Healthcare Supply Chain Management Market Overview
The Healthcare Supply Chain
Management market size is estimated to reach $3.8 billion by 2026, growing at a CAGR of 8.3% during the forecast period 2021-2026. Healthcare
Supply Chain Management is the process of regulating the flow of medical goods and
services from the producer to the patient in an efficient and cost-effective
manner. Healthcare supply chain management also allows for the implementation
of strategic sourcing by manufacturers, distributors, and pharmacies by
increasing data collection and analysis. Furthermore, increasing the efficiency of
medical logistics also results in enhanced warehouse management via strategies
such as just-in-time delivery. Rising demand for reduction of healthcare
expenditure by medical facilities is contributing to the market growth during
the forecast period. However, concerns regarding data security act as a major
challenge for the Healthcare Supply Chain Management industry.
Healthcare Supply Chain Management Market Report Coverage
The report: “Healthcare Supply Chain Management Market
Forecast (2021-2026)”, by Industry ARC, covers an in-depth analysis of the
following segments of the Healthcare Supply
Chain Management Market.
By Component: Hardware and Software.
By Delivery Mode: On-Premise, Web-Based, and Cloud Based.
By End User: Healthcare Providers, Suppliers, Distributors, and Others.
By Geography: North America (U.S., Canada, and Mexico), Europe (Germany, UK, France, Italy, Spain, Russia, and Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia & New Zealand, and Rest of Asia-Pacific), South America (Brazil, Argentina, and Rest of South America) and Rest of World (the Middle East and Africa).
- Geographically, the North American Healthcare Supply Chain Management market accounted for the largest share in 2020 owing to the presence of well-developed healthcare infrastructure.
- An increase in the use of cloud computing in the healthcare industry is anticipated to drive the market during the forecast period. However, high initial investment costs necessary for the hardware and software components are projected to challenge demand growth.
- Detailed analysis on the Strength, Weaknesses, and Opportunities of the prominent players operating in the market will be provided in the Healthcare Supply Chain Management Market Report.
Healthcare Supply Chain Management Market Segment Analysis-By Component
Based on Components,
the Healthcare Supply Chain Management Market is segmented into Hardware and
Software. The software segment is anticipated to have the largest share of the
market in 2020 and is poised to dominate the market during the
forecast period 2021-2026. This segment is further segmented into Transportation Software, Procurement Software, Warehouse
Management Software, and Others. The growth of this segment is attributed to their
ability to increase the level of automation in supply chain management which
increases efficiency, reduces cost, and prevents stockouts of essential drugs and
medical equipment. It also helps the major stakeholders such as distributors,
suppliers, and hospitals streamline the processing of ordering medical supplies.
The Hardware segment is also projected to grow at a rapid CAGR of 8.7% during
the forecast period owing to rising global expenditure on healthcare services.
Healthcare Supply Chain Management Market Segment Analysis-By Delivery Mode
Supply Chain Management Market based on Delivery Mode can be further segmented into
On-Premise, Web-Based, and Cloud Based.
The Cloud-based delivery model segment accounted for the largest share of the
market in 2020 owing to their significantly lower costs. On-Premise
solution requires in-house server hardware, software licenses, integration
capabilities, and IT employees in order to function properly. However, in
Cloud-based, a third-party host will provide the services, thereby making them
much cheaper. However, the On-Premise mode of delivery is also anticipated to
witness significant growth at a CAGR of 8.9% during the forecast period. On-Premise
software requires the client to have a license of the software. As this
licensed copy stays within the facility, it can provide much higher data
protection than Cloud-based delivery. This is crucial owing to the rise in the
number of cybersecurity threats faced by the healthcare industry in recent
Healthcare Supply Chain Management Market Segment Analysis-By Geography
The Healthcare Supply Chain Management Market based on Geography can be segmented into North America, Europe, Asia-Pacific, South America, and the Rest of the World. The European segment is projected to dominate the Healthcare Supply Chain Management market during the forecast period 2021-2026 with a market share of 35% owing to the presence of highly developed healthcare infrastructure, high healthcare expenditure, presence of large data centers, and high adoption of cloud computing in the region’s healthcare sector. Moreover, the presence of key industry players such as McKesson Corporation, Oracle Corporation, TECSYS, Global Healthcare Exchange, Cardinal Health, and Epicor in the region ensures lower costs, higher innovation, and more options for the end-user industries. The Asia Pacific region is predicted to register the fastest growth owing to the increase in public healthcare funding in major emerging economies like China and India.
Healthcare Supply Chain Management Market Drivers
Rising Healthcare Expenditure is Projected to Drive Market Growth
An increase in the healthcare expenditure of developed and major developing countries is driving the demand for Healthcare Supply Chain Management systems as the rising expenditure increases the purchasing power of healthcare facilities, which promotes the adoption of these systems. For instance, the annual healthcare expenditure in the US is projected to grow at a rate of 5.4% between 2019 and 2028. The healthcare expenditure was around $4 trillion in 2020 and is poised to reach $6.19 trillion by 2028. India only spent around 1.2% of its GDP on healthcare in 2021. However, this is projected to reach 3% by 2022. Furthermore, the Indian government is planning to introduce a credit incentive program worth $6.8 billion to boost the country’s healthcare infrastructure.
Rise in Inflow of Patients into Hospitals is Anticipated to Boost Demand
The increase in chronic lifestyle diseases
and the growing geriatric population across the globe are leading to a rise in the influx of hospital admissions. The patient inflow further surged owing to the
COVID-19 Pandemic. For instance, more than 100,000 patients were in hospitals
owing to COVID-19 in the US during August 2021. This is driving the demand for Healthcare
Supply Chain Management as the risk of drug stockouts, supply delays and
equipment shortages have increased. For instance, more than 682 people died in
hospitals across India owing to the shortage of medical oxygen. Moreover, the increase in adoption of
Artificial Intelligence (AI) software for medical logistics management is
further generating demand for Healthcare Supply Chain Management systems.
Healthcare Supply Chain Management Market Challenges
The Low Awareness of Healthcare Supply Chain Management Systems is Anticipated to Hamper Market Growth
The low awareness regarding the benefits of supply chain management in healthcare in low and middle-income countries acts as a major threat for demand generation. This is attributed to the low public and private healthcare expenditure, which is leading to the lower purchasing capacity of the majority of small-scale public and private healthcare providers and suppliers in these regions. For Instance, according to the World Health Organization (WHO) database, the annual per capita healthcare expenditure in South Africa and Bangladesh was only $525.9 and $41.9 respectively. This is extremely low compared to developed countries such as the US who spent around $10623.8 per capita. This prevents the facilities from acquiring the capital necessary for investing in supply chain hardware and software systems.
Risk of Data Breaches is Projected to Limit Growth Opportunities
The growing concern regarding breach of
confidential data from healthcare facilities and medical suppliers owing to
cyber-attacks is a major challenge that can hamper the adoption of supply chain
management software. For instance, more than 600 US healthcare organizations were
affected in 2020 by ransomware attacks. Furthermore, the US healthcare
industry lost around $21 billion owing to these attacks. 1 out of every 3 health
care organizations globally reported being hit by ransomware. Such breaches can
halt the supply chain system of healthcare providers owing to the
overdependence on IT. This disruption can cause shortages of essential supplies
of medical equipment, leading to the endangerment of patient lives.
Healthcare Supply Chain Management Market Industry Outlook:
Product launches, mergers and acquisitions, joint
ventures, and geographical expansions are key strategies adopted by players in
the Healthcare Supply Chain Management Market. The top 10 companies of the
1. SAP SE
2. Oracle Corporation
4. McKesson Corporation
6. Global Healthcare Exchange
7. Cardinal Health
- In February 2020, ProShip Inc announced its partnership with the AI-based supply chain management platform, JDA Software. The partnership will help develop, expand and accelerate joint opportunities and equip ProShip with the tools and education required to work in this market.
- In January 2020, Infor announced that it has entered into an agreement to acquire Intelligent InSites Inc, a leading provider of healthcare software and services. Intelligent InSites provides an enterprise scalable, dynamic, and intuitive location platform to clients in the US and Australia.
Chain Risk Management Software Market – Forecast (2021 - 2026)
Report Code: ITR 0275
IT Market – Forecast (2021 - 2026)
Report Code: HCR 40559
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