Why The Healthcare Industry Relies on Short Lead Times

Most business goals include the delivery of goods and services within a short timeframe. However, in many industries, delays in the supply chain are commonplace and sometimes expected. A late delivery, while inconvenient, is usually nothing more than an annoyance. 

Healthcare facilities, on the other hand, rely on short lead times to ensure they have the supplies needed to treat any patient at any time.

What is lead time?

Lead time is how long it takes to receive a product after submitting an order.  

Lead times can vary depending on the supplier location, the shipping service used, whether the product is custom-made, and whether there are any delays in the manufacturing and shipping processes.

Why are lead times important in the healthcare industry?

Storage space in healthcare facilities is limited

Providers treating patients need immediate access to supplies stored in the facility, but the storage space available is finite. Hospitals and clinics rely on a continuous resupply plan to ensure they do not experience a shortage of equipment but are also not overstocked with no space to store excess supplies.

Short lead times allow purchasing departments to order and fill available storage space as needed, which is how the healthcare system works. Patients receive medical care on demand, and supplies and equipment should be available to meet that need. 

Short lead times also help contain costs. Healthcare supply managers make their purchasing decisions based on quality, cost, and the needs of the patients served. Factored into the price of healthcare purchases is how long it will take to obtain supplies. 

A long lead time may mean that the purchaser may need to fill a supply gap with a small purchase from a company that promises a shorter lead time but at a higher cost. 

If quality and costs are equal, the purchasing department will order the bulk of their medical supplies and equipment from companies that guarantee short lead times.  

Healthcare needs are unpredictable

Unforeseen health crises can strain hospital resources. Hurricanes, wildfires, shootings, and infectious disease outbreaks are just some of the public health crises that can create shortages of medical supplies. 

Even seasonal health events can drain hospital resources. A severe flu season may force hospitals to rush order supplies to meet demand. 

Long lead times can cause extended shortages of medical supplies and equipment, resulting in delayed treatment of patients and poor health outcomes. 

The need for healthcare services is growing 

Over the next ten years, the American Hospital Association reported that hospital admissions and outpatient and ambulatory surgery center visits will grow by 3% and 14%, respectively. Emergency department patient volume is forecasted to rise by 4% over the same period. 

Much of this growth is due to our aging population living longer. This population also carries the heaviest chronic disease burden, a burden that is predicted to skyrocket over the next 25 years, according to Frontiers in Public Health.

As the number of patients grows, hospitals and other medical centers will need more space, staff, and supplies. Long lead times for delivery of medical carts, cabinets, furniture, and equipment can impact healthcare systems in many ways, including:

• Delayed treatment – Patients may experience care delays if facilities face long lead times for essential equipment, such as medical carts, cabinets, furniture, and equipment.

• Delayed staff start dates – Long lead times may result in delayed staff start dates or the need to place new staff in temporary positions

• Delayed inspections – Rescheduling regulatory and health department inspections sometimes incurs fines

• Lost revenue – Delays in delivery of storage units, furniture, and equipment translates into lost revenue  

When purchasing supplies, pharmaceuticals, equipment, storage units, and furniture, evaluate the company’s lead times. Shorter lead times can impact your overall cost and the quality of the care you provide. 

InnerSpace Healthcare specializes in storage solutions for all areas and departments within a healthcare facility. We promise a smooth procurement process with short lead times, onsite training and support, and ongoing customer support. Contact us today to speak to one of our customer service representatives and learn how we can help you with our customized healthcare storage solutions.