Leveraging-Data-Supply-Chain-Resilience

Aside from all the other disruptions it has caused, one particular achievement the global COVID-19 crisis can claim is that it has shone the harsh light of day on the fragility of our world-spanning just in time supply chains.

This is especially relevant for medical equipment suppliers which need to get lifesaving supplies to end users so that treatments can be effectively delivered. Perhaps the most salient example of this when discussing the pandemic was the global shortage of respirator machines when the full force of the SARS-COV-2 virus began to bite.

In order to avoid these situations rising again in the future, many medtech companies around the world are now searching for methods of increasing the resiliency of their supply chains and making sure they aren’t as susceptible to disruptive influences in the future.

The Scale of the Problem

According to fresh research from McKinsey, most companies are planning significant changes to the way they manage inventory in the future. Drilling down into the data we see 67% of healthcare (pharma and medical technology) companies will be doing this.

Of those companies which participated in the research, 67% said implementing dashboards to increase end-to-end visibility in their supply chains is a key pillar of resiliency, 37% implementing scenario planning for when disruptions occur, and 53% quote having sufficient or high master data quality. These three interdependent pillars provide the recipe for supply chain resiliency in a post-digital transformation and post-pandemic world.

"Overall, our survey shows that disruption has reshaped almost every supply chain,” writes McKinsey in its report. "97% of respondents say they have applied some combination of inventory increases, dual sourcing, and regionalization to boost resilience. Supply chain leaders believe that these efforts are paying off: 83% told us that the footprint resilience measures they have taken over the past two years helped them minimize the impact of supply chain disruptions in 2022.”

Data

Through the intelligent use of digital information, medtech companies can improve visibility over the entire supply chain and increase connectivity between its separate links.

By improving these separate but interconnected factors, supply chains can be notified at an earlier stage when things are going wrong, and delays are expected and then use that information to put contingency plans into action and ensure the continual flow of goods through the value chain. Being able to respond with agility when disruptions occur is the key to a more resilient supply chain and data is the key to becoming more agile.

Speaking to Computer Weekly, Henrik Smedberg, Head of Intelligent Spend Management at SAP, discussed an interaction they had with a customer who had found out one of their shipments was on the ship which blocked the Suez Canal in 2021. Not too big an issue in of itself but made infinitely more disruptive as they didn’t receive this information until two weeks after the event.

"Had we known sooner, we probably would have sent someone to get another pallet of these goods,” they said. "The problem was not an inability to source from elsewhere, but the fact the company did not even know it had cargo on the ship. Had they known, they could have redirected other traffic – that pallet would have been stuck, but their production wouldn’t have stopped, which it did [as a result of the stuck pallet].”

With more effective data usage and communication up and down the supply chain, this information could have been delivered instantly and the supplier could have reacted to make sure their customers still received their orders in as timely a manner as possible. However, with information siloed at various stages and no visibility into separate operations, this level of agile resiliency simply is not possible.

"For the third year in a row, supply chains remain at the top of the corporate agenda. Our latest survey shows that companies have made significant efforts to improve supply chain resilience over the past 12 months by expanding their successful digitization programs and implementing structural changes to their networks,” concludes McKinsey. "With volatility and disruptions likely to continue, we expect resilience to remain a key topic for the foreseeable future.”

Final Thoughts

With global events continuing to impact the movement of goods, brands in the medtech space – especially those whose business it is ensuring these essential devices get to where they are most needed – need to make the case to upper management to invest in the three pillars of supply chain resiliency. Mastering data will empower supply chains with increased visibility and agility which will make them significantly more resistant to future disruptive influences.

Supply chain resiliency is bound to be on the agenda at LogiMed 2023, being held in March at The Westin Rancho Mirage Golf Resort & Spa, Palm Springs, CA.

Download the agenda today for more information and insights.