At the heart of a centralized procurement system lies the power to unify all purchasing operations, creating a composition of standardized protocols, advantageous price negotiations, and resource optimization. This harmonious approach not only orchestrates cost efficiency but also ensures the consistent delivery of high-quality supplies and services across all participating trial sites.
Short Cuts
The Problem Statement
Is using centrally procured PPE for DCTs cheaper, more efficient, higher quality, and lower risk than locally sourced equipment?
The Scenario
In preparation for an upcoming multi-site clinical trial across seven countries in Central and South America, a well-known sponsor conducted a practical analysis to determine the most effective solution for the trial’s international supply chain. To examine this, the sponsor used Personal Protective Equipment (PPE) procurement to exemplify the process. The aim was to ensure timely, cost-effective, and low-risk operations for the trial by testing local versus centralized procurement.
In this test, the project management team for a sponsor conducted a sample shipment of PPE using centralized and decentralized procurement models into two of the most challenging destinations in Central and South America. The main details assessed in this due diligence included compliance requirements, general efficiency, and lead times reflected for centralized and decentralized procurement models.
Central and South America are notoriously difficult trade destinations. With the additional complexities for medical supplies, the region is considered a vault for companies attempting to conduct business or do research. As a result, procurement models for trials in the region have traditionally been heavily skewed towards decentralized options. However, with the significant uptake of decentralized trials, optimized solutions for centralized procurement have begun to emerge.
Why Central Procurement Stands Out
A streamlined central procurement strategy can drastically alter the success of your supply chain. And clinical trials are significantly more likely to meet budgets and deadlines if the supply chain is optimized.
Central purchasing in the scope of decentralized clinical trials (DCTs) boils down to distribution and inventory management into multiple trial sites worldwide and comes with a distinct set of compliance and logistical pain points. Conversely, the solutions to these pain points offer a more efficient argument for central procurement in international multi-site clinical trials – resulting in a more cost-effective and streamlined supply chain.
The research resulted in the following pain points and solutions for each purchasing model to highlight each procurement model’s inclinations.
The Pain Points Highlighted in Local Procurement:
Maverick Spending & Limited Control
Due to deadline constraints, a lack of awareness, convenience, and a general lack of oversight, maverick spending is a distinct risk in the decentralized procurement model. In this example, the struggle to get the correct equipment and timely approvals resulted in maverick spending on PPE gear to meet intensive time pressure. It was flagged in previous analyses that local teams wouldn’t always use the budgets as intended, cases of corruption and nepotism started to rise, and cases of maverick spending were more frequently flagged.
Standardization Challenges
With the specific parameters for procurement in the local procurement setting, it became difficult to source standardized equipment. The limited availability of particular brands of PPE made sourcing more time-consuming.
Increased Costs
Since relationships with local vendors for the specified PPE equipment were not yet set up, there were significant delays in procurement. Additionally, the costs were significantly higher with limited volumes without the centrally procured economies of scale.
The Solutions Offered by Centralized Procurement:
Curbing Maverick Spending & Offering Control
Centralized procurement enabled a smoother inventory flow and heightened oversight of purchasing procedures. Efficient inventory management systems minimized intangible inefficiencies like mismatched time zones, language barriers and ensured simplified procurement of the PPE. Centralized procurement offered a unified platform for all purchasing tasks, simplifying expenditure tracking and identifying potential cost-saving opportunities. Time and cost management were transparent and manageable in the centrally procured shipment, and maverick spending was eradicated.
Standardization
Given the nature of clinical research, striving for consistency across multiple aspects of the trial tends to yield the most dependable results. By following approved protocols and ensuring adherence to all trial requisites, centralized procurement provided a crucial element of uniformity. This has helped to enhance data quality, safeguard the trial’s integrity, and prioritize patient safety. This uniformity and predictability addressed standardization challenges experienced in the local procurement model.
Cost Management
Centralized procurement frequently facilitates the establishment of widespread trusted relationships. Based on existing relationships in the supply chain and economies of scale for multiple sites, the sourcing of PPE was more cost-efficient.
The Pain Points Highlighted in Centralized Procurement:
Increased Potential for Delays
In the early stages of process building, the central procurement processes have policy and procedural delays. Additionally, time-sensitive areas of the supply chain, such as customs and import compliance, are subject to knock-on effects from the early decision-making process. Due to the effective partnership strategy of the central procurement model, delays were mitigated. Outsourced customs, compliance, and IOR services facilitated faster import times and avoiding delays.
Complexities in the Supply Chain
The delicate supply chain is typically more complex due to the multitudinous compliance, logistical, and operational requirements. Centralization requires the participation of specialized third parties and service providers. Details such as partnership selection and vetting are integral to DCTs’ operational and logistical success. Again, adequate preparation, solid partnerships, and vetting in various aspects of the supply chain ensured a smooth central procurement process.
Cost Management
Since relationships with local vendors for the specified PPE equipment were not yet set up, there were significant delays in procurement. Additionally, the costs were significantly higher with limited volumes without the centrally procured economies of scale.
The Solutions Offered by Local Procurement:
Localized Supply Chain Management
Local procurement offers a level of support that cannot be matched by central procurement. Language compatibility and cultural compatibility make purchasing interactions more straightforward and more efficient. While this applies to interactions with the trial site, this does not necessarily extend to interactions with CROs and sponsor-level communications.
Other solutions include finding a suitable importer of record and project manager for your clinical trial imports.
The Outcome
Centrally procured products used under the parameters of a controlled inventory management system – in partnership with specialized providers – was the best solution. Ultimately, the sponsor opted for centralized procurement across the study. This was despite the notorious reputation for trade in the region.
TecEx Medical was included in the centralized procurement support services to assist with trade compliance and logistics, which is typically a time-intensive aspect of the trials. Our team quickly assisted with compliance and customs requirements, as well as licensing, approvals, and permits.
Key Takeaways
Due to the specialized nature of DCTs, central procurement is the most efficient solution for large-scale, complex, multi-site clinical trials. Ultimately, central procurement best practices effectively minimize the critical risks in the supply chain.
