Supply Chain Resilience is Bigger than the Purchasing Department

Last month, the Healthcare Industry Resilience Collaborative (HIRC) held its inaugural HIRC Academy in Carlsbad, California. Present were supply chain leaders from large providers (hospitals) and from large suppliers (MedTech, Pharma, distributors, etc.). Supply chain leaders were there to celebrate the industry’s work to establish standards and certifications for healthcare supply chain resiliency - and to discuss in a forum of passionate, but usually adversarial (buyers and sellers), individuals, how we promote resilience in the healthcare supply chain. I was there as the proud representative of the first medical device manufacturer to receive an Enterprise Gold award – a Gold award covering all of the companies activities. I am not a supply chain executive myself, but rather involved in marketing, strategy, and corporate leadership. I have had to learn a lot about the healthcare supply chain, about the mentality of healthcare supply chain leaders, and about the challenges of our current spike in supply chain disruptions – specifically about what these mean in terms of the healthcare facility’s ability to provide the proper care for patents, where and when they need it.

HIRC is the foremost organization to promote our focus on resilience in the healthcsre supply chain. And the fact that its leadership has successfully brought together buyers and sellers (providers and suppliers) is very impressive, and a testament, I think, to the shifting mindset of a healthcare supply chain that is increasingly in the “hot spot”: We all know we have to get better at healthcare resilience. HIRC addresses the need for suppliers to map their suppliers and create redundancies in their supply chain, to provide efficient communication about supply chain disruptions, to have a business continuity plan in place, to provide service level reports, addressing backorders and recalls, and more. HIRC works under the assumption that standards in these areas will go a long way towards ensuring service disruptions in healthcare are avoided or at least ensuring that their impact is minimized and addressed in a timely and effective manner.

Supply chain resilience has been a key concern since the pandemic. More and more often, hospital purchasing professionals are experiencing backorders or limited availability for key devices or pharmaceuticals used to treat patients – and service line leaders are experiencing disruptions in their ability to provide proper patient care.

Supply chain resilience has been a key concern since the pandemic.

For years, the primary concern for healthcare facilities has been to drive down costs. And this has been achieved to the point where most supply chains are so leaned out that even small events can threaten supply chain resilience. This is because most (but not all) initiatives that reduce healthcare supply costs also reduces healthcare supply resilience. Think about the popularity of single-source contracts: Providers are often successful in securing lower prices by signing sole-source agreements. But the consequence is that when supply chain disruptions occur, switching to substitute products is complicated. In other cases, suppliers increased prices and introduce new technologies, often of proprietary designs that do not allow switching to other suppliers’ products. Efforts to improve delivery models through staff reductions and cost efficiency changes have proven to be insufficient to offset these. Many healthcare facilities have been successful in reducing costs in the supply chain, but it has come at a significant cost in terms of the resilience of the supply chain. The Symplr 2026 State of Healthcare Supply Chain Survey showed how while healthcare supply chain leaders in 2024 found cost savings to be the top challenge, in 2025, this had switched to supply chain disruptions. In 2026 – disruptions and cost savings share the top spot as the foremost healthcare supply chain challenge.

Most efficient supply chains are not built to be resilient; they have been built to minimize costs. There is a trade-off between cost reduction and supply chain resilience – a trade-off that shows itself in times of disruption, such as the pandemic, but also in times of war, climate challenges, and raw material challenges. And health systems carry a substantial part of the blame for the fragile nature of the supply chain – because they have leaned it out in their search for cost reductions.

The most important lesson I learned from HIRC academy is that healthcare supply chain resilience is far too important to leave with the supply chain professionals. Healthcare supply chain resilience measures the ability of the healthcare provider (the hospital) to avoid or mitigate disruptions to its supply of medical devices and pharmaceuticals – so that the provider can always provide the proper care for its patients. Healthcare supply chain resilience is usually associated with ensuring transparency into the suppliers’ supply chains, instituting business continuity plans, establishing efficient communication practices, creating redundancies (larger, more local inventories, multiple suppliers, etc.), and creating assurance against backorders.

Healthcare supply chain resilience measures the ability of the healthcare provider (the hospital) to avoid or mitigate disruptions to its supply of medical devices and pharmaceuticals – so that the provider can always provide the proper care for its patients.

In other words: Healthcare supply chain resilience has largely been defined as a manner of optimizing the logistical, informational, contractural, and fulfillment aspects of the supplier-provider relationship. As a result, healthcare supply chain resilience has been considered to be the domain of the health system’s supply chain office.

However, these are merely a fraction of the elements that determine a healthcare supply chain’s vulnerability. Other elements – elements that the supply chain office typically does NOT consider – including product design, portfolio management, lifecycle management, marketing practices, and product bundling – even more fundamentally contribute to a vulnerable supply chain. HIRC community members should include these in the agenda:

1. More and more devices are designed to be single-use – in some cases replacing devices that have been reusable for decades. While it makes sense that syringes, for example, are single-use, I would argue that designing and labeling cables used in the electrophysiology lab as single-use is not only unnecessary, but a threat to the resilience of the supply chain, the cost structure of the lab, and the environmental sustainability of healthcare. In terms of resilience, when single-use devices go on back-order, procedures get cancelled. When reusable or reprocessable devices go on back-order, the supplies do not immediately get affected. The healthcare supply chain does not typically favor reusable products and other circular solutions that have a direct impact on resilience. 
   
2. MedTech marketing and sales aggressively push the newest, most expensive devices to hospitals, while doing everything they can to prevent re-use, for example through reprocessing. In some labs, manufacturer reps will remove devices after a procedure and take them with them, threaten to withdraw support from procedures where reprocessed devices are used, force the labs to buy new (although reprocessed devices are available) through volume contracts, etc. In other cases, “environmental programs” are put in place to recycle devices – thereby preventing re-use, blocking the much larger carbon impact reduction from reprocessing – and creating vulnerabilities for the supply chain.
3. MedTech manufacturers target fast-growing service lines for accelerated innovation and shorter product lifecycles. They do this because every new generation of a device is associated with a price increase – the shorter the lifecycles, the more frequent the price increases, and the higher the profits. However, hospitals that quickly adopt new technologies can expect that supply chain disruptions will have an impact on patient care – new technologies have fewer substitutes.
4. Suppliers tend to design and launch new products whose use is predicated on compatibility with other devices or assets in that company’s portfolio. The supplier’s new ultrasound catheter may be compatible with only that same supplier’s generator and other devices used in the same procedure. By focusing on limited compatibility rather than an “open platform” approach, the supplier reduces choice and supply chain resilience (lack of substitutes during times of disruption). Supply chaon officers have little power to address these issues, that are really results of the suppliers’ design strategies.
5. MedTech and Pharma marketing and sales are notorious for abusing clinician relations (yes, “consultant” clinicians is still a means of taking hostages in healthcare), exclusive training, technical support, access to other products, and lack of transparent pricing to lock in hospital service lines to specific product utilization that limits choice and maximizes supplier profits. All these techniques increase supply chain vulnerability, but are rarely addressed by healthcare supply chain officers, who often find themselves with limited options due to legacy “business as usual” practices.
6. Finally, product bundling is a common practice in healthcare purchasing: “I’ll give you a reduced price on product A if you commit to purchasing product B”; “I’ll give you this generator for free if you commit to buying X amount of disposable devices from me”; Only if you buy product A can I sell you products C and D”; “If you want my technical support, you have to use my devices”. These are all common bundling practices, and while most or all of these are illegal, they are common in healthcare contracting. While product bundling should be addressed by supply chain officers, they are typically legal or strategic challenges addressed at a different level.

I am sure I am missing other non-supply-chain elements of healthcare supply chain vulnerability. Healthcare supply chain resilience is about our ability to provide proper care for our patients when they need it. Supply chain resilience is far too important to leave with the supply chain guys. I encourage health systems to elevate the resilience issue to a corporate strategy level and involve officers from other functional areas as well. Alternatively, HIRC as well as US health systems should broaden their scope to address the entirety of the resilience challenge, not just its symptoms. Most healthcare supply chain leaders I know are very strategically minded individuals with this capability.