How Tariffs are Impacting Healthcare Technology
MobiHealthNews: How have tariffs impacted healthcare technology?
Michael Needham: In the near term, tariffs have created uncertainty and indecision for businesses. This has led to reactive approaches in determining how to weather the storm and implementing safety measures to mitigate risks.
Companies in the healthcare and pharmaceutical sectors are fortifying their supply chains by opting for forward purchasing. However, this strategy can be risky as it assumes that the supply chain has enough inventory available for immediate use.
The potential and real impact of President Trump’s tariffs have prompted companies to reassess risk management strategies, particularly in sectors like medical devices where the absence of critical products can have life-or-death consequences.
Rethinking Sourcing Strategies and Improving Supply Chain Visibility
MobiHealthNews: How are global disruptions forcing procurement leaders to rethink sourcing strategies, improve supply chain visibility and strengthen supplier resilience?
Needham: Sourcing strategies in the medical device sector involve complex global supply chains with components sourced from multiple countries. Understanding where supplies come from and how they connect is crucial for risk mitigation and cost management.
Supply chain visibility is essential for identifying potential risks. Resilience in supply chains is key, especially in sectors like pharma where tariffs can impact operations.
Managing Tariff Volatility
MobiHealthNews: What tactics are you recommending to manage tariff volatility?
Needham: Visibility is key. Knowing where supplies come from is essential for managing risks. Forward buying of inventory has been a tactic used in the near term, but it can be challenging due to cash flow management.
Businesses are advised to take measured reactions and work with partners across the supply chain to manage risks effectively. Collaborative relationships with suppliers are crucial for long-term stability.
Procurement Transformation Through Automation and Strategic Sourcing
MobiHealthNews: Are rising cost pressures accelerating the need for procurement transformation through automation, strategic sourcing, and supplier consolidation?
Needham: Yes, rising cost pressures are driving organizations, especially healthcare systems, to simplify and consolidate suppliers to leverage volume for better pricing. Strategic sourcing and automation are essential for procurement transformation in response to cost pressures.
