The global healthcare SCM market size is forecasted to grow to USD 4.54 billion by the end of 2028 from USD 2.89 billion in 2023, growing at a CAGR of 9.4% between 2023 to 2028.
MARKET DRIVERS:
The growing demand for healthcare services is one of the notable factors propelling the growth of the healthcare SCM market. With the growing population worldwide, the need for quality healthcare services is rising. This has resulted in increased pressure on healthcare facilities to ensure they have the necessary supplies and equipment to meet patient needs. Supply chain management plays a vital role in making sure that healthcare organizations equip with the required medical supplies, drugs and equipment on hand to meet patient needs promptly and efficiently. In order to meet the growing demand for healthcare services, healthcare organizations must have streamlined supply chain management processes and these results in improved patient outcomes and reduced costs.
The growing adoption of technological advancements in healthcare SCM further drives market growth. The penetration of technological advancements in supply chain management solutions for the healthcare industry can be seen clearly in recent years. Several healthcare organizations have been using recent technological developments such as automation, artificial intelligence and blockchain for improved tracking and monitoring and to further optimize supply chain efforts. This trend is likely to continue in the coming years and accelerate the growth rate of the market.
The rising emphasis of healthcare organizations to reduce their costs while maintaining the quality of care contributes to the healthcare SCM market growth. The need to reduce costs for healthcare organizations has been growing continuously for the last few years and these organizations are constantly exploring the available options to cut their costs while maintaining the quality standards in offering healthcare to the patients. Good SCM practices can help healthcare organizations to reduce their costs by reducing waste, optimizing inventory levels and improving efficiencies and this awareness among healthcare organizations has considerably increased in recent years and is anticipated to fuel in the coming years and boost the healthcare SCM market growth.
In addition, the growing number of regulations and regulatory requirements, increasing emphasis on patient safety, rising globalization of the healthcare industry, growing demand for personalized medicine and increasing popularity of e-commerce platforms support the healthcare SCM market growth. Factors such as increasing outsourcing of their supply chain management function to third-party logistics providers by healthcare organizations, integration of healthcare systems, increasing awareness of sustainability, the growing trend towards home healthcare and rising demand for telemedicine further boost the growth rate of the market.
MARKET RESTRAINTS:
High costs associated with implementing SCM solutions in healthcare organizations are one of the major factors hampering market growth. Interoperability issues between different systems and technologies and lack of standardization for supply chain management in the healthcare industry further hinder market growth. Safety concerns, resistance to change from the traditional practices by healthcare organizations, regulatory challenges and the scarcity of people with expertise in managing and implementing effective SCM solutions further impede the market growth.
Impact of COVID-19 on the global healthcare SCM market:
The COVID-19 pandemic has had a mixed impact on the healthcare SCM market. On one side, the COVID-19 pandemic has significantly boosted the need for critical medical supplies such as PPE kits, ventilators and other medical equipment that resulted in an increased demand for SCM solutions in the healthcare industry and favoring the market growth. The need for resilient supply chains that can respond quickly to disruptions and ensure that critical supplies are delivered when and where they are needed most has increased notably during the COVID-19 pandemic and contributed to the market growth. During the COVID-19 pandemic, several patients worldwide have leveraged digital healthcare technologies such as telemedicine to seek required medical care. At the same time, healthcare organizations have also used online ordering systems to manage their supply chains more efficiently and this has accelerated the adoption of SCM solutions in the healthcare industry and fuelled market growth. Furthermore, several healthcare organizations have collaborated and shared information and resources to tackle the impact of COVID-19 effectively and this has benefitted the healthcare SCM market and supported the market growth. On the other side, the COVID-19 pandemic has resulted in severe disruptions in the global supply chains and caused a shortage of critical supplies and delays in the delivery of medical products and equipment and this has shown an unfavorable impact on the healthcare SCM market. Likewise, the healthcare SCM market has been impacted favorably and unfavorably by the COVID-19 pandemic. However, the healthcare SCM market is anticipated to register a healthy CAGR during the forecast period.
REPORT COVERAGE:
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REPORT METRIC |
DETAILS |
|
Market Size Available |
2022 to 2028 |
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Base Year |
2022 |
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Forecast Period |
2023 to 2028 |
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Segments Covered |
By Component, Deployment, End-User, and Region |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, Drivers, Restraints, Opportunities, Challenges, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
This research report on the global healthcare SCM market has been segmented and sub-segmented based on the component, deployment, end-user, and region.
Healthcare SCM Market – By Component:
Based on the component, the software segment had the leading share of the global healthcare SCM market in 2022 and is estimated to continue the segmental domination throughout the forecast period. The rapid adoption of technological advancements such as artificial intelligence (AI), machine learning and blockchain is one of the major factors propelling the demand for software-based SCM solutions and driving segmental growth. The growing demand for real-time data analytics to improve supply chain efficiency and reduce costs contributes to segmental growth. The rising need for efficient inventory management to make sure that healthcare providers have access to the supplies they need when they need them favors segmental growth.
On the other hand, the hardware segment accounted for a considerable share of the global market in 2022 and is expected to grow at a healthy CAGR during the forecast period. The growing adoption of RFID technology in the healthcare industry to track inventory and improve supply chain efficiency is driving the demand for hardware-based SCM solutions such as RFID readers and tags and propelling segmental growth. Increasing usage of IoT devices such as sensors and smart cameras in healthcare SCM solutions to monitor inventory levels and track the movement of goods in the supply chain is another key factor that boosts segmental growth.
Healthcare SCM Market – By Deployment:
Based on the deployment, the cloud-based segment held a considerable share of the global market in 2022 and is predicted to grow at the fastest CAGR during the forecast period. The cost-effectiveness of cloud-based solutions is one of the key factors driving segmental growth. Cloud-based solutions are cost-effective to healthcare organizations compared to on-premise solutions that require huge upfront capital investments for the required hardware and software. Ease of access to cloud-based solutions is another key factor fuelling the adoption of cloud-based solutions by healthcare organizations and driving segmental growth as these can be accessed from anywhere at any time and helps manage their supply chains from remote locations. The scalability and flexibility of cloud-based solutions is another significant factor boosting segmental growth.
The on-premises segment accounted for a substantial share of the worldwide market in 2022 and is also expected to witness a healthy CAGR during the forecast period owing to factors such as the rising emphasis on data privacy and security in the healthcare industry. On-premises is a suitable option for healthcare organizations that have complex supply chain requirements and this has been favoring segmental growth.
Healthcare SCM Market – By End-User:
Based on the end-user, the manufacturer segment had the leading share of the global market in 2022 and is expected to grow at a healthy CAGR during the forecast period. Factors such as the growing demand for medical devices and pharmaceutical products in the healthcare industry and the rising need for efficient inventory management majorly drive segmental growth.
Over the forecast period, the distributor segment is predicted to register a promising CAGR during the forecast period.
The healthcare providers segment had a considerable share of the global market in 2022 and is anticipated to grow at a healthy CAGR during the forecast period.
Healthcare SCM Market – By Region:
North America dominated the healthcare SCM market in 2022 and it is estimated that regional domination is likely to continue during the forecast period. Factors such as the growing demand for advanced healthcare technology and solutions, stringent government regulations for supply chain management in healthcare and rapid adoption of electronic health records (EHRs) and other digital healthcare tools majorly propel the regional market growth. The growing number of healthcare providers, manufacturers, and distributors and the rising demand for personalized medicine and customized healthcare solutions further fuel the growth rate of the North American market. The U.S. and Canada together accounted for over 80% of the North American market share in 2022. The U.S. is expected to play a dominating role in the North American market during the forecast period owing to factors such as the growing demand for advanced inventory management solutions and the growing adoption of automation in healthcare supply chain operations.
Europe is a prominent regional market for healthcare SCM solutions and is predicted to account for a substantial share of the worldwide market during the forecast period. The growth of the European market is driven by the rising emphasis on reducing healthcare costs and improving efficiency, increasing demand for home healthcare and remote patient monitoring and rapid adoption of cloud-based and software-as-a-service (SaaS) solutions. The rising emphasis on patient-centric care and patient safety and the growing demand for sustainable and environmentally-friendly supply chain practices further fuel the growth rate of the European market. The UK market is estimated to register the fastest CAGR among all the European countries during the forecast period. On the other hand, the German market is estimated to account for a considerable share of the European market during the forecast period.
APAC is a lucrative regional market for healthcare SCM solutions and is predicted to witness the highest CAGR during the forecast period. The rising middle-class population and increasing healthcare spending, increasing demand for affordable and accessible healthcare solutions and rapid adoption of mobile health (mHealth) and telemedicine technologies primarily drive the regional market growth. The growing number of initiatives from the governments of APAC countries for healthcare modernization and digitalization and rapidly expanding pharmaceutical and biotechnology industries further contribute to the growth rate of the regional market. China held the leading share of the APAC market in 2022 and is expected to register a healthy CAGR during the forecast period. Factors such as growing healthcare spending, rising adoption of digital healthcare solutions and increasing demand for home healthcare and remote patient monitoring solutions drive the Chinese market growth.
Latin America captured a considerable share of the global market in 2022 and is estimated to grow at a healthy CAGR during the forecast period. The growing patient population with chronic diseases, rising geriatric population, increasing demand for high-quality and specialized healthcare services and rising medical tourism industry primarily drive the growth of the Latin American market growth. Brazil accounted for the major share of the Latin American market in 2022.
MEA had a moderate share of the worldwide market in 2022 and is predicted to register a steady CAGR during the forecast period. Factors such as the growing investments from the Middle East and African countries to promote healthcare infrastructure and services and the rising need for efficient supply chain solutions in remote and rural areas promote regional market growth.
KEY MARKET PARTICIPANTS:
Some of the noteworthy companies operating in the global healthcare SCM market covered in this report are McKesson Corporation, Infor, SAP AG Group, Oracle Corporation, Geisinger Health System, Intermountain Healthcare, Advocate Health Care, AmerisourceBergen, Cardinal Health, Cerner, and Providence Health & Services.
RECENT MARKET DEVELOPMENTS:
Frequently Asked Questions
The global healthcare SCM market was valued at USD 2.65 billion in 2022.
The growing need for better inventory management, the rising demand for healthcare services, and the growing focus on reducing healthcare costs are boosting the growth of the healthcare SCM market.
North America is expected to dominate the healthcare SCM market during the forecast period due to the presence of a well-established healthcare system.
SAP SE, Oracle Corporation, Infor Inc., McKesson Corporation, Cerner Corporation, Tecsys Inc., Global Healthcare Exchange (GHX), JDA Software Group, Inc., Jump Technologies, and LogiTag Systems Ltd are some of the major companies in the healthcare SCM market.
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