How the Life Science Industry is Changing

life science industry

I was recently reading up on President Trumps proposed taxpayer budget, wondering “What will it mean for patients, hospitals and numerous other life science customers that Esker serves?” Regardless of one’s political leaning, most supply chain leaders tend to agree that healthcare costs continue to rise.

After a recent conversation with analyst firm Gartner, I took away that hospitals are facing increased demand, higher costs and there is a definite expectation that Medicare funding will be reduced. There is a new culture where hospitals must consistently improve patient outcomes, their education of doctors, and lower overall hospital costs.

Life science providers can anticipate more demand for their products as medical professionals become more comfortable with medical devices and joint replacements. A good friend of mine who is a retired airline captain, tennis player and ski instructor jokes about a hip replacement procedure being required at one point in the future as it means he will be able to maintain a lifestyle close to what he has enjoyed so far. Who doesn’t want to play tennis or coach their grandkids to play ball? I recall an HBR publication that highlighted many babies born today have an excellent chance of becoming centenarians assuming a healthy lifestyle and access to best in class care and life science applications later on.

The life science providers are combining processes and technology that allow them to lower production costs, improve overall quality and get products to the hospital faster. These manufacturers are likely to be doing more business with the hospitals via direct channels in the future. To meet the increased demand and price pressures they will have to be able to handle a significantly greater scale of customers placing orders directly.

Supply chain leaders are aware that customer experience will dominate purchase decisions within the next three years. For that reason, we find ourselves talking with supply chain leaders as they look to embrace machine learning that will help cut out errors, boost staff productivity and enhance the overall supply chain experience as the supply chain tends to have more touchpoints with customers than the sales team.

There is an incorrect perception that these efficiency goals can only be achieved if every order flows through without any touches. Life science leaders including Alere and Biomerieux focused on reducing the number of touches needed by combining people, process and technology to great effect. Bayer lowered order management time from 7 mins to 58 seconds. Alere cut nearly four minutes and lowered the number of touches from 17 to 2.4.

Regardless of who is in charge in Washington D.C,  the population will rely more on life science. Those providers are going to be busier and, for most, technology is going to allow them to keep up.

Daniel Reeve

Dan Reeve has been with Esker for 18 years. As Sales Director he helps companies streamline and improve visibility across order to cash and procure to pay. Transforming customer service and helping companies utilize digital transformation in order to compete via service/customer loyalty. For P2P it means accelerating invoice approval, paying suppliers faster, freeing up cash flow and leveraging supply chain finance opportunities.

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