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Building a better healthcare supply chain

Written by Tim Wilson on March 30, 2016

One of the common criticisms of healthcare in Canada is that it doesn’t function as efficiently as other industries. The simple rejoinder is that healthcare’s unique requirements make it different. Proof of sorts can be seen in the American ‘open market’ system, which is more expensive than ours and doesn’t drive the kinds of efficiencies one would hope for, particularly with regard to critical outcomes.

But there is one area where Canada’s healthcare system is building rational efficiencies, and that’s in the supply chain. For years now the Canadian Pharmaceutical Distribution Network (CPDN) has assumed the role as a service provider to drug manufacturers, allowing hospitals to consolidate ordering and delivery with single payment.

From a technology perspective, the CPDN is largely driven by a web-facing order management application and portal developed by Mississauga, ON-headquartered ThoughtSpeed eCommerce Ltd., which has been working with the CPDN for seven years, and recently announced an agreement for an additional three years, with a two-year option past September 2018. The company’s software, called eHealthSys, is a made-in-Canada, Software as a Service (SaaS) solution.

“We own and operate all of the system infrastructure and components, which is offered as a service to our customers,” says Michael Neary, ThoughtSpeed’s VP Business Development. “All production data and source code resides at a third-party hosting facility in the GTA.”

Research has shown that the healthcare sector in Canada has been slow to embrace the innovation of the cloud for two reasons: data residency concerns, and security. By running the infrastructure in Canada, ThoughtSpeed has addressed that problem. As for the second, Neary assures me that “multiple safeguards are in place to ensure business continuity, such as redundant database backups and mirrored backup servers.”

This isn’t a simple task. The software has to integrate with participants’ existing ERP applications from a range of vendors, as well as a raft of warehouse management solutions and some complex, home-grown applications. All-in-all, the CPDN has 22 drug manufacturers as members, with business Integration via EDI, XML or flat file.

One area where the healthcare supply chain is also showing innovation is with the Global Data Synchronization Network, or GDSN. This Network is based on the GS1 set of standards, and has been embraced by leading US-headquartered companies. Here we have an example of cross-industry applicability, given the GDSN’s popularity in sectors such as retail and grocery. In Canada, there is room for the GDSN to play a big role in medical devices, basic supplies, as well as pharmaceuticals.

Last year, in conversation with Dave Reed, VP of Operations and Healthcare Business Solutions at Cook Medical in Bloomington, IN, I was told that it makes sense for Canadian companies to participate in a single global GDSN.

“In many cases Canadian companies are part of a global organization,” he said. “The GDSN creates efficiencies and helps ensure that trading partners are using the most recent and accurate data in their transactions.”

This article first appeared in Canadian Healthcare Manager on, and is reprinted with permission.