Healthcare provide chains weren’t proof against the challenges created by COVID-19. But some proved to be extra resilient than others, in line with new analysis from Gartner.
In its 12th annual “Healthcare Provide Chain High 25,” the analyst agency ranked Johnson & Johnson’s provide chain as No. 1 for the second 12 months in a row. The report highlights healthcare provide chains that efficiently managed prices and improved affected person outcomes for healthcare organizations, offering examples for different provide chain firms to observe.
Stephen Meyer, analysis director on the Gartner provide chain apply, mentioned the pharmaceutical, medical system producer and client packaged items firm set itself aside in its method to discovering revolutionary options to issues going through healthcare provide chains this 12 months.
“There are two elements that I feel Johnson & Johnson has performed higher than anybody which earns them the coveted prime spot,” Meyer mentioned. “One is that they embraced technique by way of execution. … They have been all the time good at growing compelling methods, however now they’re nice at growing methods and incredible at ensuring they’re carried out throughout their varied companies globally. The second is that they actually haven’t any peer in the case of provide chain innovation.”
CVS Well being clinched the No. 2 spot, adopted by Cleveland Clinic, McKesson Corp. and Banner Well being in that order. Meyer mentioned all 25 healthcare provide chains set themselves aside in 2020 based mostly on elements similar to stock availability and profitability.
Rating healthcare provide chains
Johnson & Johnson’s give attention to enhancing the availability chain itself earned it prime marks in 2020, Meyer mentioned.
Whereas assets are sometimes funneled towards product innovation, funding in enhancing effectivity of the healthcare provide chain might be elusive, Meyer mentioned.
“Not like industries like retail, for instance, the place provide chain is extra central to the value proposition of the shopper, it may be exhausting to get assets to innovate on the availability chain,” he mentioned. “However Johnson & Johnson has excelled at that. They’ve been in a position to make compelling enterprise instances such that Johnson & Johnson company will spend money on the availability chain to convey them new capabilities.”
Meyer mentioned one instance of that’s Johnson & Johnson’s 3D Printing Middle of Excellence, a collaborative effort between the corporate and universities in North America and Europe to develop and commercialize healthcare merchandise quicker with 3D printing.
Exterior of the highest 5 healthcare provide chains, Meyer mentioned firms like Stryker Corp., which was ranked No.17, additionally discovered methods to face out in 2020. Stryker is a medical know-how firm that provides services in orthopedics, medical and surgical, neurotechnology and backbone. The corporate is greatest recognized for making ICU beds, which grew to become necessary early on within the pandemic when some hospitals have been flooded with COVID-19 sufferers within the ICUs, Meyer mentioned.
A problem typically going through new healthcare merchandise is the gradual approval course of from regulatory our bodies such because the U.S. Meals and Drug Administration, Meyer mentioned. With the upcoming pandemic, Stryker gained fast approval for an ICU mattress that took much less time to construct.
“The everyday ICU mattress accommodates over 10,000 components, which is a staggering quantity,” Meyer mentioned. “However what Stryker did is that they went from design of what they name their IKEA mattress as a result of it has 90% fewer components — solely about 1,000 components — they went from thought to approval by the U.S. FDA in seven days.”
The fast approval might change into a model for future healthcare merchandise, in line with Meyer.
“That form of threw away quite a lot of these long-held beliefs that we have to transfer gradual to ensure product security and efficacy … [which] was actually refreshing,” he mentioned. “I feel it will be one of many constructive impacts of COVID-19 as we transfer on.”
To find out the highest 25 healthcare provide chains, Gartner analysts checked out publicly out there metrics similar to stock turns, the provision of completed items an organization retains available, and return on belongings, which analysts gathered from monetary filings of the publicly traded firms.
Gartner analysts with healthcare subject material experience, in addition to exterior business consultants, are additionally polled to complement the rating, Meyer mentioned.