The COVID-19 pandemic became an era of wake-up calls in every sense of the phrase. For businesses, those wake-up calls often came from the business disruptions linked to a lack of digitization in the enterprise and a lack of resiliency in the supply chain.
No industry faced a greater realization as to the importance of these concepts than the healthcare arena. Amid personal protective equipment (PPE) shortages and a race to develop a vaccine while stifling the spread of the virus, healthcare procurement took on a new role that was, quite literally, a matter of life or death.
Siamak Baharloo, CEO and co-founder of Labviva, recently told PYMNTS that the coronavirus crisis ignited a revamped procurement and supply chain management strategy for an industry tasked with managing thousands of vendors and complex product requirements. Back-office integration and functionality that goes beyond traditional B2B eCommerce platforms are essential to enabling the industry to thrive.
The Healthcare Perspective
Businesses across industries have come to recognize the strategic value of procure-to-pay, supply chain management and supplier relationship management workflows.
Procurement professionals in the healthcare industry are no different.
“One big challenge for them is they need to have access to literally thousands of different suppliers,” explained Baharloo. “Scientific research is complex, manufacturing biologics is complex, testing is complex, so they need to always have access to a larger number of suppliers and manufacturers.”
Unfortunately, many of these buy-side organizations are working with small teams and ERP and procurement platforms with limited functionality. At the same time, they’re facing pressure to cut costs and boost efficiency.
Technology is key to addressing those challenges, but solution providers must not only approach these pain points from the perspective of a procurement professional. Baharloo noted that they must also stand in the shoes of the researchers, scientists and technicians in need of these materials.
“They are typically very skeptical people, trained to investigate and identify the most appropriate products for their work,” he explained. “They need more data available to them about the products, applications and use cases of the product,” which could mean “scientific literature, protocols, specifications, videos, specs” that all drive the decision-making process.
Beyond B2B eCommerce
The rise of B2B eCommerce platforms has helped drive the modernization of procurement and tail spend. But considering the complexities of the healthcare space, the typical online marketplace is not always the right fit.
Labviva instead operates as an enterprise gateway marketplace (EGM), able to meet standards and requirements of a procurement strategy that involves a high volume of suppliers and complex products that are often customized and regulated. The company integrates into existing procurement platforms like SAP Ariba and Coupa, which Baharloo said allows end users to view vendors and products across catalogs and platforms in a single interface, with invoicing and payment workflow capabilities that are flexible enough to meet spend management requirements.
With the pandemic serving as a major wake-up call to the industry as to the importance of the procurement function, Baharloo said the pressure is on to modernize and optimize in ways best suited for the sector.
The pandemic is far from over, and there are other pressing matters in the healthcare and biopharmaceutical space that need addressing too. The consequences of falling short of eProcurement goals can be widespread.
“You need to be able to add new suppliers rapidly into your procurement system and supply chain network,” said Baharloo. “If you’re not able to do that, it will have significant impacts. For instance, with human trials and vaccine development, core critical functionalities were in danger of being halted just because they couldn’t find sterile pipette tips. It can be as simple as that.”