29.7 C
Wednesday, June 19, 2024
HomeSupply ChainStrategic Criteria for Healthcare Sustainable Practices

Strategic Criteria for Healthcare Sustainable Practices

Modern supply chains enable businesses to source raw materials and components at the lowest possible cost. Companies take raw materials from one country and manufacture components in other parts of the world to manufacture their goods. One of the primary reasons multinational healthcare corporations have thrived over the previous two decades is their incredibly efficient supply chain, which is not easily replicated by competitors. Supply chains have a bigger environmental impact than previously anticipated. When global supply chains are not managed, they can result in human resource exploitation, higher emissions, and increased waste creation. Sustainable supply chain management aims to address these concerns by strategically managing all supply chain processes. This article discusses the strategic criteria for establishing a long-term supply chain in the healthcare industry.

Defining Sustainability Measures

Sustainability is assessed by the performance of three standards in Environmental, Social, and Governance (ESG). While a balanced coverage of all three is an ideal goal, it is not always attainable. Healthcare organisations must first understand their stakeholders to determine which sustainability measures are reported. The main issue with measuring sustainability is that organisations cannot measure and assess something that cannot be defined. To that end, the World Federation of Exchange (WFE) has developed ESG Guidance and Metrics to assist. It is intended to be a resource for organisations interested in implementing, improving, or mandating ESG reporting in their organisation. The Sustainability Accounting Standards Board, or SASB, also assists organisations in identifying industry-specific standards. It covers healthcare delivery, distributors, managed care, medical equipment, suppliers, and key topics and disclosure data. These standards can be used by organisations to determine which measures are likely to be most important to their organisation and then measure its various dimensions.

Implementing Sustainable Procurement

Sustainable procurement allows businesses to meet their demand for goods and services while also benefiting the organisation, society, and economy, and reducing harm to people’s health and the environment. It employs engagement strategies within organisations, as well as with suppliers and group purchasing organisations. Aligned with the healthcare imperative to “first do no harm”, organisations can reduce supply chain impacts and transition far away from a “take, make, waste” linear economy to a circular one that generates economic and business opportunities. The organisation can use the “plan-do-check-act” cycle as a framework for developing and implementing a successful sustainable procurement program. This cycle model depicts the process of continuous improvement, which assists an organisation in developing and evaluating program segments one step at a time while adapting to new experiences and lessons learned. Sustainable procurement should become the standard practice in healthcare organisations that understand how their purchasing decisions affect supply chain sustainability.

Executing Transparent Supply Chain

Supply chain transparency refers to an organisation knowing exactly what is happening at every stage of its supply chain and communicating clearly stated, factually backed information about its supply chain operations internally and externally. The first step in developing a transparent supply chain is determining what transparency means to an organisation. An organisation may start with an evaluation of materiality assessment of its internal and external stakeholder interests. This is followed by an understanding of supply chain processes and flows, the establishment of transparency goals, and an openness to sharing information throughout the supply chain. The benefits of transparency are immense. It can enhance the organization’s reputation among consumers, reduce operational costs, increase productivity, and enhanced patient safety. Bringham& Women’s Hospital in Boston has cut medication errors by about 40% thanks to clear visibility and transparency.

Evaluating Supply Chain Collaboration

Supply chain collaboration is a collaboration between supply chain stakeholders with the goal of creating a seamless and synchronised supply chain that leads to better responsiveness and performance in serving end customers. These activities are established on mutual goals, along with shared risk and reward. Nowadays, most supply chains are decentralised. When organisations do not have complete control over resources, materials, strategy, or service quality, collaboration is the only method to unite the supply chain. A more actively engaged working relationship with suppliers is required for successful supplier collaboration. A change in mindset will encourage all parties to commit to the long-term pursuit of value from their collaborative relationships. Supplier collaboration is no longer a nice to have if an organisation wants to improve its performance. As organisations reach the bounds of traditional purchasing practices, continued advancement would need a new cross-functional engagement, close and strong relationships, and the shared pursuit of new goal.

Engaging Innovative Solutions

Healthcare systems around the world have never been under more strain than they are right now, thanks to the current Covid-19 pandemic. The healthcare industry has been ripe for innovation for some time, and the Covid-19 pandemic has acted as a powerful trigger.  Innovative methods are being engaged to impede the virus from spreading and provide patients with the safest possible care. During the Covid-19 pandemic, Novant Health in North Carolina innovated by teaming with Zipline to develop a drone that delivers COVID medical supplies to remote areas. Another example is a low-cost, readily built ventilator created by military scientists in the United States for use in hospitals and the field. These ventilators were conceived, produced, and approved in just a few weeks, a procedure that normally takes years. While these are measures healthcare organisations can take to minimize the bottlenecks they are experiencing now, investing in innovative solutions will help to build resilience for the next major challenge they face, whatever that may be.

The full content is only visible to SIPMM members

Already a member? Please Login to continue reading.


Agustin Guteirrez, Ashish Kothari, Carolina Mazuera, and Tobias Schoenherr. (2020). “Taking Supplier Collaboration to the Next Level”. Retrieved from https://www.mckinsey.com/business-functions/operations/our-insights/taking-supplier-collaboration-to-the-next-level, accessed on 19/03/2022.

Bryan Quek Guan Kia, DLSM. (2021). “Key Technology Systems to Implement Integrated Logistics”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/key-technology-systems-implement-integrated-logistics/, accessed on 19/03/2022.

Chin Pei Sze Angelene, DPSM. (2020). “Crucial Factors for Sustainable Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/crucial-factors-for-sustainable-procurement/, accessed on 19/03/2022.

Paisley Ang Siew Boay, DPSM. (2019). “Key Considerations for Sustainable Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/key-considerations-sustainable-procurement-2/, accessed on 19/03/2022.

Sunil Gunwani, GDLSCM. (2021). “Best Practices for Building Sustainable Supply Chains”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/best-practices-building-sustainable-supply-chains/, accessed on 19/03/2022.

Tan Fei Ni
Tan Fei Ni
Tan Fei Ni has substantive years of experience in the field of customer service, logistics, and supply chain management. She is a Certified Public Accountant (CPA) Australia and holds the Bachelor's degree from Monash University (Australia). Fei Ni is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). She completed Graduate Diploma in Logistics and Supply Chain Management (GDLSCM) in April 2022 at SIPMM Institute.

Most Read