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Envisioning the Healthcare Supply Chain through Innovation and Sustainability
Written by: Peeyush Kaushik, VP and Head of Healthcare Innovation Center, Philips Indian Subcontinent
Bringing together many moving parts in a choreographed ballet of products, suppliers, pathways and end customers, the healthcare supply chain is a vital cog in the overall healthcare ecosystem. As such, the supply chain represents immense opportunities to not just build up efficiencies but to also improve the environmental performance of the many organizations that comprise it.
Tackling climate change could be the greatest global health opportunity of the 21st century. And it still is. Fortunately, Indian health leaders are increasingly recognizing this potential, as well as the crucial role environmental sustainability plays in achieving long-term population health goals. According to Future Health Index India 2023 report, 99% of them are taking some form of initiative to address environmental sustainability. However, Indian healthcare leaders also face challenges in implementing their environmental sustainability initiatives. Some of the most frequently cited challenges include the lack of specific regulation (40%), lack of time (30%), implementation strategies (29%), appropriate technology (29%) and staff interest (29%). That said, if healthcare were a country, it would be the world’s fifth-largest emitter of CO₂, accounting for over 4% of global emissions – more than the aviation or shipping sectors.
Planning for better supply chains
In addition to driving sustainability, there is a need to change the way we plan our supply chain. Supply chain management technology must integrate the best of Artificial Intelligence, Data Science and Computer Vision to accurately track the supply chain and present indications of when and where things are likely to go wrong. As different components have different lead times and consumption patterns, use of technology will forewarn managers of upcoming challenges and help them take remedial measures.
Net-zero across the value chain
None of the above will account for much if we don’t improve the environmental performance of our suppliers even as we look to deliver better care to patients.
Encouraging disclosure and tracking of environmental performance and climate maturity along with sourcing from and incentives for suppliers committed to innovation in science-based carbon reduction will greatly help in the drive towards sustainability. Helping and guiding suppliers (in collaboration with partners like World Business Council for Sustainable Development or Carbon Disclosure Project) in advancing climate action and providing opportunities for decarbonization are some of the other steps that can be taken. In 2021, Philips provided guidance to 89% of its strategic suppliers on achieving cost effective carbon reductions. Today, 40% of its suppliers (based on spend) are now committed to science-based targets for CO₂ reduction. Philips also partners with suppliers to transition to renewable electricity. With supply chains spanning the globe, Philips is one of 19 global brands signed up to the coZEV initiative’s 2040 zero-carbon ocean shipping ambition.
Governments too can stimulate green approaches to supply chain operations through clear regulations and the setting of clear standards, rules, and guidelines to ensure decarbonization across all players. Increased involvement of the public sector and regulators can lead to better ESG performance and reporting, including purchase decisions.
Trade organizations, including those in healthcare, can also play a key role in harmonizing sustainable public procurement practices. Research partners can advocate supplier sustainability, making decarbonization ‘the new normal’ for companies active in the extended supply chain for the healthcare industry.
Ultimately, the goal should be to progress towards a circular economy. In circular procurement, the right choices are taken early in the product creation process so that materials and components are suitable for refurbishment and re-use at the end-of-life. If done right, the move towards a circular economy through sustainable means will have a disproportionately positive impact on the health and well-being of patients.