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Healthcare Supply Chain Management Market Size, Share & COVID-19 Impact Analysis, By Component (Software, Hardware, and Services), By Delivery Mode (On-premise, and Cloud-based), By End User (Healthcare Providers, Healthcare Manufacturers, and Others), and Regional Forecast, 2021-2028

Region : Global | Format: PDF | Report ID: FBI101051

 

KEY MARKET INSIGHTS

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The global healthcare supply chain management market size was USD 1.87 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with healthcare SCM witnessing a positive impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 11.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 2.14 billion in 2021 to USD 5.40 billion in 2028 at a CAGR of 14.2% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


Healthcare supply chain management signifies the system and processes involved in streamlining operations in the healthcare system. An analysis by Navigant Consulting estimates that hospitals could save an average of 17.7 percent or USD 11 million per hospital annually by streamlining and standardizing their supply chain processes. This is anticipated to raise the demand for supply chain management software and services during the forecast period. Additionally, strategic collaborations and acquisitions among key players and hospitals have led to the higher deployment of SCM solutions. For instance, in February 2020, Proship Inc collaborated with JDA software Inc. with an aim to eliminate high shipping costs, authorize carrier compliance, increase profit, and improve the visibility of the company SCM. Furthermore, rising customization and surging capabilities of technology are some of the other factors that are likely to foster market growth.


COVID-19 Pandemic Affected Market Moderately Backed by Usage of SCM Software


Due to the unprecedented occurrence of the coronavirus pandemic, the healthcare industry underwent a major setback at the initial stage of the supply chain. A sudden rise in the demand for medical masks, gloves, sanitizers, and medicines due to an increase in the number of COVID-19 infections led to an imbalance in the industry, thereby disrupting the standard supply chain. However, this forced providers and manufacturers to adopt the SCM software to streamline the process. Implementing mitigating measures amid the pandemic helped the companies to overcome their supply chain issues. Therefore, the coronavirus pandemic has had a moderate effect on the market share and is anticipated to result in strong growth during the forecast period.


LATEST TRENDS


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Adoption of Blockchain in Healthcare Supply Chain Management is a Vital Trend


In healthcare SCM, blockchain technology transactions are a crucial monitoring technology for tapping into the entire process of medicine and medical products movement. Since all transactions are recorded onto the ledger, and each node within the blockchain maintains a record of the transaction, it is easy to verify the origin of the drug, the seller, and the distributor instantly. For instance, in August 2019, Pfizer and Biogen-led organization Clinical Supply Blockchain Working Group (CSBWG) completed a proof of concept project for a digital inventory and event tracking record in the pharmaceutical clinical supply chain.


Furthermore, the blockchain’s distributed ledger allows healthcare officials and physicians to ascertain and authenticate suppliers' credentials. In this regard, blockchain technology holds a great promise for establishing a trusted network of vendors that allows healthcare administrators to guard patients against disreputable suppliers. Additionally, this technology promises significant enhancement on demand forecasting, data provenance, fraud prevention, and transaction.


DRIVING FACTORS


Increasing Usage of SCM Software to Boost Growth of Market


Healthcare SCM consists of all activities allied with manufacturing, procuring, storing, and transportation of different product types, such as surgical supplies, medical devices, and pharmaceuticals. The increased adoption of the software-based system is expected to augment the growth of the market owing to the advantage of the management of multiple processes on a single platform. The software system is highly convenient compared to hardware systems due to the increasing number of online purchases and a growing preference for eco-friendly logistics. For instance, according to a survey conducted by Sage Growth Partners in 2019, around 86% of respondents said that the adoption of SCM software could improve care quality and profit margin. Additionally, the software also supports hospitals and medical practices to adhere to and deliver value-based care, thereby driving the healthcare SCM market growth.


The Emergence of Cloud-based Solutions to Propel Market Growth


Companies worldwide have realized the potential of applying cloud-based solutions into their supply chain strategies and activities to increase proficiency and profitability. For instance, Hybrent SCM software launched an affordable, cloud-based procurement and inventory management system for post-acute care organizations (LTC/SNF), physician clinics, and ASCs. In addition, sterling’s technology, known as ACXSS, is a reasonable cloud-based supply chain management solution that streamlines the purchasing process for the healthcare industry and is designed to meet the specific needs of health systems. Thus, the launch of advanced cloud-based solutions is one of the major factors contributing to market growth.


RESTRAINING FACTORS


Inadequate Data Collection and Value Analysis to Limit Market Growth


Inadequate data collection and value analysis serve as a setback for the growth of healthcare SCM. Precisely capturing and analyzing data, along with the availability chain, can help bring costs down, stabilize inventory, reduce waste, deliver better information on product needs, and improve risk management strategies. However, the supply chain still contains certain steps that have to be manually operated. At the same time, the lack of reporting, modeling, and knowledge gathering can obstruct growth. Many hospitals nowadays are still using an automatic system to track inventory in real-time and are manually counting inventory. Healthcare organizations are being indecisive about adapting to SCM solutions due to the handling of large amounts of data and security concerns resulting in a hindrance in the growth of the global market.


SEGMENTATION


By Component Analysis


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Developments in Software Platforms to Propel Services Segment


Based on components, the global market is segmented into software, services, and hardware. The software segment dominated the market in 2020 due to the increasing adoption of SaaS, which provides next-generation cloud computing applications. Furthermore, a shift in the trend towards value-based care in developed countries, coupled with the upsurge in the need for efficient management of structural workflows in healthcare companies, are a few factors propelling the segment's growth.


On the other hand, the services segment is likely to grow at the highest CAGR during the projected time frame. Factors such as developments in software platforms and new software launches are anticipated to spur the demand for healthcare SCM services. The hardware segment is likely to witness substantial growth during the projected period owing to the rising penetration of SCM in healthcare hospitals and institutes.


By Delivery Mode Analysis


Adoption of Cloud Computing Solutions to Boost Cloud-based Segment’s Growth


Based on the delivery mode, the global market is categorized into cloud-based and on-premise deployment. The cloud-based segment dominated the market in 2020 and is expected to emerge as the fastest-growing segment during the forecast duration. Factors such as the surging adoption of cloud computing solutions by healthcare professionals, technological advancements, cost-effectiveness, and ease of use are likely to boost the segmental growth. Besides, the on-premise deployment segment is projected to unveil steady growth during the forecast timeframe owing to an increase in the adoption of SCM solutions in emerging nations.


By End-User Analysis


Implementation of SCM by Healthcare Providers to Proliferate Growth of This Segment


In terms of the end-user, the market is classified into healthcare providers, healthcare manufacturers, and others. The healthcare providers segment emerged as the dominant segment in the market in 2020. The factor responsible for its dominance is a rise in the incorporation of SCM solutions by various providers, such as hospitals and clinics. Additionally, the implementation of training sessions by software companies is also boosting the adoption of these solutions by providers. For instance, in March 2021, Syft announced the Syft University training program for hospital staff by using the Syft Synergy software for SCM. Moreover, the healthcare manufacturers segment is likely to mark a significant growth during the forecast period due to the slower penetration of SCM solutions in the market.


REGIONAL INSIGHTS


North America Healthcare Supply Chain Management Market Size, 2020 (USD Billion)

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The market size in North America stood at USD 0.96 billion in 2020. The region dominated the global market in 2020 owing to the launch of innovative solutions for supply chain management coupled with the higher penetration of software deployment in the area, majorly in the U.S. For instance, in March 2021, SATO announced the launch of a smart CT4-LX-HC compact desktop printer that helps in the generation of auto-ID, labels, patient ID wristbands, and others. This system will help in minimizing the issues related to firmware and improve the healthcare supply chain.


Europe marked the second position in the market due to the growing awareness among providers and manufacturers regarding the need for healthcare supply chain management. Therefore, the rising penetration of SCM software and services in the region is anticipated to propel the growth of the European countries.


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Moreover, Asia Pacific is expected to show a slight increase in the growth rate owing to the expansion of SCM solutions in developing countries, such as India and China. For instance, amid the pandemic in June 2020, the Council of Scientific and Industrial Research (CSIR) launched a healthcare supply chain portal, ‘Aarogya Path.’ The portal provides real-time data for the availability of medical supplies. Such initiatives are expected to increase the market potential of the emerging nations. However, the rest of the world will have a slower growth rate due to the lesser awareness and adoption of healthcare supply chain management solutions in low-income countries.


KEY INDUSTRY PLAYERS


Implementing Strategies to Maximize Deployment of SCM Solutions to Help Companies Grow


The global healthcare supply chain management market is a fragmented industry with several players aiming to help manufacturers and providers with supply chain management. Companies such as Tecsys Inc., McKesson Corporation, and Spectrum Health are continuously making efforts to reach the maximum customers to expand their SCM solutions and increase adoption. Additionally, mergers and partnerships among key players are also responsible for the growing potentiality of the market. For instance, in April 2021, Tecsys Inc announced that Spectrum Health upgraded the Tecsys healthcare supply chain management solution to grow its supply chain network and warehousing demand. Therefore, the penetration of the solutions and increasing demand for SCM will help leverage the company's growth during the forecast period.


LIST OF KEY COMPANIES PROFILED:



  • Henry Schein, Inc. (Melville, New York, United States)

  • McKesson Corporation (Irving, Texas, US)

  • Oracle (Austin, United States)

  • Ascension (St. Louis, Missouri, US)

  • Advocate Health Care, Inc. (Milwaukee, Wisconsin, US)

  • Tecsys Inc. (Montreal, Canada)

  • Banner Health (Phoenix, Arizona, US)

  • Syft (Tampa, Florida)

  • Ochsner Health System (Louisiana, US)

  • Providence Health Service (Renton, Washington, US)

  • Other Players


KEY INDUSTRY DEVELOPMENTS:



  • June 2020 – Blue Yonder Software signed a partnership agreement with Locus Robotics, a leader in autonomous mobile robots (AMR) for fulfillment warehouses. The partnership aims to accelerate the implementation of innovative warehouse technology solutions offered by both companies and provide Blue Yonder and Locus customers with faster deployments, more accessible, and fully optimized integrations.

  • January 2020 – Tecsys Inc announced a partnership with Microsoft for enabling intelligent retail by using Microsoft Power BI. Power BI is a cloud-based suite of business analytics tools, which allows consumer goods companies and retailers to gain better insights into their customers by providing an intelligent supply chain.


REPORT COVERAGE


An Infographic Representation of Healthcare Supply Chain Management Market

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The healthcare supply chain management market research report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, components, delivery mode, and end-users. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses significant factors contributing to the market's growth in recent years.


Report Scope & Segmentation


















































  ATTRIBUTE



  DETAILS



Study Period



  2017-2028



Base Year



  2020



Forecast Period



  2021-2028



Historical Period



  2017-2019



Unit



  Value (USD Billion)



Segmentation



  Component; Delivery Mode; End User; and Geography



By Component




  • Software

  • Hardware

  • Services



By Delivery Mode




  • On-Premise

  • Cloud-Based



By End-User




  • Healthcare Providers

  • Healthcare Manufacturers

  • Others



By Geography




  • North America (By Component, By Delivery Mode, By End-User, By Country)







      • USA (By Component)

      • Canada (By Component)





  • Europe (By Component, By Delivery Mode, By End-User, By Country)



      • UK (By Component)

      • Germany (By Component)

      • France (By Component)

      • Italy (By Component)

      • Spain (By Component)

      • Scandinavia (By Component)

      • Rest of Europe (By Component)





  • Asia Pacific (By Component, By Delivery Mode, By End-User, By Country)



      • Japan (By Component)

      • China (By Component)

      • India (By Component)

      • Australia (By Component)

      • Southeast Asia (By Component)

      • Rest of Asia Pacific (By Component)





  • Rest of the World (By Component, By Delivery Mode, By End-User, By Country)



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 1.87 billion in 2020 and is expected to reach USD 5.40 billion by 2028.

In 2020, the North American market value stood at USD 0.96 billion.

The market is expected to grow at a CAGR of 14.2% during the forecast period (2021-2028).

The software segment is expected to lead this market during the forecast period.

The growing awareness about the need for SCM solutions, coupled with the increased adoption of advanced solutions, is the factor driving the market.

Tecsys Inc., Syft, and McKesson Corporation are some of the major market players.

North America dominated the market in terms of share in 2020.

The implementation of training programs for providers and manufacturers is expected to drive the adoption of healthcare SCM solutions globally.

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Healthcare Supply Chain Management Market Size, Share and Global Industry Trend Forecast till 2026
  • Jun, 2021
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