The healthcare industry's digital transformation will have a profound impact on the supply chain in 2024. Adoption of modern technologies, such as cloud computing, will lead to increased automation and efficiency. This will result in improvements in workforce management and a more resilient supply chain, with a focus on accuracy and waste reduction.

According to a July, 2023 Cloud Market Survey from GHX, nearly half (45%) of hospitals and health systems have already transitioned to cloud technologies for supply chain management, and many more will do so over the next 24 months. Embracing the cloud will enable healthcare providers to expand supply chain capabilities to support the growing market for non-acute care. It will also facilitate faster, more efficient and secure information exchange with trading partners, surpassing the limitation of current systems. 

The use of modern technologies and tools also means that every digital transaction will become a valuable data point. This data will serve as a foundation for advanced analytics, providing meaningful insights and facilitating data-driven supply chain decisions.

Following are four areas where the healthcare supply chain industry will be transformed this year.

Advanced technologies will make supply chain disruptions more predictable. The adoption of cloud-based enterprise resource planning (ERP) systems has revolutionized data management, by creating centralized and unified data repositories. This has paved the way for advances in technologies like artificial intelligence and machine learning. With access to vast data sets, these technologies are now able to power intelligent and dynamic inventory management analytics. Supply chain leaders can use them to anticipate and mitigate disruptions by identifying alternatives for backordered products.

AI adoption will continue, driving inefficiencies out of the supply chain. The healthcare industry is being transformed by technology. With the automation of mundane administrative tasks and the utilization of AI and ML to gain access to real-time industry data and intelligent analytics, healthcare professionals can now prioritize more strategic and innovative work, such as enhancing the patient experience and improving supply chain resilience.

Process automation will expand into new areas of supply chain operations. As healthcare supply chain leaders look to optimize limited working capital, they’re turning to process automation to streamline their operations. One area where it’s gaining traction is the implantable device supply chain.

A promising trend for the upcoming year is the collaboration between trading partners to extend automation from procurement to invoicing and payment. Currently, a significant amount of human effort is still dedicated to those tasks, but technology offers a solution. We’ll see a greater adoption of automated solutions in the coming year, particularly in invoice and payment processes for all areas of supply spend.

Human experts will remain critical to decision-making. AI's popularity is on the rise in healthcare organizations that prioritize connectivity and implement data lakes to manage clinical, supply chain and cost data. It's important, however, to note that AI isn’t meant to replace clinical or supply chain decision-making, but rather to assist decision-makers in identifying usage patterns and potential opportunities.

Consider the analogy of baggage screening technology in airport security. While these tools are designed to alert TSA agents to potential risks and threats, the agents are responsible for interpreting and acting upon the information. They’re empowered to make critical decisions because of their expertise and experience. This same principle applies to healthcare. By utilizing AI, companies can quickly analyze large volumes of data, and discover valuable insights. Without the input of a human expert, such as a clinician or supply chain professional, the information gathered by AI would hold less value. When combined with human expertise, AI becomes a powerful tool that enhances decision-making instead of replacing it.

The healthcare supply chain has undergone years of digital transformation, but the road ahead promises more waves of change. This year, we can expect to see supply chain leaders turn toward advanced technologies such as AI and ML to drive automation into the healthcare supply chain and increase efficiency, lower costs and enhance the quality of patient care.

Kristin Motter is strategic sourcing and value analysis consultant with GHX.