is a heightened need for medical supplies as the world contends with the pandemic. In SAP Ariba Discovery, a digital solution where buyers post sourcing needs and suppliers respond, medical supplies have been the top commodity posted by buyers in the UK for the past six months.
However, while buyer postings for medical equipment made up 13.2 per cent of postings in March 2020, it was at only 8.4 per cent in August, and then in October it was 4.4 per cent, suggesting that the supply of medical equipment has now stabilised and demand is largely being fulfilled either via existing supply chains that have now recovered from the initial surge or from new sources of supply that have established themselves over the last eight months.
How can healthcare organisations better prepare to ensure they don’t experience the shortages we saw last year?
The shortages we saw at the start of the pandemic were caused by unprecedented demand. Simply put, linear supply chains just could not cope.
This highlights a potential shortcoming of the linear supply chain, whereby each of the trading partners in the chain are completely dependent upon the next. As soon as one of those trading partners has a disruption such as a supply shortage, the supply chain grinds to a halt.
This is where agile, networked supply chains come to the rescue. In a networked environment, each trading partner has the ability to pull from several sources of supply and is less dependent on a single supplier, providing a more resilient solution.
What specific tactics could healthcare organisations consider to speed up the procurement process at this critical time?
One of the biggest issues contributing to the time it takes to procure goods and services is the process of supplier discovery and qualification.
SAP Ariba Discovery is specifically designed to bring trading partners together quickly matching buyer needs with supplier capacity.
To help buyers and suppliers find each other to fulfil urgent needs, SAP opened access to SAP Ariba Discovery in March 2020 with no fees for buyers to post or supplier to respond.
Since then, new buyer registrations globally have increased more than 180 per cent, new supplier registrations have increased nearly 4000 per cent and supplier responses to buyer postings have increased by over 200 per cent (as of October 25, 2020, compared to the pre-promotion period of January 1 – March 9, 2020).
In one example, a US-based construction supply company urgently needed 500 hospital beds for a new temporary hospital being built to treat COVID patients. Its existing supplier had no stock. The company posted its requirements and within 30 minutes a new source of supply was found.
In what ways can healthcare organisations embrace digital transformation within their supply chains more broadly?
By adopting digital technologies organisations can evolve to become intelligent enterprises, leveraging the power of cognitive computing to make processes faster and more efficient and gaining valuable business insights from multi-dimensional deep learning analytics.
This enables employees across the business to focus less time on low value and repetitive tasks in favour of strategic, value-add activities which are typically more rewarding for the individuals and create greater value for the business overall.
What is your key piece of advice for mitigating supply chain risk?
Firstly, invest in a supplier risk solution in order to get a clear understanding of where the risks lie within your supply chain and then be able to mitigate accordingly.
Also, review your current supply chain for single points of failure. It has been common practice over the last 10 years to reduce the size of the supply-base and often move to a sole-source model, however with the impact seen from the pandemic, many organisations are now moving to a multi-source model, leveraging a networked supply chain, to be more resilient in the future.