Eng | 

Supply Chain Management in Healthcare Busines

Mr. Ben Chang


Mr. Ben Chang, the Group Managing Director of IDS Medical Systems Group (idsMED) and the Executive Director of the Fung (1937) Holdings Limited, talks about the objectives of their entry into the Healthcare Supply Chain market.


What made the Fung Group enter into the Healthcare supply chain sector?

Healthcare supply chain is a fast growing sector in terms of expenditure. If you look at Asian countries’ spending on healthcare versus that of the OECD countries, we are easily growing more than double annually, and this will be the trend until 2020.  And yet the GDP expenditure on healthcare in Asia is just around 4 to 6%, which is far behind the OECD countries of around 12 to 15%.

The healthcare supply chain has tremendous opportunities.  One will see how inefficient it is in terms of statistics.  For example, as compared to the FMCG industry, the inventory days carried within the supply chain of medical consumables or devices is 4 to 6 times longer.  The manufacturing lead time is even 20 times longer due to the lack of manufacturing capabilities in Asia.

That was one of the reasons why the Fung Group entered into this segment.  In 2012, we created the IDS Medical System which focuses on medical equipment, consumables and services by applying the best principles of good logistics and supply chain, like what the Fung Group has been doing across many industries.


Mission and objectives of IDS Medical System

While the industry is growing rapidly in terms of spending, there are only few service providers and absolutely no big player in this area.  One of the key areas we focus on is to bring in the best practices and technology that is already well entrenched in the west, US & Europe into Asia.  Asia lags so far behind.  That is the why the government and private sector struggle to keep up with the demand of the aging population.  Everybody is looking for cheaper, better and more responsive healthcare.

When you look at the hospital ecosystem, it is not very efficient.  Quality of care is great and the government is doing a great job there.  But less emphasis is placed on cost and efficiency. Nowadays, doctors and nurses have to spend around 30 to 40% of their time on administrative tasks which can be easily outsourced.  This is an indication that there are not enough service providers and companies coming into this area.

The IDS Medical System, seeks to build a distribution and solution platform across Asia so that we can find the synergies of operations that will help lower cost and bring more responsive healthcare to the public.  We now have got a common distribution and solution platform across 7 countries.  We hope in the coming years we will be a leading practitioner.  Not only representing big brand of equipment and consumables, hopefully more and more hospitals will outsource the services they are not good at doing.

I hope we can encourage and influence more best-in-class companies to join in this effort for the benefit of the Asian population, and the healthcare supply chain in Asian will become as efficient, effective and competitive as the FMCG or fashion industry.


Career opportunities

When you look at the huge potential of this industry, it opens up whole new opportunities for young graduates, best-in-class logistics and supply chain students to come in.  The healthcare sector is not only for specialists like doctors and nurses.  It is indeed a large reservoir of career opportunities for young students or even experienced logistics practitioners.

We need a lot more top-end practitioners to fill in the service side of the hospital supply chain.  Most companies are just selling and distributing products, but I am now talking about career that students can come in to manage services in healthcare supply chain.  We are moving away from just hiring high-end salesmen to more to professionals.

Our management trainee and executive development programmes all focus on the delivery of healthcare supply chain services, e.g.  medical logistics and off-site Central Sterile Supply Department (CSSD). We concern not only about product delivery, but also services, operations, asset management and etc.  We hope to see that the sophistication of this industry will attract young people to build life-long career in this socially responsible industry.


Mr. Ben Chang seeks to enhance the efficiency of the healthcare sector in Asia through applying the best principles in logistics and supply chains.