It’s the question asked of every supply chain professional in healthcare. What steps do we need to take as an industry to de-risk the supply chain post COVID-19? The top strategies tend to roll right off the tongue:
- Build a strategic stockpile
- Expand the number of sources of supply
- Buy American.
When the follow up question is asked, what’s needed to execute the strategy the answers are not quite so clear?
Interestingly, all these initiatives can be made more effective by a trend that is the fastest growing area of ecommerce, the business-to-business digital marketplace place. The publisher Digital 360 estimates B2B digital marketplaces will exceed $3 Trillion dollars by 2025. As consumers, we just expect access to multiple sources of product at the touch of a button. Businesses are now demanding the same convenience and efficiency which in turn will drive the exponential growth in business to business ecommerce over the next 5 - 7 years. Nearly 87% of companies say they currently buy some items using digital marketplaces and plan to expand their business with marketplaces. Not coincidentally, the reasons other business sectors are adopting the marketplace model happen to be the reasons the model will de-risk and improve the medical products supply chain.
Let’s take stockpiling for instance, historically for all its benefits, the process has been wasteful inefficient with many products expiring on the shelf or not getting to those with the greatest need. A Digital B2B marketplace provides an outlet to turn and replenish inventory across multiple sources. It is designed to create visibility and access to allow those with demand to see and acquire the products they need. Since we never know where the hotspots will be in a health emergency, or the products required, a marketplace creates a virtual stockpile where participants can trade (buy, sell and donate) with each other.
Expanding sources sounds good but onboarding and maintaining a lot of new suppliers to diversify supply sources is costly and inefficient on a just in case basis. The beauty of a digital marketplace is setting up one vendor and gaining access to multitude of credible sources all in one place, making it an efficient model to maximize sources.
Buy America is the right step, but as many new American manufacturers are finding out the hard way, access to the market is difficult. The marketplace model is designed to promote the expansion of sources, create competition, and improve pricing delivering efficiency to buyers and sellers.
The digital marketplace creates a unique and much needed “medical supply safety net” for healthcare in that it enables care providers to trade with each other. In times of shortages, the best source for a product could be the hospital down the street.
Any and all efforts to transform our supply chain move us forward. By adopting the marketplace model, we efficiently enable the change that will make the supply chain more resilient and reduce risk during supply disruptions.