Healthcare Supply Chain Management Market Report: By Component (Software and Services, Hardware), Deployment Type (On-Premises, Cloud-Based), End User (Healthcare Product Manufacturers, Healthcare Providers, Distributors and Retailers, Logistics Companies) – Global Industry Revenue Estimation and Demand Forecast to 2030

Market Overview

The healthcare supply chain management market was valued at an estimated $2,090.5 million in 2021, and it is expected to advance at a CAGR of 10.2% during 2021–2030. The major factors propelling the growth of the market include the pressure of cost reduction in the healthcare industry, adoption of GS1 standards, along with the increasing investments by healthcare providers and related product manufacturers in healthcare supply chain management solutions.

According to a study, the average annual spending on supply chain management solutions by hospitals is around $12.1 million, including on product inventory that expires before use. Such products account for approximately 7–10% of the hospital inventory. Moreover, if used on a patient, they could cause severe health problems, in turn, drawing the ire of the FDA and medical malpractice tribunals.

To address such issues in the supply chain of the healthcare industry, a large number of startups are being launched across the globe. For instance, StratMed connects hospitals and manufacturers for the purchase of medical supplies at reduced costs. Few other startups that are trying to make a difference in the industry include Aknamed, Inneate, Feiyi, Veratrak, and Hashprix.

The market experienced the positive impact of the COVID-19 pandemic, as the demand for medical supplies and other related products across the globe spiked significantly. Cold chain companies that delivered vaccines and other medicines, which require temperature control, during the pandemic embraced technological upgradations and new modes of operations. For instance, UPS, which acted as one of the major cold-chain companies to supply temperature-controlled medical supplies, including vaccine doses, was able to deliver on-time with the help of advanced SCM technology.

However, the crisis amplified the issues or gaps in healthcare supply chain management, such as a lack in the adoption of enhanced technology for managing the supply chain functioning, along with a strong dependence on overseas manufacturing. To combat such issues, healthcare companies are investing in SCM solutions.

Software and Services To Witness Faster Growth during Forecast Period

The software and services category of the market is expected to grow at a significant CAGR, of more than 10%, during the forecast period. The major factors credited for this growth include the frequent product introductions, rising need for greater access to business intelligence data to formulate strategies, ease of product tracking via these solutions, adoption of eco-friendly initiatives, such as those for decreasing the paperwork in healthcare organizations, and increasing number of online purchases.

The software helps organizations in planning, procurement management, inventory management, and warehouse management. Supply chain management software not only automates the process, thus minimizing manual tasks, but also makes the process cost-effective. These benefits propel the adoption of healthcare supply chain software and services.

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Cloud-Based Healthcare Supply Chain Management Solutions Are Being Preferred

Cloud-based platforms are expected to witness sales growth of around 12% during the forecast period as they are transforming the healthcare supply chain management market. A large proportion of the end users are preferring cloud-based solutions over on-premises solutions owing to the former’s scalable deployment through the software-as-a-service (SaaS) model, ease of sharing information at varied locations, and low maintenance and installation costs.

The SaaS model is quite popular among pharmaceutical companies as it helps them reduce time delays across the product lifecycle, from development to manufacturing and distribution. Additionally, using the SaaS model across the entire supply chain helps companies apply a standardized process to meet environmental and social objectives.

Healthcare Product Manufacturers Are Largest End Users of Healthcare Supply Chain Management Solutions

Healthcare product manufacturers are the largest end users, accounting for more than 35% of the market share. Large pharmaceutical companies are outsourcing the manufacturing to CDMOs in developing nations so as to meet the increasing demand for various products and decrease the cost of their operations. Thus, CDMOs are expanding their footprint across countries by establishing manufacturing units. For instance, in 2021, Sun Pharma planned to set up a new manufacturing unit in the Andhra Pradesh state of India. Thus, manufacturers are opting for supply chain management solutions to track the manufacturing process, warehouse management, and transportation.

Additionally, healthcare providers, such as hospitals, clinics, and diagnostic centers, are the second-largest users of healthcare supply chain management solutions. The reason for the same is the rising need for data for procurement planning and inventory management, so that organizations neither have a shortfall nor do they incur extra costs because of an inventory of expired products.

Regional Outlook

The North American healthcare supply chain management market held the largest share, of around 40%, in the global market. The region dominates the market mainly because the U.S. is the largest employer in the healthcare sector across the globe with more than 780 thousand companies. Moreover, the U.S. spends almost twice of what other countries spend on healthcare, which accounted for 19.7% of its GDP in 2020.

The APAC market is expected to witness the highest CAGR, of more than 11%, during the forecast period. This is ascribed to the emergence of countries such as India, China, South Korea, and Singapore as the preferred locations among large pharmaceutical companies for drug manufacturing, pathological testing, and clinical trials. As a result, pharma companies are either outsourcing to CDMO companies or investing in them. For instance, in January 2022, Piramal Pharma Limited (PPL) invested in India-based Yapan Bio; the former now has a 27.78% equity stake in the latter company. This investment was done to add the capabilities of developing and manufacturing large molecules for human clinical trials to PPL’s portfolio.

Business Opportunities

• Medical device and pharmaceutical manufacturers and healthcare providers are massively investing in advanced technology for managing their supply chains and moving toward automated processes. The most-prominent technologies in this regard include artificial intelligence, internet of things, 3D printing, product tracking, and logistics optimization.
• The blockchain technology, which is still in the development stage, also has the potential to prosper in the healthcare SCM market.

Key Strategic Developments of Market Players

In recent years, companies operating in the market have been actively involved in product launches, mergers & acquisitions, partnerships, and other development activities. For instance:

• In April 2022, TraceLink launched the multi-enterprise Supply Chain Work Management solution on the Opus Digital Network Platform for the healthcare and life sciences industry.
• In March 2022, symplr announced plans to acquire medical supply chain management software company GreenLight Medical, to help build its product line and offer its clients more services in the SCM arena.
• In February 2022, Global Healthcare Exchange acquired Syft, a provider of AI-enhanced inventory control and end-to-end supply chain management software and services, to enhance automation, data analytics, and inventory management capabilities for the healthcare industry.

Key Players in Healthcare Supply Chain Management Market Are:

• SAP SE
• Oracle Corporation
• Infor Inc.
• McKesson Corporation
• Tecsys Inc.
• Global Healthcare Exchange
• Cardinal Health
• Determine
• Epicor
• Manhattan Associates

Market Size Breakdown by Segment

The report offers comprehensive market segmentation analysis along with market estimation for the period 2017–2030.

Based on Component

• Software and Services
• Hardware

Based on Deployment Type

• On-Premises
• Cloud-Based

Based on End User

• Healthcare Product Manufacturers
• Healthcare Providers
• Distributors and Retailers
• Logistics Companies

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
• Asia-Pacific (APAC)
  • China
  • India
  • Japan
  • Australia
  • South Korea
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  • Turkey
  • Saudi Arabia
  • South Africa