McKinsey Report - Strength in Unity

McKinsey Report 100 pxIn October 2012 McKinsey & Company released a much awaited report highlighting the cost savings and patient safety benefits of adopting a single global supply chain standard in Healthcare. McKinsey interviewed more than 80 Healthcare leaders across the world and examined more than 25 cases of standards enabled improvement.

This report, called: "Strength in unity: The promise of global standards in healthcare" is the first of its kind to quantify the benefits of a single global standard for Healthcare supply chains which have shown to be huge.

McKinsey Report Findings

  • The research has revealed "that implementing global standards across the entire healthcare supply chain could save 22,000-43,000 lives and avert 0.7 to 1.4 million patient disabilities."
  • Addressing counterfeit drugs, a major and ever growing problem for public health and industry; the report concludes that "rolling-out standards based systems could prevent tens of billions of dollars' worth of counterfeit drugs from entering the legitimate supply chain".
  • At the same time, it states that "global standards could enable substantial safety benefits and enable healthcare cost reduction of $40-100 billion". Once adopted, global standards benefits will span over all supply chain stakeholders from manufacturers to patients.
  • "The healthcare industry faces a potentially costly patchwork of requirements. Over the long term this patchwork could become unworkable. The adoption of a single set of global standards will cost significantly less than two and far less than three or more."

The report concludes that the potential benefits enabled by global standards in Healthcare supply chains "could be significantly larger than anticipated, as proven by the lessons learned from the CPG/retail industry, when GS1 standards were widely adopted". End-to-end supply chain visibility could create new opportunities in mobile health, improve treatment compliance, avoid adverse drug interactions and more.

Katy George, Director at McKinsey & Company further emphasised that now was the time to act: "Healthcare is at a crossroads, the technology is in place, the standards exist. Global standards will make the difference, and the only way we can deliver those benefits is if the industry collaborates and aligns to drive adoption."

Dr Ajit Shetty, former Vice President, Enterprise Supply Chain Johnson & Johnson, supported the report by stating that Johnson & Johnson sees benefits in using GS1 Standards worldwide. He concluded by saying: "All patients owe GS1 a word of gratitude for a truly integrated, standardised and global approach to the supply chain of healthcare products".

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