Health care supply chain challenges

Companies within the life sciences sector have to follow a strict set of guidelines for the production, management and distribution of their products. Especially as the regulations for unique device identifiers and traceability standards have evolved over the past few years, biotech companies and medical device manufacturers need to gain critical insights into their supply chains in order to maintain compliance.

The unique product management and supply chain challenges faced by life sciences companies force operations managers to take a step back from their supply chains and make sure they're remaining compliant while simultaneously keeping up with demand. Therefore, there are a few key concepts the health care supply chain has to take into account.

Here are just a couple of those challenges:

Cost control impacted by inefficiencies

As the supply chain becomes more global and regulations evolve, life sciences companies are faced with the need to manage cost more effectively in order to ensure business vitality. The U.S. Department of Health and Human Services found that in 2014, spending on health care in the U.S. increased by 5.3 percent to reach a total of $3 trillion, or around $9,500 per person, according to The New York Times. This staggering amount of money being poured into the health care industry impacts the supply chain in different ways, but the fact remains that costs are rising, which means companies have to figure out how to curb the ever-rising costs of manufacturing and distributing health care products.

According to Inbound Logistics contributor Justine Brown, although health care companies have traditionally had pretty good margins, the evolving landscape of the industry is forcing them to reevaluate how they do business.

"The sector is still burdened by manual processes and a significant amount of re-work," Brown wrote. "Such inefficiencies can result in ordering errors, lack of product on hand to treat patients, clinicians receiving incorrect product, and expired inventory."

These inefficiencies need to be ironed out and the supply chain augmented with logistics solutions, in other words, in order to support these constantly evolving requirements.

Health care spending is on the rise in the U.S. - and it's proving to be a challenge for life sciences organizations.Health care spending is on the rise in the U.S. – and it's proving to be a challenge for life sciences organizations.

UDI compliance

Medical device manufacturers have to comply with stringent regulations, as well. For instance, the UDI mandate that took effect in 2015 stipulates that manufacturers of all Class I, II and III devices have to have an identifier in both machine-readable and human-readable formats. The FDA also requires that these identification codes are all submitted to a centralized database. In the long term, it's hoped that these regulations will create a foundation for a secure global distribution chain and allow for more accurate reporting.

In order to remain compliant with these regulations, supply chain managers for life sciences companies need to have complete oversight over their entire operations.

Inspirage has developed a range of industry-focused solutions for these unique supply chain challenges. For instance, our UDI solution was created specifically to help companies in the life sciences industry properly manage their compliance with the recent traceability regulations.

Recently, Inspirage was selected to assist a global medical device company focused on cardiovascular health implement UDI compliance within its operations. By utilizing a phased rollout process and our easy-to-use UDI software, this company was able to become fully compliant with the FDA's traceability mandate – one of the first of its kind to do so.

For more information, be sure to get in touch with the supply chain experts at Inspirage today.


Sandeep Thigulla | Key Contributor

Sandeep Thigulla possesses 12 years of project experience with Oracle applications and modules including Fusion Cloud Applications and the Oracle E-Business Suite (EBS), specifically Service Parts Planning (SPP) and Logistics, Customer Relationship Management (CRM), Supply Chain Management (SCM) and Order to Cash. He has successfully planned, executed, and monitored large complex projects with multiple clients globally. Industry experience includes high tech, retail services, manufacturing, and service industries. He is recognized as a leading expert for the Oracle Fusion Cloud Implementations within CRM and SCM.