Supply chain. You know it has something to do with supplies … and large-scale ordering and distribution of … items. Yet there’s healthcare news about it everywhere. (Are you hearing about it more, about the same, or less often than blockchain?)

Take 90 seconds or less to better understand what supply chain is and why it matters to a professional striving to positively affect the efficiency, effectiveness, and fiscal health of their organization. (That’s you!) Then you can decide whether to add this bullet to your resume and/or job description:

  • Departmental liaison for supply chain management

Supply chain defined and why it’s important:

  1. Supply chain management in healthcare involves obtaining resources, managing supplies, and delivering goods and services to providers, patients, and healthcare administrators.
  2. It includes clinically focused items such as drugs, medical supplies, and diagnostic equipment. But it also covers non-medical items needed to run the hospital or practice from an admin perspective like computers, pens, paper, and gloves, sheets, and patient gowns.
  3. Healthcare supply chain is very different from other industries and carries special challenges. Their end product = a finished widget. Healthcare’s end product = a treated human.
  4. Some items are subject to regulations or laws regarding their sale and handling; others are not. Players include the US Food & Drug Administration, Centers for Medicare & Medicaid Services, private insurance companies, and others.
  5. Supply chains in hospitals can account for as much as 30% of total hospital costs.
  6. Providers play a role in the opportunity to cut supply chain costs. When docs demand preferred supplies or brands for items needed during appointments/procedures, the org must buy smaller amounts of supplies from many different suppliers, which is more costly.
  7. It costs a lot to get a product from manufacturer to the hospital or physician’s office. So many hospitals are building warehouses for supplies, automating them, and ordering directly from manufacturers to cut out the vendors and middleman costs.
  8. Supply chain is complicated because a bunch of independent stakeholders—manufacturers, insurance companies, hospitals, providers, and group purchasing organizations—act in their own best interests (and are regulated—or not; see #4).
  9. Healthcare supply chain is also complex because systems are composed of different entities (hospitals, physician practices, ambulatory). That makes it harder to oversee.
  10. Supply chain and procurement have always existed, but now organizations are raising its importance, giving the supply chain leaders a seat in the C-suite.

In sum, supply chain will remain sharply in focus as a way to reduce costs amid declining revenues at many healthcare organizations.