idsMED and WeDoctor launch China’s first Smart Medical Supply Chain and Procurement company
Leading medical supply company IDS Medical Systems Group Limited has partnered with digital health company WeDoctor Holdings Limited to establish China’s first smart medical supply chain solutions and procurement company.
IDS Medical Systems encompasses an extensive Asia Pacific distribution network with access to over 10,000 healthcare institutions and represents over 200 global medical brands in equipment and medical consumables. These include GE Healthcare, Philips, Maquet, Smiths Medical, Teleflex, Ansell and others. WeDoctor operates four main business segments; WeDoctor Healthcare, WeDoctor Cloud, WeDoctor Insurance, and WeDoctor Pharma.
Named idsMED WeDoctor China Ltd, the government of Changting County in Fujian Province has also signed a strategic cooperation agreement to drive the establishment of an innovative medical devices platform in Ting Zhou, China.
The platform is designed to create new channels for medical devices and consumables to conduct technology transfers, license applications, company establishment, as well as investment and capital market coordination. The platform aims to support and attract both domestic and international medical device providers into Changting.
idsMED Group, a member of the Fung Group, is Asia's leading and largest integrated medical supply chain solutions company with a comprehensive distribution and value-add service network across Asia.
Backed by Chinese juggernaut Tencent, digital health company WeDoctor provides seamless online and offline healthcare services, as well as integration of general practitioners and specialist doctors.
Harnessing big data, artificial intelligence and other digital tools to deliver cutting-edge healthcare support services to over 2,700 hospitals, 240,000 doctors and 160 million platform users in China, the partnership will provide strategic value to both parties.
Leveraging their complementary strengths, innovative resources and networks, the duo will seek to connect medical manufacturers and service providers with hospitals and care institutions in China to procure medical devices, consumables and services centrally.
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Through the partnership, the company aims to transform the currently fragmented, multi-layered and relationship-driven medical device and consumables distribution system in China, reduce costs and increase the efficiency and effectiveness of the medical supply chain.
The joint venture, owned 51% by WeDoctor and 49% by idsMED Group, will further enhance its value proposition by managing and optimising the entire medical supply chain.
Additionally, it will set up Medical Education and Training Academies across China to deliver and promote medical products and clinical education as well as accredited medical training courses and education seminars for doctors and nurses and the medical community.
“The healthcare sector in China is a flourishing market going through rapid change and unprecedented reform. This cooperation is an important initiative of WeDoctor to contribute towards improving the supply chain efficiency of China's medical service system,” explained Jerry Liao, Chairman & CEO of WeDoctor.
“I am tremendously excited at the huge prospects of our partnership with idsMED Group to provide China's vast population with more accessible, more affordable and better-quality healthcare services."
Ben Chang, Chief Executive Officer & Founding Partner of idsMED Group, added, "This joint venture provides significant strategic value to the medical industry and immense socio-economic benefits to the people of China.
“WeDoctor is the perfect partner for us to develop and implement a smart, neutral online platform to provide a transparent, open and value-base procurement system. Together we have the unique opportunity to simplify and modernise the medical device and consumables distribution model in China and make healthcare even more affordable to the people on the Chinese mainland.”
According to the China Medical Devices Report Q3 2018 by BMI Research, a research firm under Fitch Ratings, online solutions are expected to play a crucial part in the growth of China’s healthcare industry, with medical device market set to grow from US$21.5bn in 2017 to US$39bn in 2022.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”