Supply chains are usually organized into levels called tiers. These tiers show how close a supplier is to the main company:
For example, a healthcare provider might work directly with a manufacturer (Tier 1), who relies on several component suppliers (Tier 2 and Tier 3).
This tiered setup makes it harder to see and manage risks. A Deloitte survey found only 15% of Chief Procurement Officers have clear information beyond their Tier 1 suppliers. Risks from Tier 2 and Tier 3 include delays, quality problems, legal issues, environmental effects, social risks such as labor practices, and cybersecurity threats. So, depending only on Tier 1 suppliers for risk checks is often not enough.
Healthcare organizations in the United States have worked hard to fix supply chain problems caused by the COVID-19 pandemic. Research by McKinsey showed that 60% of healthcare groups moved their supply chains closer to the areas where products are needed. Also, 33% moved production plants nearer to where products are used.
Even with these changes, healthcare supply chains are behind other industries like aerospace or automotive in digital technology use and skilled workers. Only 10% of healthcare companies said they had enough in-house digital experts to support advanced supply chain tools.
Still, healthcare companies know they must improve their view of suppliers beyond Tier 1. Most supply chain problems happen past the first tier, but only about 2% of companies can see risks beyond Tier 3.
Not knowing what goes on beyond Tier 1 suppliers puts medical practice managers at risk of shortages, delays, recalls, and rule-breaking. Since healthcare depends heavily on steady supplies, this lack of knowledge can hurt patient care and operations.
Medical groups face several big challenges when trying to see supply chain risks beyond Tier 1:
These problems cause limited supplier information and increase the chance of supply chain disruptions from unexpected supplier failures, political conflicts, material shortages, or ethical problems deeper in the chain.
Even though it is hard to get, having better visibility into suppliers beyond Tier 1 brings clear benefits for healthcare in the U.S.:
One way to reduce supply chain risks is to have multiple suppliers. Political tensions, trade rules, and natural disasters have shown the dangers of relying on a few suppliers or regions. For example, 57% of supply chain leaders started moving away from Chinese suppliers because of trade conflicts and export controls.
Healthcare providers in the U.S. also gain by finding alternative suppliers at several levels. This lowers the risk of shortages caused by strikes, port closures, or material problems.
Supplier checks that focus on financial stability, delivery dependability, and location risks are important. Using digital risk tools and making “what-if” plans help spot supply chain blockages and new risks before they cause problems.
One big change in supply chain management for healthcare leaders is AI and automation technology. These tools help overcome data scattering and limits in human work, which block full multi-tier supply chain views.
AI systems can handle large amounts of data to build up-to-date maps of multi-level supply chains. Some startups use AI to find supplier links and risks from many public and private sources. This helps healthcare teams see beyond their direct Tier 1 suppliers.
AI also improves demand forecasts by studying sales data, social media, and shipping information. This helps healthcare groups predict supply shortages or sudden increases in demand and adjust orders promptly.
Real-time AI dashboards spot problems like sudden supplier delays, port traffic jams, or strange buying patterns. For example, some tools analyze customer activity and feelings to predict supply problems and send early warnings.
Advanced AI can simulate different problem scenarios. It checks how changing suppliers, adjusting prices, or rerouting shipments might affect supply flow.
This data-driven way supports fast, informed decisions during emergencies. It helps reduce downtime and protect patient care.
Combining AI with automated workflows makes supply chain work smoother. Automation systems can:
By cutting clerical work, AI-powered automation lets healthcare staff focus more on supply planning and patient care.
Even though AI and automation show promise, healthcare groups face a big shortage of digital skills. Only 1% of companies said they have enough in-house digital experts to use advanced supply chain technologies well.
This talent shortage limits how much many healthcare providers in the U.S. can benefit from these new tools. They will need new hiring plans, retraining programs, and partnerships with tech vendors.
Healthcare leaders in the U.S. should focus on building their workforce skills along with technology investments to reach lasting supply chain improvements.
Using AI in supply chain work raises important rule and ethics questions. Both U.S. and European regulations, like the EU AI Act, give guidance to make sure AI systems are clear, fair, and safe.
Healthcare providers should watch out for data privacy and bias when using AI tools. Human supervision remains important to check AI results, understand the context, and handle ethical issues.
Government actions, such as the Biden administration’s $52.7 billion CHIPS and Science Act, support strong supply chains using technology while stressing good governance and responsibility in AI use.
Having clear views of suppliers beyond Tier 1 is becoming necessary for healthcare groups in the U.S. The pandemic showed that most supply chain problems start past Tier 1, where many risks hide.
Medical practice administrators and IT managers need to look beyond immediate suppliers to find and reduce risks deeper in their supply networks. This means investing in digital tools that give real-time, multi-tier supply chain maps and data.
AI and automation help collect, study, and act on data faster than manual methods. Still, healthcare groups must fix the digital skill shortage to fully use these advanced tools.
By combining supply chain diversification, new digital tools, and skilled staff, healthcare providers can improve strength, cut costs, and provide steadier patient care across the United States.
The pandemic highlighted vulnerabilities, such as a lack of flexibility and resilience in global supply chains, causing firms to rethink their configurations and operations.
93 percent of respondents in a survey indicated intentions to enhance flexibility, agility, and resilience in their supply chains.
Healthcare players adopted a broader range of resilience measures, with 60% regionalizing their supply chains and 33% moving production closer to end markets.
Companies emphasized proactive monitoring of supplier risks, with 95% implementing formal risk management processes post-pandemic.
Organizations with advanced analytics capabilities reported better supply chain planning performance, with successful firms being 2.5 times more likely to use these tools.
An overwhelming majority reported investing in digital technologies, with most planning increased investments for the upcoming years.
The skills gap is widening, with only 1% of companies reporting sufficient in-house digital talent, making it a barrier to accelerated digitization.
Chemicals and commodity players exhibited the smallest overall changes in their supply-chain footprints, largely due to their asset-intensive nature.
Many companies lack visibility into their supply chains beyond tier-one suppliers, with only 2% able to assess risks in third-tier and beyond suppliers.
Almost 90% of respondents expect to pursue some degree of regionalization in the next three years, with healthcare and engineering sectors particularly focused on this strategy.
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