Must-Know Healthcare Supply Chain Metrics

Highlights: Healthcare Supply Chain Metrics

  • 1. On-Time Delivery (OTD)
  • 2. Order Accuracy
  • 3. Order Cycle Time (OCT)
  • 4. Inventory Turnover
  • 5. Stockout Rate
  • 6. Days on Hand (DOH)
  • 7. Fill Rate
  • 8. Demand Forecast Accuracy
  • 9. Shrinkage Rate
  • 10. Total Cost of Ownership (TCO)
  • 11. Supplier Performance Metrics
  • 12. Carrying Costs
  • 13. Sustainability Metrics
  • 14. Digitization Rate
  • 15. Order Processing Time

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In today’s rapidly evolving healthcare landscape, the importance of effectively managing the healthcare supply chain has never been more critical. With rising costs, increased patient demands, and the ongoing push for improved quality of care, efficiently managing resources and maintaining operational excellence are vital to the success of healthcare organizations.

This blog post delves into the key healthcare supply chain metrics that are essential for optimizing performance, maximizing patient satisfaction, and ultimately, ensuring the highest level of care delivery. By better understanding these metrics, healthcare leaders and supply chain professionals can make informed decisions to drive positive change, reduce waste, and keep costs in check, all while maintaining a focus on patient outcomes.

Healthcare Supply Chain Metrics You Should Know

1. On-Time Delivery (OTD)

Measures the percentage of orders delivered on time, which is critical in ensuring that hospitals and medical facilities have the right products when they need them.

2. Order Accuracy

Evaluates the percentage of orders that are delivered with the correct items and quantities, ensuring minimal disruptions in medical care.

3. Order Cycle Time (OCT)

The time it takes from order placement to order delivery, which is important for keeping healthcare operations running smoothly.

4. Inventory Turnover

Indicates how effectively healthcare organizations manage their inventory by measuring how often inventory is sold or used in a given time period.

5. Stockout Rate

Evaluates the percentage of time that an item is out of stock, indicating the efficiency of inventory replenishment processes.

6. Days on Hand (DOH)

Measures the average number of days that inventory sits in stock, which can shed light on how well the organization balances stock levels and demand.

7. Fill Rate

Calculates the percentage of ordered items that are available in stock, which helps evaluate the capacity to meet customer demand.

8. Demand Forecast Accuracy

Evaluates the accuracy of demand forecasts by comparing predicted demand with actual demand, which can help improve inventory planning and reduce costs.

9. Shrinkage Rate

Measures the percentage of inventory lost due to theft, damage, or other causes, which is crucial for identifying vulnerabilities in the supply chain.

10. Total Cost of Ownership (TCO)

Calculates the total cost of procuring, storing, and managing healthcare products, which can help organizations better understand and optimize their spending.

11. Supplier Performance Metrics

Assess the performance of suppliers through criteria such as quality, delivery reliability, and product availability, ensuring that supply chain partners meet or exceed expectations.

12. Carrying Costs

Represent the cost of holding inventory, such as storage costs, insurance, and obsolescence, which can help organizations identify areas for optimization and cost-reduction.

13. Sustainability Metrics

Measure the environmental impact of the healthcare supply chain, such as greenhouse gas emissions or waste generation, contributing to a more responsible and environmentally-friendly supply chain.

14. Digitization Rate

Evaluates the percentage of supply chain processes that are digitized, enabling more efficient and cost-effective operations.

15. Order Processing Time

Measures the time taken from order receipt to order dispatch, which can help identify inefficiencies in the order processing or fulfillment processes.

Healthcare Supply Chain Metrics Explained

Healthcare supply chain metrics play a crucial role in evaluating and optimizing the performance of a healthcare organization’s operations. On-Time Delivery (OTD) is vital in ensuring that vital medical supplies reach hospitals and medical facilities when they are needed. Order Accuracy ensures that correct items and quantities are delivered, thereby minimizing service disruptions. Order Cycle Time (OCT) helps gauge the efficiency of processing and delivering orders, while Inventory Turnover and Stockout Rate assist in assessing inventory management.

Days on Hand (DOH) and Fill Rate provide insight into stock levels and the ability to meet customer demands. Demand Forecast Accuracy is instrumental in improving inventory planning and reducing costs. Shrinkage Rate identifies vulnerabilities in the supply chain, and Total Cost of Ownership (TCO) offers a comprehensive understanding of procurement-related expenses.

Supplier Performance Metrics help evaluate and maintain supplier relations, while Carrying Costs reveal opportunities for cost optimization. Sustainability Metrics contribute to environmentally responsible supply chain practices. Digitization Rate and Order Processing Time help identify and address operational inefficiencies, ultimately leading to a more effective and streamlined healthcare supply chain.


In summary, effective management of healthcare supply chain metrics is vital to streamline operations, reduce costs, and improve patient care. By consistently monitoring and analyzing key performance indicators, healthcare organizations can identify areas for improvement and implement strategic changes that contribute to the overall success of the healthcare system.

We must embrace new technologies, invest in employee training, and collaborate with stakeholders to ensure a strong and resilient healthcare supply chain. Ultimately, enhancing the visibility, predictability, and reliability of the healthcare supply chain will benefit not only healthcare providers but also, and most importantly, the patients who depend on their services for improved health outcomes.


What is the purpose of healthcare supply chain metrics?

Healthcare supply chain metrics are used to measure and assess the performance, efficiency, and effectiveness of the entire healthcare supply chain. These metrics help to identify areas for improvement, drive growth, reduce costs, and enhance patient care.

What are some key healthcare supply chain metrics?

Some key healthcare supply chain metrics include on-time delivery rate, inventory turnover, stockout rate, order-to-delivery lead time, and order accuracy. These metrics provide insights into the agility, responsiveness, and accuracy of the supply chain to ensure timely delivery of healthcare products and services.

How does inventory turnover rate relate to healthcare supply chain efficiency?

Inventory turnover rate is a metric that measures how frequently a healthcare organization's inventory is sold and replaced within a given period. A higher inventory turnover rate indicates efficient stock management, leading to lower holding costs, reduced stock obsolescence, and better cash flow. Monitoring and improving inventory turnover rate can result in an optimized supply chain and efficient use of resources.

Why is it crucial for healthcare organizations to monitor stockout rates?

Monitoring stockout rates, or the frequency at which healthcare products are out of stock, is crucial because it directly impacts patient care and overall service quality. High stockout rates may lead to delayed treatments, increased patient dissatisfaction, and loss of revenue. Reducing stockouts improves supply chain performance, ensures the availability of essential medical supplies, and enhances patient care.

How can healthcare organizations improve their order-to-delivery lead time?

Healthcare organizations can improve their order-to-delivery lead time by streamlining their supply chain processes, implementing efficient inventory management systems, investing in demand forecasting tools, enhancing supplier relationships, and adopting technologies like automation and analytics. These efforts can help reduce delays, improve responsiveness to demand, and ultimately, result in better patient care and satisfaction.

How we write our statistic reports:

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly.

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