Historically, there has never been a clear winner in the battle between centralized vs decentralized procurement for clinical trials. Yet, the expanding scope of today’s clinical trials has paved the way for a frontrunner. This proverbial clash of the titans has revealed a distinct chink in the armor of one model and led to the rise of the other.
Discover the key differences between centralized procurement and decentralized purchasing to stay informed about the best supply chain solution for your clinical trial and determine which purchasing model reigns supreme.
Short Cuts
Central Procurement vs. Decentralized Procurement
Summary of Key Differences Between Centralized And Decentralized Procurement In Decentralized Clinical Trials
| Feature | Centralized Procurement | Decentralized Procurement |
|---|---|---|
| Efficiency | High | Low |
| Cost Savings | High | Low |
| Risk of Fraud and Maverick Spending | Low | High |
| Flexibility | Low | High |
| Responsiveness to Local Needs | Low | High |
| Quality Assurance | High | Low |
The Foundations of Contemporary Clinical Trial Supply Chains
Contemporary clinical trials have seen a rapid uptake in their complexity. Regulatory and efficiency demands have resulted in administrative burdens beyond the capacity of Sponsors and CRO’s capabilities. Effective supply chain management has emerged as the key solution to the growing burden, beginning with a highly efficient procurement foundation.
Centralized and decentralized procurement are two different approaches to managing purchasing goods and services for clinical trials. Each system has advantages and disadvantages in the broader supply chain management arena. However, in the clinical trial space, the best approach will depend on the study’s complexity and the trial’s global scope. This is because as the complexity and scope increase, so do the lead times and costs. This results in a delicate administration, logistics, and strategy ecosystem that spans beyond simplified procurement.
Fundamentally, the differences between centralized and decentralized procurement are based on clear industry trends, propelling increased focus toward a successful and efficient supply chain strategy. As a result of the core procurement and distribution challenges faced by clinical trials, best practices have emerged to minimize risks and fortify efficiencies in the supply chain.
Typically, clinical trial procurement is driven by time and cost demands. So, procurement models that secure and gear the supply chain for more cost-efficient and timely outcomes are most popular, particularly with the shift towards decentralized clinical trials.
As a natural response, procurement models have developed alongside inventory management systems and other project management tools to assist with the most streamlined supply chain outputs for clinical trials.
Centralized Procurement: A Strong Competitor
With centralized procurement, all purchasing decisions are consolidated under one dedicated umbrella, operating on a hierarchical level. The authority to make purchasing decisions is ultimately concentrated within this central body.
Drilling down into more detail, central procurement involves sourcing goods from a single established entity to distribute to multiple destinations, catering to the diverse needs of various locations. In some cases, this entails a singular purchase hub catering to numerous destinations globally. In this model, there is no room for local or autonomous procurement; instead, the procurement process operates at a higher hierarchical level, disseminating throughout the entire organization.
The centralized procurement approach can lead to several benefits, including:
Cost savings in the form of exchange rates, personnel, risk management and Inventory costs
Streamlined processes
Improved quality control
However, centralized procurement can also have some drawbacks, including:
Delayed decision-making
Lack of local expertise
Increased bureaucracy
Unique regulatory environments and import/export challenges can introduce unexpected delays, which is why the scope of the trial in partnership with an efficient sourcing strategy becomes the foundation of any efficient procurement strategy. Outsourced providers with large geographic footprints can help to navigate these challenges to manage risk and minimize unforeseen costs.
The result is simply greater support and more detailed oversight to meet the shifting needs of clinical trials. This means procurement models, partnership initiatives, and inventory management have become central to the successful functioning of DCTs.
Decentralized Procurement: A Diminishing Force
Decentralized or localized purchasing refers to a procurement strategy where purchasing decisions are made independently at various individual locations or departments within an organization. In this model, each local unit or department has the authority to source and procure goods or services based on their specific requirements and needs.
Decentralized procurement can offer several advantages, including:
Faster decision-making
Greater responsiveness to local needs
Reduced bureaucracy
However, decentralized procurement can also have some drawbacks, including:
Higher costs in the form of exchange rates, personnel, risk management and Inventory costs
Inconsistent quality
Increased risk of fraud and maverick spending
Mandated international compliance requirements and expectations for uniformity have burdened the decentralized model. Further hampered by soft inefficiencies such as maverick spending and bureaucratic handbrakes have seen a hastened move away from decentralized purchasing.
A Successful Supply Chain Reveals the Winner!
Ultimately, the best approach to procurement for a clinical trial will depend on the specific needs of the trial. Traditionally, it was assumed that a centralized approach may be more appropriate if the trial is large and complex, and a decentralized approach may be more efficient if the trial is small and local.
However, with the benefits of centralized procurements addressing the core concerns of time and cost saving, there has been a strong push towards developing strategic models that leverage the most appropriate inventory management systems and external partnerships to build highly efficient central procurement models for large-scale multi-site trials.
Additionally, the pitfalls of decentralized procurement have highlighted soft inefficiencies and given rise to operational gaps such as time zone discrepancies, language barriers, and production limitations.
Consequently, centralized procurement, within the strategic management framework, has revealed itself as a more efficient option for clinical trials, particularly for international multi-site and decentralized trials. Ultimately, switching from decentralized to centralized clinical trials can be the key to a more streamlined clinical trial supply chain.
Key Takeaways
Effective supply management is an essential component of every clinical trial. Missing and delayed supplies have a direct impact on the success of a study. Collaboration between the clinical supplies, service providers, and operations teams is essential.
Outsourced providers such as TecEx Medical, with diverse regional access and expertise, can help to navigate complex hurdles, mitigating risks and safeguarding the efficiency of clinical trials.
