Overcoming Healthcare Supply Chain Management Challenges in 2024

Blog Posts  |  26 April 2024

Written by: Mary Jo Ellis, AVP Product Manager, Veradigm

Small inaccuracies can lead to big issues. Two researchers discovered a critical problem with the product inventory at the Alabama hospital where they worked: discrepancies in records led to overstock of some supplies and daily shortages of others. For this facility, the records failed to account for almost $500,000 per year of medical supplies—a patient reimbursement value of about $2 million annually.1

Inventory inaccuracies are a common supply chain issue for hospitals around the US. And supply chain problems add up. A Navigant survey revealed that US hospitals lose $25.7 billion annually from unnecessary spending on supply chain products and related operations and procedures.2

However, this dilemma is not unsolvable. With the right tools, hospitals can bring transparency and order to supply chain management. Here, we will cover how hospitals can use comprehensive enterprise resource planning (ERP) software to solve supply chain management challenges for more efficient, agile, and cost-effective operations.

Digitizing inventory brings visibility

Tracking inventory across the supply chain can be challenging for hospital departments and materials managers. In a busy facility, there are many opportunities for inventory to be recorded incorrectly or go missing, such as getting lost in transit from the receiving dock to the ordering department, transferring supplies between locations, or missing expiration dates to reduce supply waste.

Lack of transparency in an inventory system can cause problems even before medical supplies reach the point of care. Although some available software may give insights into where inventory is during shipping and warehousing, it does not provide real-time data for when the delivery of critical supplies are delayed. In contrast, inventory visibility throughout the supply chain, enabled by ERP software, helps hospitals track the chain of custody of supplies once the hospital takes possession through delivery to the ordering department.

Digitizing inventory processes brings visibility to each part of the supply chain. Veradigm ERP software can be loaded onto hand-held devices so staff across the supply chain can access the system for inventory searches, cycle counts, on-hand quantity searches, and pick tickets. All the staff can perform routine cycle counts for supply storage on their floors or inventory in specialty areas such as operating rooms or cath labs by using the same system on mobile devices to record inventory. The software can interface with hospital information systems (HIS) or electronic medical records (EMR) systems to provide critical information to the HIS and EMR, streamlining patient care documentation and item usage details.

All inventory data is gathered in a central location, providing hospitals with a single source of truth for the products moving through their supply chain. There is no need to reconcile multiple records to find discrepancies—with this solution, hospitals can address inventory issues in real time before major problems occur. Digitized inventory provides visibility to ordering, tracking deliveries, and monitoring on-hand supplies.

Touchless buying simplifies procurement

Buying supplies for a hospital is a complicated, time-consuming process. From submitting requisitions to drawing up contracts and processing purchase orders, procurement procedures may vary by department and require input from multiple parties using disparate systems, which often require manual processes. The automation that an ERP system introduces saves staff time, reduces cost, and ensures accuracy throughout the procurement and payment processes.

Veradigm’s ERP solution can help reduce the administrative burden of procurement and payment. The Veradigm ERP software provides defined rules and cloud-based transactions to automate the buying and payment processes. Less time spent on procurement to payment processes frees staff to focus on value-adding tasks, such as finding new ways to improve patient care.

Adapting during supply chain disruption

Geopolitical issues, labor talks, high freight demand, and capacity fluctuations all put medical supply chains at risk for disruption.3 Sourcing medical supplies from a single provider can put hospitals in danger of running out of the products patients need if shipments are delayed or canceled. However, hospitals may not have the staffing or tools to find alternative sources, much less negotiate competitive pricing.

One solution to mitigating supply chain disruption risk is Veradigm’s ERP alternate sourcing options. Instead of manually researching alternatives to unavailable medical supplies, hospital staff can use Veradigm ERP to identify and enter acceptable substitutions. The software then directs sourcing decisions to which supplies are available, saving staff time and ensuring patients and care teams have access to what they need even with hiccups in the supply chain.

Analyzing spending for savings opportunities

Government reimbursement has not kept up with increases in hospital expenses, meaning many hospitals are now operating at a financial loss.4 Analyzing supply chain spending to find cost-saving opportunities is critical to keeping hospitals open to care for patients and communities.

However, using multiple software systems across departments to record expenses complicates an organization’s ability to analyze spending. In other words, getting a bird’s-eye view of where money is going is difficult when the landscape is blanketed in fog. Working with a fragmented supply spend information also makes it difficult to see whether contracts are optimized for cost savings.

Incorporating the Veradigm ERP software system helps hospitals track total spend and contract coverage. When the view is clear, it is easier for organizations to improve—fixing contract problems and identifying opportunities to save costs and standardize supplies to leverage better pricing. Veradigm ERP provides actionable insights and analytics to help hospitals reduce unnecessary spending.

A single solution for many supply chain challenges

Supply chains for healthcare organizations are complicated, but managing them doesn’t have to be. Veradigm’s ERP solution helps hospitals reduce the risks of supply chain disruptions by automating manual processes, increasing inventory visibility, and providing invaluable insights into spending. Veradigm’s solution provides hospitals with a single system for many different problems (Table 1).

Table 1. Software solutions to hospital supply chain challenges

Supply chain challenge Veradigm ERP solution
Inaccurate inventories Digitizing inventory for real-time management improves accuracy
Labor-intensive, error-prone manual processes for recording inventory Mobile applications and hand-held devices equipped with software help staff complete inventory tasks efficiently and accurately. Also, built-in workflow and business rules streamline processes
Siloed procedures slow the procurement process Automating procurement through defined rules and cloud-based transactions
Maintaining critical medical supplies during supply chain disruptions Alternate sourcing helps hospitals pivot during disruptions
Managing spending and contracts Combining data into a central depository allows spending analysis and provides insights into savings opportunities

Ready to regain control of your supply chain? Connect with us to learn how Veradigm ERP software can help you reduce the risk of hospital supply chain disruptions and identify areas of unnecessary spending.


  1. Neve BV, Schmidt CP. Point-of-use hospital inventory management with inaccurate usage capture. Health Care Management Science. 2021;25(1). doi:https://doi.org/10.1007/s10729-021-09573-1
  2. Balkhi B, Alshahrani A, Khan A. Just-in-time approach in healthcare inventory management: Does it really work? Saudi Pharmaceutical Journal. 2022;30(12). doi:https://doi.org/10.1016/j.jsps.2022.10.013
  3. Avila L, Garland M, Salgado A, Stroh K. 8 logistics trends to watch in 2024. Supply Chain Dive. Published January 30, 2024. Accessed April 2, 2024. https://www.supplychaindive.com/news/8-logistics-trends-to-watch-in-2024/705106/
  4. The financial stability of America’s hospitals and health systems is at risk as the costs of caring continue to rise. American Hospital Association. Published April 2023. Accessed April 3, 2024. https://www.aha.org/system/files/media/file/2023/04/Cost-of-Caring-2023-The-Financial-Stability-of-Americas-Hospitals-and-Health-Systems-Is-at-Risk.pdf
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