State of Healthcare Supply Chains

TL:DR

• The U.S. healthcare industry, with a spending of more than $4.5 trillion in 2024, faces significant logistical challenges that require innovative solutions.
• The rise of telehealth, digital transformation, and value-based care models is reshaping healthcare delivery, demanding agile supply chain strategies.
• Hospitals face workforce limitations, rising operational pressures, and complex logistics, necessitating the need for efficient supply chain management.
• By collaborating with Ryder, healthcare providers can optimize supply chains, enhance patient care, and achieve operational efficiency.

The U.S. healthcare industry is at a pivotal juncture, with spending reaching a staggering $4.5 trillion in 2024, accounting for 17.3% of the nation's GDP, according to the American Medical Association.

Hospitals and healthcare facilities form the operational backbone of this vast ecosystem, yet they are under unprecedented pressure to deliver better patient care.

Complex delivery systems must now support rapid diagnostics, mobile health services, and tighter regulatory compliance. To meet these challenges, healthcare providers require agile, compliant, and highly coordinated supply chain support.

That’s why, in this article, we’ll examine the macro trends influencing the healthcare industry, the supply chain challenges hospitals and healthcare facilities face, and how specialized solutions from Ryder enable healthcare systems to optimize their logistics.

Macro Trends in the Healthcare Industry

The healthcare industry is undergoing a significant transformation, driven by several macro trends that are reshaping how care is delivered and managed.

Let’s take a closer look at each one in more detail.

Growth in Alternative Care Models

The rise of telehealth and "hospital-at-home" programs has been a game-changer. According to McKinsey, telehealth usage has increased by 38X from pre-COVID-19.

This shift is complemented by increasing investments in outpatient and ambulatory care facilities, which offer more convenient and cost-effective care options for patients.

These alternative care models require rethinking supply chain logistics to ensure seamless delivery of medical supplies and equipment to diverse locations.

Digital Transformation and AI Integration

Digital transformation is at the forefront of healthcare innovation. The healthcare AI market, was at $26.57 billion in 2024, is projected to exceed $187 billion by 2030, according to Grandview Research.

Robotics is aiding in surgeries, AI is improving diagnostics, and predictive inventory tools are streamlining supply chain operations.

These technologies are enhancing patient care and optimizing supply chain efficiency by predicting demand and managing inventory more effectively.

Value-Based Care and Cost Efficiency

The shift from fee-for-service to outcomes-based models is driving hospitals to focus on cost efficiency and care coordination. Hospital systems are consolidating to reduce costs and enhance care delivery. This transition highlights the importance of adopting a strategic approach to supply chain management.

According to Premier, approximately 80% of providers and 84% of suppliers anticipate that supply chain issues will either worsen or remain unchanged. This is an increase from the 75% of providers who felt the same way in 2023.

The Supply Chain as a Strategic Priority

According to the same Premier article, 67% of providers reported that their teams spend more than 10 hours a week mitigating supply chain shortages and challenges.

Additionally, almost 40% of providers had to cancel or reschedule procedures in each quarter during the last year due to product shortages.

With supply chain issues becoming a strategic priority, healthcare organizations are recognizing the critical role logistics plays in patient care.

Efficient supply chain management can lead to improved patient outcomes, reduced operational costs, and enhanced compliance with regulatory standards.

Supply Chain Challenges Facing Hospitals

Hospitals face numerous supply chain challenges that require innovative solutions and strategic partnerships.

• Workforce limitations: The healthcare industry is grappling with ongoing shortages of clinical, technical, and administrative staff, which stretch operational capacity. These workforce limitations necessitate efficient supply chain processes to ensure that resources are allocated effectively and patient care is not compromised.
• Rising operational pressures: Tight margins resulting from increased labor and pharmaceutical costs, combined with variable reimbursement rates, are placing financial pressure on healthcare providers. Hospitals must find ways to optimize their supply chains to reduce costs and maintain financial stability.
• Complex and sensitive logistics: The need for timely and secure transportation of temperature-sensitive pharmaceuticals and high-value equipment is paramount. Coordinating deliveries across main campuses, outpatient centers, and affiliated sites adds complexity to logistics operations, requiring precise planning and execution.
• Data and compliance management: Achieving real-time visibility into inventory and delivery data is a significant challenge. Healthcare providers must adhere to strict standards under HIPAA, FDA, and State Boards, including CFR 210/211 relating to good manufacturing practices, 820 for quality system regulation, and ISO 13485 for medical devices. Effective data management and compliance are essential for maintaining operational integrity and patient safety.
• Limited scalability and system Fragmentation: Many healthcare facilities lack an integrated warehousing or transportation infrastructure, resulting in inconsistent service levels across sites and vendors. Scalable supply chain solutions are necessary to address these challenges and ensure the consistent delivery of care.

Healthcare Supply Chain Solutions from Ryder

Ryder offers specialized supply chain solutions tailored to the unique needs of the healthcare industry, providing expertise and support to optimize logistics operations with:

Proven Logistics Expertise: The Story of BJC HealthCare

Ryder supports healthcare systems, such as BJC HealthCare, by managing temperature-sensitive pharmaceuticals and sterile equipment. With a proven track record of delivery consistency and zero tolerance for failure in critical environments, Ryder ensures that healthcare providers can rely on their logistics operations.

In the case of BJC, Ryder customized an end-to-end supply chain and transport solution, which serves 14 facilities with more than 3,300 beds. We began by identifying a centralized location for the warehouse that would serve the entire network.

This 400,000+ square-foot, ambient-temperature facility was designed from the ground up and includes more than a mile of conveyors, 44 dock doors, and houses over 17,000 SKUs.

The warehouse serves as a central supply center, housing medical devices, pharmaceuticals, and day-to-day supplies, and features automation and proprietary technology platforms.

Tom Harvieux, chief supply chain officer for BJC, knew that “The traditional model in healthcare and distribution wasn’t working, and we knew we had to look outside of healthcare (for a solution).”

Ryder’s solution was The Order Store, an automated system that brought the products to the worker instead of requiring them to search for the products. Robots quickly grab the products and deliver them, increasing productivity.

RyderShare also plays an important part, providing complete visibility into BJC’s supply chain. “Before RyderShare, we didn’t know what we were going to receive until we actually opened the package,” Harvieux says.

The bottom line? Six months after it went live, Ryder improved the fill rate from 90% to 98%. This means that healthcare providers have what they need for the patient when they need it, on time, and on budget.

With Ryder’s help, BJC has also realized an astounding 40% increase in levels of service, and the cost per PO is one-third less expensive.

“They (Ryder) were able to bring together a building, the labor, the automation, the integration, and the transportation to really deliver optimal services to our organization,” Harvieux enthused.

“We’re trying to upend how business has been done in our industry for 20 years. We couldn’t do that with somebody who’s not forward-thinking and who isn’t willing to collaborate with us and learn with us.”

Tailored, Scalable Solutions

Healthcare supply chain solutions from Ryder are designed to flexibly accommodate both large healthcare systems and small specialty clinics.

Our approach ranges from comprehensive integrations for large systems to leaner, cost-effective solutions for smaller facilities, ensuring that you receive the support you need.

Specialized Handling and Certifications

Our drivers and warehouse teams are trained in hospital protocols and regulatory compliance, with facilities and vehicles certified under FDA guidelines, adhering to CFR 210/211 and CFR 820/ISO 13485 standards to ensure process integrity and security.

Chain of Custody and Risk Mitigation

Ryder employs rigorous measures to ensure the secure handling and transportation of medical supplies, mitigating risk and protecting sensitive shipments.

This includes:

• Temperature-controlled units
• Secure storage trailers
• Pharmaceutical-grade handling procedures
• High-level insurance
• Comprehensive background checks
• Strict access protocols

Technology-Enabled Visibility

Ryder leverages advanced technology to provide real-time tracking and inventory management through warehouse management systems.

Additionally, our systems integrate seamlessly with electronic health record platforms, enabling forward allocation to keep supplies closer to care points.

This technology-driven approach enhances visibility and control over the supply chain, enabling healthcare providers to respond promptly to shifting demands.

Ryder Solutions by Line of Business

Ryder's comprehensive suite of solutions addresses various aspects of healthcare logistics, ensuring that every component of the supply chain is optimized for efficiency and reliability.

• Consolidated service centers: Our centralized hubs for warehousing and distribution management facilitate seamless integration with WMS, providing a streamlined approach to inventory management and distribution.
• Transportation logistics: Ryder provides comprehensive transportation logistics services, encompassing inbound and outbound freight management, as well as specialized last-mile medical deliveries. This ensures that critical medical supplies reach their destinations promptly and securely.
• Lease and maintenance: Ryder provides custom fleet leasing options with built-in maintenance and compliance support, allowing healthcare providers to focus on patient care while Ryder manages their transportation needs.
• Last mile and SPD (Sterile Processing Delivery): Ryder handles the end-to-end logistics of sensitive medical devices, instruments, and surgical kits, ensuring that these critical items are delivered with precision and care.

Partnering for Success: Transforming Healthcare Supply Chains with Ryder

In a sector where every second and every shipment counts, hospitals need partners, not just vendors. Our deep healthcare experience, regulatory expertise, and scalable solutions are built for the modern healthcare landscape.

By partnering with Ryder, healthcare providers can optimize their supply chains, enhance patient care, and achieve operational efficiency.

To learn more about how Ryder can transform your healthcare supply chain, contact us for a consultation.