Healthcare Supply Chain Management Market Size, Share & Trends Report

Healthcare Supply Chain Management Market Size, Share & Trends Analysis Report By Product (Software, Hardware, Services), By Mode of Delivery (Cloud-based, On-premise), By End Use, And Segment Forecasts, 2019 - 2025

  • Published Date: Oct, 2019
  • Base Year for Estimate: 2018
  • Report ID: GVR-3-68038-989-0
  • Format: Electronic (PDF)
  • Historical Data: 2015 - 2017
  • Number of Pages: 150

Report Overview

The global healthcare supply chain management market size was valued at USD 1.9 billion in 2018 and is projected to exhibit a CAGR of 8.7% over the forecast period. Increasing the need to improve operational efficiency and profitability and reduce operating costs, mainly by healthcare providers and manufacturers is boosting the growth of the target market. The emergence of cloud-based and mobile-based solutions across the healthcare industry is also supporting market growth. Moreover, advancements in analytics, machine learning, and the advent of social media and Big Data are further expected to significantly drive the market.

U.S. healthcare supply chain management Market size

The rapid increase in the adoption of GS1 standards and unique device identification (UDI) for medical devices is anticipated to propel the market in the coming years. GS1 standards certify globally unique identification and allow cross-border compatibility of such solutions. Global standards have significantly improved patient safety and supply chain efficiencies and effectiveness in the healthcare system. Implementation of global standards, such as barcodes, has assisted in combating counterfeit medications. Serialization, authentication, and traceability can catch duplication and unauthorized serial numbers. According to WHO, around 15% of the world’s medicines are counterfeit. This has further posed a serious risk to patient safety while threatening faith in the pharmaceutical industry. Therefore, the implementation of GS1 standards has allowed stakeholders to verify supply chain history for each product.

The European Commission, the U.S. Food and Drug Administration (FDA), and other regulators have made the healthcare supply chain a strategic priority worldwide by approving legislation for UDI for medical devices. Counterfeit medical products are a trend that is rising with each passing year and therefore implementation of UDI on medical devices is essential. UDI also enhances inventory management and offers a consistent way of identifying items for distribution.

Cloud-based supply chain management software and their applications are transforming the healthcare industry. Demand for cloud-based software is increasing due to the focus of healthcare manufacturers and providers on achieving higher supplier quality and inventory optimization. For instance, Jump Technologies has developed a cloud-based software solution called JumpStock that integrates with EMR, ERP, or scheduling systems, thereby allowing hospitals to reduce costs associated with supply hoarding, physician preference variances, and stock-outs. Cloud-based track and traceability solutions protect manufacturers from variable expenses of a product recall by early identification of product quality problems. These solutions also improve order management and production planning across all warehouse locations.

Product Insights

In 2018, software emerged as one of the high potential segments. Growing adoption of software such as SaaS, which offers next-generation cloud computing applications, are among key factors boosting the segment. Moreover, the rising need for efficient management of organizational workflows in healthcare organizations and a shift in the trend toward value-based care in developed economies are driving the software segment. Healthcare supply chain management software applications are continuously evolving, focusing on the enhancement of patient outcomes and real-time sharing of patient data.  

The services segment is expected to expand at a steady CAGR of 8.7% over the forecast period. Advancements in software platforms have spurred demand for supply chain management services such as support and maintenance, consulting, and education and training. The development of a range of platforms for monitoring inventory management as well as procurement is a key factor fueling segment growth.

The hardware segment is anticipated to register significant growth over the coming years, wherein barcodes accounted for the largest revenue share in 2018. It is difficult for the healthcare industry to manage massive volumes of information, along with all the challenges healthcare providers and manufacturers are facing. Barcodes offer cost-effective solutions to hospitals and manufacturers. For instance, inventory control is an intricate and time-consuming process that every healthcare organization deals with. Barcodes assist in managing these inventories by providing the right information at the right time.

Mode of Delivery Insights

In 2018, cloud-based delivery mode accounted for the largest revenue share of 39.8% in the healthcare supply chain management market; the segment is also expected to exhibit the fastest growth over the forecast period. Increasing demand for cost-effective, user-friendly technologies and higher acceptance rates are among key factors contributing to the large share of the segment. Increasing penetration of cloud computing among healthcare providers for maintaining inventory and procurement information is further boosting the market.

On-premise deployment is expected to exhibit a CAGR of 8.2% over the forecast period. Organizations have been facing various challenges during deployment of on-premise supply chain management solutions about effective implementation and governance, policies and processes, staff recruitment, and training and retention. This, combined with high upfront infrastructure and set up costs are expected to challenge the growth of this segment.

Preference for cloud-based technology has increased due to various security breaches in on-premise and web-based deployment. Web-based applications are affected by network performance. This, in addition to high costs associated with hosting dedicated servers, is compelling various healthcare institutions to shift to cloud-based deployments.

End-use Insights

In 2018, healthcare manufacturers accounted for the largest revenue share and are expected to be the fastest-growing segment over the forecast period. The presence of a large number of manufacturing hubs in the pharmaceutical and medical device industry in developed and emerging economies has enabled major revenue generation. Growing adoption of SaaS among manufacturers has helped in reducing maintenance and development costs to support systems. This is also expected to drive the segment.

Global healthcare supply chain management Market share

The distributor's segment is expected to grow at a significant rate over the forecast period. Growing demand for supply chains management solutions such as software, hardware, and tools by primary pharmaceutical distributors to efficiently coordinate between healthcare providers and manufacturers is one of the key factors driving this segment. Moreover, pharmaceutical distributors are undertaking partnerships with supply chain management solution providers to manage inventory in the best possible manner. This is expected to increase demand for healthcare supply chain management solutions by distributors.

Demand for cloud computing is driving the logistics segment. The impact of cloud computing in logistics has served many benefits, such as significant improvement in efficiency and clarity of key functionality. Cloud computing has enhanced logistic organizations by making the process more transparent. Furthermore, the growing adoption of RFID and barcode has supported various logistics activities such as tracking of orders and optimization of distribution routes.

Regional Insights

In 2018, North America accounted for the majority revenue share in the market. Mandatory implementation of GS1 standards and Unique Device Identification (UDI) on pharmaceutical drugs and medical devices, coupled with the presence of large manufacturing hubs, are among key factors boosting the North American market for the supply chain management. Moreover, constantly developing healthcare and IT infrastructure and growing demand for cloud computing is contributing significantly to market growth. The U.S. is a lucrative market in North America and registered the largest revenue share in 2018. Growing adoption of scanning technologies such as barcodes and RFID by manufacturers to curb counterfeit drugs has aided the market.

Asia Pacific is anticipated to be the most lucrative market, exhibiting the highest CAGR of 9.7% during the forecast period. This is due to the availability of mobile-based healthcare supply chain management solutions and the increasing implementation of technologically advanced solutions in countries such as India, China, and Japan. The rising number of government initiatives to inspire healthcare providers and other healthcare organizations to adopt cloud-based software solutions to improve inventory management systems is also expected to propel the market in the Asia Pacific over the forecast years.

Healthcare Supply Chain Management Market Share Insights

Oracle Corporation; SAP; McKesson Corporation; Manhattan Associates; Logi-Tag Systems; Tecsys; Infor Inc.; Global Healthcare Exchange (GHX); Jabil; and AmerisourceBergen are some of the key players accounting for the majority of the market. This can be attributed to their strong product portfolios, global presence, and high focus on innovations in healthcare supply chain management solutions over the years. Key strategies adopted by these players to gain a competitive edge are mainly inclined to expand the supply chain and commercialization of services for medical supply and pharmaceutical manufacturers.

Healthcare Supply Chain Management Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 2.2 billion

Revenue forecast in 2025

USD 3.4 billion

Growth Rate

CAGR of 8.7% from 2019 to 2025

Base year for estimation

2018

Historical data

2014 – 2017

Forecast period

2019 – 2025

Quantitative units

Revenue in USD million and CAGR from 2019 to 2025

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Product, mode of delivery, end-use, region

Regional scope

North America; Europe; Asia Pacific; Latin America; Middle East & Africa

Country scope

U.S.; Canada; U.K.; Germany; Spain; Russia; France; Italy; China; Japan; India; Australia; Singapore; South Korea; Brazil; Mexico; Argentina; South Africa; Saudi Arabia; UAE

Key companies profiled

Oracle Corporation; SAP; McKesson Corporation; Manhattan Associates; Logi-Tag Systems; Tecsys; Infor Inc.; Global Healthcare Exchange (GHX); Jabil; AmerisourceBergen

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research, Inc. has segmented the global healthcare supply chain management market report based on the product, mode of delivery, end-user, and region:

  • Product Outlook (Revenue, USD Million, 2014 - 2025)

    • Software

    • Hardware

      • Barcodes

      • RFID Tags

    • Services

  • Mode of Delivery Outlook (Revenue, USD Million, 2014 - 2025)

    • On-premise

    • Cloud-based

    • Web-based

  • End-use Outlook (Revenue, USD Million, 2014 - 2025)

    • Healthcare Manufacturers

    • Healthcare Providers

    • Distributors

    • Logistics

  • Regional Outlook (Revenue, USD Million, 2014 - 2025)

    • North America 

      • The U.S.

      • Canada

    • Europe

      • U.K.

      • Germany

      • France

      • Italy

      • Spain

      • Russia

    • Asia Pacific

      • China

      • Japan

      • India

      • Australia

      • Singapore

      • South Korea

    • Latin America

      • Brazil

      • Mexico

      • Argentina

    • Middle East & Africa

      • South Africa

      • Saudi Arabia

      • UAE

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