Leading the charge on smart Procurement for Smarter Healthcare: The Digital Shift

During early-COVID days, McKinsey consultant Harkanwal Singh Sidhu read a story about shipping delays from China to US, impacting critical supplies including the ones required for medical procedures for millions of patients. Later that day, he gathered his group to develop a 5-step strategy for global businesses to develop a resilient supply-chain while maintaining procurement efficiency. 

“We need to understand the role of procurement in recovering from the business disruptions, including the 2008 financial crisis” he wrote to his data analysis team, stressing the need for recommendations to be based in hard & cold facts. Harkanwal, an expert in operations practice at McKinsey & Company, top consulting firm, is a believer in data-backed learnings and swears by the role of data plays in convincing businesses to act. He applies the same data-driven approach in his presentations to senior leaders at Fortune-100 companies, helping to transform their operations and achieve more resilient organizations. Harkanwal is a graduate of the prestigious IIT Kharagpur and INSEAD. 

Harkanwal, with his team, published the 5-step strategy, Reimagining Procurement for the Next Normal, that also included the first-ever research done to understand the role of procurement in business recovery. His research underscored the importance of setting up a strategic procurement function and transforming the supplier-base into a competitive advantage. This strategy has since been, widely used by global businesses to transform procurement teams and been cited by academics on “defining the new normal” for procurement, including in MedTech industry.  

The MedTech industry, a critical part of global healthcare, supports hundreds of millions patients globally and is growing rapidly. This rapid growth has strained the existing supply chains with high-level of supply fragmentation and manufacturing footprint across multiple countries. As a result, maintaining the essential supplies could be challenging, unless supply-chains are made resilient.

Experts like Harkanwal Singh Sidhu, a recognized authority in procurement resiliency& efficiency, are leading the charge on embracing digital for building resilient supply chains that can withstand both short-term disruptions and long-term challenges. Underlying this approach is the evolving role of procurement teams as a ‘strategic asset’ for the business that can protect businesses from disruption and deliver significant financial value. Harkanwal has helped deliver multiple such transformations, leading to multiple hundreds of millions of value to the business, saved from no disruptions to supply and strengthening of the supply-chains. 

The Digitalization of Procurement: A Game-Changer

Historically, procurement has been seen as a function focused on cost management and operational efficiency. The traditional approach of relying on manual, paper-based processes or disconnected legacy systems is no longer sufficient. The shift towards digitalization is not just a trend; it’s a necessity for survival.

According to Harkanwal’s research at McKinsey, five themes can help procurement shape recovery, ~70% of procurement leaders believe that digital and analytics solutions have become more valuable compared to pre-covid days, helping to enhance procurement effectiveness, uncover savings opportunities, and improve supply chain transparency. In an era where speed, collaboration, and flexibility are critical, digital tools are enabling companies to overcome the weaknesses that were exposed during the global health crisis. “Digital tools are not just about efficiency; they are key to building a resilient, adaptive supply chain that can respond to real-time disruptions,” says Harkanwal.

The integration of advanced technologies such as AI, machine learning, and predictive analytics is revolutionizing how MedTech companies approach procurement. By leveraging these technologies, businesses can anticipate supply chain disruptions before they happen, allowing them to mitigate risks proactively. Data-driven insights also provide a clearer picture of supply chain performance, helping businesses optimize inventory management, reduce lead times, and improve decision-making. 

The Role of Supplier Collaboration in a Digital World

Harkanwal highlights that at his clients, digital tools are enhancing collaboration with their suppliers. His research indicates that companies that innovate regularly in partnership with suppliers can achieve higher earnings growth (by up to 10 percent). A study involving 160+ procurement leaders “2020 reimagining procurement survey” done by Harkanwal’s team found that 88% either have started or plan to start joint-innovation programs with their suppliers, recognizing that fostering strong, mutually beneficial relationships is key to achieving long-term growth and resilience. Through digital platforms, companies can share real-time data, align on mutual goals, and coordinate more effectively, improving responsiveness during periods of uncertainty.

"By leveraging digital solutions, businesses can create better transparency and foster stronger relationships with a select group of suppliers, rather than depending on a large number of vendors with weaker connections," explains Harkanwal. He points out that instead of managing ten suppliers for a single product, companies can consolidate those suppliers into a smaller, more reliable group, increasing purchasing power and negotiating better terms. This consolidation reduces the risk of disruptions and strengthens overall procurement resilience.

Moreover, digital technologies offer better access to data, consolidating information from various sources into one central platform. This improved visibility allows companies to analyze and identify opportunities for cost reduction, improve supply chain visibility, and uncover new value chains. "The ability to consolidate data and gain actionable insights is a powerful tool in driving procurement success," Harkanwal adds.

Enhancing User Experience and Operational Efficiency

User experience has become a crucial factor in driving the digital transformation of procurement. According to an IBM study, 42.6% of procurement professionals consider improving user experience as one of the top motivators for digitalization. In procurement, user-friendly platforms that are intuitive and easy to navigate are key to increasing adoption and ensuring that procurement teams leverage the full potential of digital tools. As Harkanwal points out, "The more intuitive the technology, the better the procurement team can adapt to evolving challenges, ensuring seamless operations."

The adoption of digital tools also reduces the dependency on manual processes, streamlining workflows and speeding up the procurement cycle. This is especially important in the MedTech industry, where delays in the supply chain can have significant consequences for patient care. By shifting to real-time, automated systems, procurement teams can make decisions faster, reduce operational costs, and increase overall efficiency. The result is a procurement function that is not only cost-effective but also capable of quickly adapting to changes in supply and demand.

Building Long-Term Resilience Through Digitalization

As global supply chains become more interconnected and vulnerable to disruptions, the MedTech industry must prioritize long-term resilience. This resilience is built through a combination of strategic supplier relationships, data-driven insights, and the right technology infrastructure. Harkanwal emphasizes that procurement is no longer just about securing the best price for materials; it’s about creating flexible, adaptive systems that can withstand disruptions and continue to deliver essential products to healthcare providers.

“Procurement must evolve from a cost-saving function to a strategic driver of growth and innovation,” says Harkanwal. Companies that embrace this shift and leverage the power of digital tools will not only enhance their operational resilience but also position themselves for long-term success in a rapidly changing world. By focusing on user experience, supply chain visibility, and stronger supplier relationships, these companies can better navigate the complexities of a digital-first economy.

The Road Ahead for MedTech Procurement

The future of MedTech procurement lies in the integration of advanced digital technologies and the cultivation of strong, data-driven relationships with suppliers. Digitalization is no longer just a “nice-to-have” but a critical enabler of resilience, collaboration, and efficiency. As MedTech companies continue to innovate and invest in these tools, they will be better equipped to navigate disruptions, optimize their supply chains, and continue delivering life-saving innovations to the global healthcare market.

For Harkanwal, the path forward is clear: “We must embrace digitalization not only to survive but to thrive in the new normal. The companies that succeed will be those that continuously innovate, leverage data-driven insights, and adapt quickly to changing market conditions.” As the MedTech industry continues to grow and evolve, procurement will play an increasingly vital role in ensuring that companies can meet the healthcare challenges of tomorrow.