Solving healthcare supply chain challenges with Workday

Resilience isn't just about weathering storms; it is rooted in anticipating change and crafting a strategy that can adapt to an ever-evolving environment.

The vulnerabilities COVID-19 exposed are still as important as ever—especially given the global pandemic irrevocably altered our daily lives and workplaces, underscoring the importance of adaptability.

Nowhere is this more evident than in the healthcare sector, where supply chain challenges have prompted a sweeping reassessment of current systems and strategies. In fact, according to a December 2024 Gartner study, the supply chain makes up 39% of the total cost of patient care at health systems.

As such, many healthcare leaders are embarking on a mission to transform the sourcing and delivery of medical supplies—and this moment is more than a call to action; it is an invitation to reimagine the landscape of healthcare logistics. Providers should craft systems that seamlessly navigate disruption to help make supply chains more agile, ready to meet everyday demands and navigate urgent crises with equal efficacy.

To help address these challenges, healthcare organizations should focus on a few important strategies—and implement the proper technology.

1. Supply chain resiliency is considered king. Companies should develop systems capable of withstanding disruptions, offering continuity of care even during crises. This involves creating a responsive supply chain that can quickly adapt to changing circumstances and maintain the flow of essential supplies.
   
   Historically, the thought was to double down on either self-distribution or just-in-time (JIT) inventory management, but the reality is organizations need to do both. You need to have strategic bulk reserves to be prepared for unforeseen events and supplies that the health system uses in extremely high volume—all while being able to leverage the scale and core competency of some medical/surgical distributors.
   
2. Don’t underestimate demand forecasting. More precise demand forecasting is essential for maintaining ideal inventory levels. Healthcare organizations should be able to predict demand for various products, from everyday medical supplies to integral equipment, to help prevent shortages and stockouts. This often requires a scientific, data-driven approach to understand actual demand and safeguard preparedness for potential disruptions. Think about anything from a pandemic or an especially rough flu season to a natural disaster that can knock out communication, internet connectivity and electricity for an undetermined amount of time.
   
3. Assess inventory management. Effective inventory management is imperative to help prevent both overstocking and understocking. This involves maintaining safe inventory levels and managing product expiration to decrease waste and confirm availability. The solution lies in precise data reporting and increasingly automated inventory management practices.
   
4. Reexamine supplier relationship management. Quality and consistency in supplier relationships and payments can be vital. Issues such as invoicing, payment delays and contract management can further disrupt supply chains, leading to delays in essential supplies.
   
5. Tap into the power of ongoing digital transformation and automation. Many healthcare organizations struggle with disparate systems that don’t communicate, resulting in inefficiencies and increased risk of human error. There is clearly a need for a structured approach to digital transformation to enhance data integration and operational efficiency. This includes leveraging real-time analytics and machine learning so you can make informed, in-the-moment decisions.
   
6. Focus on cost management. Reducing costs while maintaining efficiency is often a constant pressure. This includes managing contract life cycles, enhancing inventory levels and establishing cost-effective procurement practices. Focus on achieving significant cost savings through tech-enabled inventory management, reduced waste and efficient procurement practices.

How Workday and PwC can help

Workday offers holistic digital solutions to help address the healthcare sector’s supply chain challenges through innovative, unified approaches:

1. Integrated systems: Workday provides a flexible platform that can integrate well with other integral systems, including Epic, to help streamline supply chain operations. This integration can reduce reliance on multiple spreadsheets and manual processes, decreasing errors and enhancing efficiency.
2. Data-driven decision making: By leveraging real-time analytics and machine learning, Workday empowers many healthcare organizations to make informed decisions based on precise, real-time data. This includes setting desired inventory levels and reorder points, which can drastically prevent waste, as well as forecasting demand more effectively.
3. Enhanced supplier management: Workday's customizable solutions can facilitate better supplier relationship management by automating contract management and improving communication with suppliers. The result is often timely payments and consistent supply of necessary products.
4. Operational efficiency: PwC's subject matter experience in supply chain operations helps healthcare organizations implement industry-leading practices and standardize processes. This includes cycle counting and product rotation to maintain inventory efficacy and safety—and tech training and change management tailored to specific organizational needs. What’s more, our tailored supply chain management systems can simplify supplier searches and requisition creation for faster delivery.
5. Cost savings: By enhancing supply chain operations and improving contract management, Workday and PwC helps many healthcare organizations achieve significant cost savings through a combination of inventory management, reduced waste and efficient procurement.
6. Future-ready solutions: According to PwC’s June 2024 Pulse survey, 73% of executives say they will use GenAI to help make changes to their company’s business model. Workday and PwC are aligned with this finding and deeply dedicated to ongoing innovation and improvement. By continuously leveraging and advancing Workday’s AI capabilities, we can enhance supply chain resilience, efficiency and flexibility. This empowers organizations to provide industry-leading patient care by helping guarantee the ideal products and services are available at the desired time and cost.

The collaboration between Workday and PwC ultimately equips those in the healthcare sector with an innovative toolkit to overcome supply chain hurdles, helping confirm that essential products arrive precisely when and where they are needed. This dynamic collaboration does not just help streamline operations; it can elevate the standard of patient care. By embracing this innovative framework, healthcare providers can be better equipped to face future challenges with renewed confidence and agility, setting the stage for a healthier tomorrow.