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Logistics sector urges hospitals to adopt strategic sourcing


Hospitals must adopt an integrated strategic sourcing by implementing rigorous process of obtaining assurance of medical supplies and equipment while gaining the most advantageous deals for their organization during pandemics and calamities.

This was urged by Charlie Villasenor, chairman and CEO of Procurement and Supply Institute of Asia during a webinar on “Hospital Supply Chain in COVID-19: Challenges and Opportunities”

“Strategic sourcing is key,” said Villasenor as he cited the need for stronger collaboration among government, hospital management, and the logistics and supply chain players.

By strategic sourcing, Villasenor said this means having select and tailored approaches for critical medical supplies such as medical personal protective equipment (PPEs), COVID-19 test kits, drugs and pharmaceuticals. Strategic sourcing would determine volume concentration, best price evaluation, product specification improvement, global sources, joint process improvement, and relationship restructuring, he said.

Villasenor lamented the fact that hospitals work in silos and do not really consider strategic sourcing of their supplies. Hospitals consider sourcing as mere buying, not procurement.

But strategic supply sourcing is important as manufacturers also adopt lean and just in time approach, he pointed out. With pandemic like COVID-19, hospitals are caught in short supply of medical supplies with countries imposing import restrictions to prioritize needs of their people.

For instance, he said, with the global shortage in supply of medical supplies and PPEs for health workers, supply is expected to get back to normal levels in July yet. In the meantime, prices have gone up 10 to 20 times more than its previous high.

In addition, he urged government to adopt this strategy not just for the COVID-19 pandemic but for all other diseases and natural disasters brought by climate change like typhoons and floods.

As such, identifying an end-to-end supply chain is important to help hospitals during disease outbreak or natural disasters.

Villasenor offered PASIA’s collaboration with different hospitals, healthcare organizations and most important the government.

“Make our supply chains better for the new world. It’s the life blood of your business and your survival,” he said. So far, PASIA provides initiatives to address the current and upcoming supply chain disruptions.

The way forward is to make PASIA’s initiatives sustainable. According to Villasenor, hospitals can provide funding to adapt the end-to-end supply chain strategy.

The government may also come in to fund the needed resources via Public- Private Partnership while the business sector may also contribute on giving fund or they can appoint some of their employees to help in executing the plan.

The private sector can also co-invest in the supply chain shared services.

Source: Manila Bulletin (

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