Health systems are rethinking procurement strategies to address unprecedented supply chain pressures, with 46% of stakeholders anticipating significant challenges by 2025. Mayo Clinic and Stanford Health are leading efforts by forming task forces and leveraging partnerships to mitigate risks from tariffs and inflation, while 72% of systems diversify supplier bases and 88% cross-train workers to enhance resilience.
Health Systems Addressing Supply Chain Challenges Ahead of 2025
Supply chains are facing unprecedented pressures due to policy changes and other factors. As the healthcare industry approaches 2025, health systems are taking crucial steps to address these challenges by rethinking traditional sourcing and procurement strategies. This article explores how health systems are adapting to ensure resilience amidst a rapidly evolving supply chain landscape.
Rethinking Procurement Strategies
The healthcare sector is recognizing the importance of proactive measures that extend beyond traditional cost-saving initiatives. Pharmacy leaders are identifying significant supply chain challenges anticipated in 2025, prompting a widespread transformation. The focus is on adaptation and ensuring resilience in supply chains, a necessity in overcoming the pressures posed by macroeconomic forces, tariffs, product shortages, and inflation.
With costs of supplies rising due to inflationary pressures and continuous disruptions, health systems are evaluating all areas of expenditure. Opportunities for cost reductions are being sought in areas like utilization, commodities, indirect spending, and physician preference items. This holistic approach is driving the transformation of supply chain management into one that emphasizes value-based partnerships and preferred supplier agreements.
Initiatives by Leading Health Systems
Mayo Clinic Supply Chain has established a task force dedicated to monitoring and mitigating risks associated with U.S.-based tariffs. This task force works closely with supply partners to assess potential tariff impacts and provides detailed information on the country of origin for each SKU. By converting some products within contracts to lower-tariffed SKUs and preparing to switch suppliers as needed, Mayo Clinic aims to maintain a supply of high-quality, cost-effective products for patient care.
Similarly, Stanford Health is focusing on financial management, supply reliability, and data transparency to navigate supply chain challenges effectively. By leveraging relationships with partners, health systems can increase the breadth of initiatives pursued in supply chain management. This collaborative approach is particularly important in responding to natural disasters and trade pressures.
Building Resilience and Innovation
The healthcare supply chain landscape in 2025 demands a proactive approach. Health systems are shifting from crisis management to strategic development, with 46% of stakeholders expecting significant challenges and 34% working on building resilience. Improving forecasting accuracy and diversifying the supplier base are key strategies, with 72% of systems focusing on the latter. Additionally, 88% are cross-training existing workers, emphasizing the need for innovation, talent, and transformation.
Digital freight matching platforms are transforming the brokerage landscape, offering clearer visibility and enhancing supply chain operations. However, logistics operations face a human capital crisis, with cyberattacks on logistics expected to double by 2026. The transportation landscape is dominated by uncertainty, leaving logistics managers feeling trapped in volatility, as highlighted by the 2023 LTL Study's emphasis on reliability partnerships.
Challenges and Future Outlook
One of the most significant challenges in supply chain management is driving value and savings amidst increasing costs. These challenges are exacerbated by macro forces such as the economy, tariffs, product shortages, and inflation. The potential imposition of a 50% tariff on all goods from the European Union by President Donald Trump, effective June 1, further strains devicemakers.
In response, companies like Medtronic are making strategic moves, such as planning to spin off their diabetes business into a standalone, publicly traded entity. This shift reflects a broader trend from crisis management to strategic development in the healthcare supply chain sector.
The ASCM's top 10 supply chain trends for 2023 highlight the evolving nature of transportation management systems (TMS) platforms, which are being developed for improved visibility. As the warehouse environment continues to be defined by pressure, health systems will need to maintain a focus on innovation and adaptability to navigate the challenges ahead.
“The focus on transformation and adaptation is essential to ensure supply chain resilience in the face of unprecedented pressures.”