The healthcare supply chain is at a crossroads—balancing cost, efficiency, and patient care in an increasingly complex landscape. Traditional models focused on operational logistics must evolve into strategic frameworks that prioritize adaptability, technology integration, and value-based decision-making.

As healthcare organizations face workforce constraints, regulatory shifts, and unpredictable supply disruptions, leaders must rethink their approach. Supply chain is not just a support function—it is a catalyst for long-term success.

These entities must be cautious in overcorrecting their strategies based on headlines, tariffs, and other short-term events that detract from establishing a resilient strategic plan for optimizing the global supply chain and partnering with vendors. A clearly defined mission and values lay the foundation for a supply chain organization to define its strategic roadmap to excellence in supply chain operations and strategic planning.

Key Insights

• From Cost-Centric to Value-Driven – Organizations must move beyond cost-cutting and embrace total value models that factor in quality, reliability, and supplier partnerships.
• Technology as a Force Multiplier – AI-driven analytics, predictive modeling, and automation aren’t futuristic—they are essential today. Harnessing these tools can transform procurement, inventory management, and contract optimization.
• Resilience Over Efficiency – Efficiency is crucial, but resilience ensures supply continuity in times of crisis. Diverse sourcing strategies, real-time visibility, and proactive risk management will define the next generation of successful healthcare supply chains.

Moving from Cost-Centric to Value-Driven Supply Chains

The price at the pump, which focuses on product costs, is one way to assess the impact that Supply Chain departments have on their ability to bring value to a healthcare system. While the lower price points feel good, continuing to focus on the lowest-cost items tends to be short-sighted when trying to develop a resilient supply chain strategy, because at some point, price can only be driven so low; purchase volume and spend commitment must be factored in to keep pricing low.

Value in supply chain purchases encompasses not only price but also benefits such as technology, data metrics, and benchmarking, as well as guaranteed stock and fill rates. These items add value to a supply chain by securing the product, even in constrained situations, or by ensuring quality metrics to ensure the products are being utilized appropriately, thereby offering the desired outcome in patient care.

When factoring aspects such as these into the overall value of spend dollars, partnerships with the vendor community become significantly more valuable in moving the needle towards the total value of care.

Industry-leading examples:

• Cleveland Clinic: Shifted from a cost-cutting approach to a value-based model by forming long-term supplier partnerships that guarantee stock availability and quality metrics.
• Kaiser Permanente: Integrates environmental and social impact into purchasing decisions to align supply chain investments with broader healthcare goals.

Technology as a Force Multiplier

One plus one can equal three when technology is introduced, allowing highly skilled Supply Chain employees to perform further analysis and reclaim time from manual and redundant tasks to support greater patient care.

The utilization of technology—from bar code automation and third-party systems for bill-only requisitions to AI integration into contract reviews—can advance the supply chain and create efficiencies never seen before.

Highly effective supply chains begin with data, and the integrity of this data sets the stage for effective analytics and report review to identify opportunities for savings, impact, and help prevent product outages. Technology and AI should be embraced, not feared. However, it is critical to have a well-defined vetting process to ensure the selected tools align with organizational value goals—not just shiny objects.

Technology in action:

• Mayo Clinic: Employs predictive analytics to anticipate supply needs, reducing waste and ensuring supply availability.
• Mount Sinai Health System: Uses AI-driven contract reviews to streamline procurement and improve financial efficiency.

Resilience Over Efficiency

The buzzword from COVID was “supply chain resilience.” Often equated with production or storage redundancy or substitute product lists, these concepts remain relevant today.

Many manufacturers still face challenges—shipping delays, raw material shortages, and labor disruptions. The days of sole sourcing may be nearing an end due to global instability. During the pandemic, health systems bypassed traditional procurement to secure PPE, proving the need for diversified sourcing strategies.

A mature supply chain includes multiple sourcing opportunities and builds redundancy within product pools. Partnering with manufacturers and distributors can help identify vulnerabilities and create a reliable value proposition.

Geisinger Health provides a leading example, moving away from sole-sourcing critical supplies to mitigate risks tied to global and logistical disruptions.

Resilience must also apply to the labor force. Developing supply chain team capabilities and recruiting top talent are essential strategies. Staff resilience should be integral to any long-term planning effort.

Call to Action

Healthcare supply chain leaders must move beyond traditional models and embrace transformation that is proactive, collaborative, and innovation-driven. Strategic resilience isn’t a singular effort—it requires alignment across all stakeholders.

For Healthcare Executives:

• Foster leadership commitment to integrated supply chain strategies aligned with financial sustainability, high-quality patient care, and workforce development.
• Push beyond short-term cost concerns and make long-term resilience a priority.

For Supply Chain Teams:

• Embrace technology as a tool for efficiency and intelligence.
• Utilize AI-driven analytics to anticipate disruptions and strengthen supplier partnerships.
• Prioritize data integrity and real-time visibility.

For Vendors & Manufacturers:

• Go beyond transactional relationships—build partnerships focused on transparency, reliability, and innovation.
• Collaborate with health systems to address sourcing challenges and improve product availability.

For Policymakers and Regulators:

• Support stable, ethical, and adaptable global supply chains.
• Remove barriers to procurement flexibility and supplier diversification.

For Consultants & Change Leaders:

• Guide healthcare organizations through transformation with strategic vision and operational insight.
• Help build future-proof supply chain solutions that ensure patient and financial outcomes.

This is the moment to reshape the healthcare supply chain into a force for resilience, efficiency, and long-term success. The work ahead requires partnership, foresight, and bold action. Let’s lead the way.

Healthcare leaders who refine their sourcing strategies for non-acute spaces will unlock opportunities for increased efficiency and profitability.

How to explore? Connect with us at SCM Professionals.

For more insights into the future of healthcare operations and supply chain strategy, explore other thought leadership content at SCM Professionals.