Healthcare supply faces huge challenges amidst operational complexities and pressure to meet customer demand, but an acceleration of digitization is helping to rewrite the results.

While the medical supplies sector was already making moves towards digitization, progress was slow in what has typically been seen as a traditional business community. When Covid-19 came along, it would create immense challenges for the entire healthcare industry and, in turn, rapidly accelerate the impetus for digitization amidst an urgency to restructure supply chains on a more robust foundation of operational resilience, agility and efficiency.

Now approaching two year into the pandemic, that urgency has not subsided. In fact, as the Covid-19 crisis has endured, it has exposed deeper flaws in global supply chains, revealing the sheer extent at which organizations need to streamline their business processes and seek to remove silos that have substantiated over the years through the deployment of disparate systems. It is also increasingly apparent that disruption and volatility will be no short-term trend – all parts of the supply chain must be better at planning for the unknown.

This new reality has caused a significant degree of geographical diversification, which has realigned the global supply chain environment as organizations seek to be physically closer to their customers. A study by the Economic Research Institute for ASEAN and East Asia found that 43% of organizations were considering changing their production locations last year. Some 63% said they had taken efforts to reduce costs in their supply chain, while 53% said they needed to rebuild their relationships with a customer and 35% with their suppliers.

“We’ve seen great diversification in the geographic of where our customers are working and how they are working with their suppliers and customers,” says Arthur Fernandez, Chief Growth Officer at Jcurve. “We’re seeing a relocation and simplification of supply chains, supported by technology. Long gone are the days of operations within one particular country. It’s now about diversifying to smaller operations across more geographic locations.”

Optimizing production

Every industry now requires the operational agility to keep up with ever-evolving customer expectations, but the hyper-competitive healthcare supply market also has to contend with a regulatory landscape that can slow down the ability of organizations to fulfil customer demand. Technology is the core enabler of agility, and there are two notable innovations gaining pace in the supply chain to accelerate and improve medical production processes.

Industrial 3D printers, firstly, have advanced to just a degree that they can now handle rapid prototyping and small-scale orders without sacrificing quality, which wasn’t possible before, enabling organizations to have small quantity production and easier product differentiation. Small-scale production is more suitable for more localized supply chains, enabling manufacturing to be closer to customers, and it requires less labor which reduces costs.

The other technology transforming supply chains is robotics, which drives enormous manufacturing efficiencies through automating routine processes. By freeing up humans to focus on higher-value tasks, it also accelerates other innovations which can power agility.

“We’re seeing a lot more organizations talk to us about robotics and 3D printing, and more specifically how they can enhance and optimize their supply chain,” says Fernandez. “The real foundational technology in a resilient, agile medical supply chain, however, is cloud ERP. Managing and integrating the various data sources across your channels and products is crucial. It’s not only about geographical priorities and data management or security, but also how you’re using that data to enhance your business, and how your people interact with that data in their daily operations. ERP is central to all of that, managing multiple key areas, including finance, CRM, manufacturing and production, in one solution.”

A journey to agility

ERP has been invaluable to the ability of JD Healthcare to respond to supply chain challenges, and indeed changing customer expectations during the pandemic. JD Healthcare has been regarded as a pioneer of safe manual handling equipment in Australia, with air assistant transfer devices which help transport patients in healthcare environments. Keeping a breadth of the latest market movements has required a savvy approach to IT.

The company’s ERP journey with Jcurve stretches back a number of years, initially on Jcurve ERP for small businesses, but it evolved significantly last year when it entered a period of expansion. For most of its 23-year journey, JD Healthcare utilised a diverse distributor network to distribute our products. This is because of Australia’s unique geography – a very low population density across a continent the size of Europe. With just a handful of cities home to the majority of the population, it’s difficult for one company to be effective in every state, so JD Healthcare worked with a good distributor in every single one.

The feedback from JD Healthcare’s private hospital network, however, was that this approach was creating inefficiencies and complexities in the supply chain. The same products had different product codes for different locations, and quite often different prices too. It was clear that JD Healthcare’s customers wanted just one company to deal with nationally, so the company merged with two of its partners to become one national footprint.

Upgrading from Jcurve ERP to the enterprise-standard NetSuite ERP, partnered with Jcurve, was crucial to the merger and providing the functionality and integration to scale into one efficient and agile national operation. In just one example, the ERP has enabled JD Healthcare to employ a barcoding and scanning capability in its warehouse. All products that come in are scanned into the system, while outgoing orders get the same treatment. If the wrong product is scanned, or not connected to the purchase order, the system has the capability to indicate as much, which has not only reduced costs but also inaccuracies.

“Inaccuracies cost all businesses money, but in our industry it can be much more than that because it could cost the health, wellness or even life of a particular patient,” says Etienne Reiss, Managing Director at JD Healthcare Group. “Another key element is that we deal with a lot of different suppliers and manufacturers all over the world so it’s important to have a system that supports multi-currency availability. It has made us not just a better organization but a more credible one, and it has been a remarkable journey with Jcurve.

“I just can’t imagine that we would have seen the great progress that we’ve seen in our organization over the last 18 months if we didn’t have the backing of a good ERP system. We don’t know what the future is going to look like but with the power of our ERP system we can take the lessons learned from the Covid era and understand where our businesses can be strengthened further, both operationally and how we communicate with our customers.”