Supply Chain Management –For Healthcare Industry
Introduction: Economic downturn in Healthcare sector has given renewed importance to supply chain management in healthcare industry. Supply chain management has great effects on hospital organizations. On papers Supply chain accounts for 30 to 40% in healthcare industry but that is only if we consider just the cost of goods under the supply chain , instead if we look at factors like cost of inventory , cost of procuring and other costs associated with the different supplies such as engineering , food services , nurses and engineering , also the time spent on activities related to supply chain management then supply chain in actual holds for 50% or more .As per one of the CEO from
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In manufacturing companies we have utilization amount or required quantity for manufacturing particular product beforehand with supply chain managers and hence they can plan the orders or purchases .However in healthcare, utilization patterns are not fixed and demand can be extremely high or extremely low and this where supply chain managers face challenge in efficiently carrying out the supply chain operations and minimize the cost. Despite this difference healthcare industry has other costs which are same as any other manufacturing or service industry costs such as inventory cost , transportation cost etc. Let us see some of the ways to improve the supply chain process in healthcare industry. Building relationships: Gaining the physician’s support should be of highest importance. In healthcare industry it is advisable for supply chain managers to closely work with physicians and nurses. In healthcare it is very critical to involve physicians and make them understand the supply chain process and this in turn helps them to give valuable feedback on delivery and receiving process. In healthcare supply chain management one of the biggest challenge is to take care of physician’s choices (says William Stitt, vice president, materials management, Robert Wood Johnson University Hospital, New Brunswick, N.J).
Align the supply chain management with physicians: In recent studies
The main elements of a supply chain include purchasing, operations, distribution, and integration. The supply chain begins with purchasing. Purchasing managers or buyers are typically responsible for determining which products their company will sell, sourcing product suppliers and vendors, and procuring products from vendors at prices and terms that meets profitability goals.
Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;
The supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.
Supplies are the vital factor to having successful operation and to be efficient with the business you are providing. In order to bring value to the organization, you must insure that customers are satisfied with the quality health care provide in each transports, so that they can continue use transport with future transports.
Today’s world great organizations are emerging in inventing powerful resources for a competitive advantage. It is called supply chain management and it includes all integrated activates which introduce to market place and maintain customer satisfaction. This supply chain management drives from multi- disciplinary departments such as procuring, transportation, manufacturing products, customer services, distribution of product into integrated program. Successful management will be in coordination and integrated in all these activate in an unbroken chain process. It supports and interconnected to all the partners within the organization, where these partners are merchants, third party companies, transporters, third party companies and product providers.
The second chapter includes the literature reviews that are used as a basis for answering the research problems. The literature review provides the theoretical foundation for this research. The theories are strongly related to the topic and purpose of the thesis, which covers the definitions, functions, and advantages of Supply Chain Management and the performance metrics of Supply Chain Operations Reference, followed by proposed conceptual model.
The global data standard which uniquely recognizes the locations and products is been developed by GS1 in order to streamline the processes and improvise operative inefficiencies within the healthcare supply chain. These standards are created by healthcare industry itself, and are designed to address the challenges within the industry by giving a single, rich and global repository of precise and updated information which can be utilized by the stakeholders of the healthcare supply chain in order to simplify inventory management. All of these data standards exist in in a Global Location Number (GLN) registry, which is a global directory for entire the GS1 data standards in supply chain. Stakeholders of the supply chain such as providers, distributors,
Westminster Company has a long, rich tradition of being one of the biggest healthcare supply businesses in the world. They developed from a simple pharmacy supplier into an expanded, diverse variety of healthcare products to satisfy customer requirements. Westminster has operated in the United States (US) as three separate entities under one company that differ in location, size, and products produced. These three entities are individually operated and have no centralized management. In recent years, Westminster has observed the changing market and competition related to supply chains. In response, Westminster has conducted surveys and research over the past couple months that found some of the major issues that need to be addressed, to better serve their customers. As a result, they have sought solutions to adapt to these necessities in order to remain a solvent, competitive organization. The customers that make up the largest portion of sales (80/20 rule) are the mass merchants. These mass merchants are expected to continue growing during the upcoming decades. Therefore, it is imperative for Westminster Co. to ensure that they are able to properly serve the mass merchants’ requirements, while still being able to maintain customer requirements of non-mass merchants. The purpose of this paper is to evaluate Westminster’s current traditional supply chain practices and integrate solutions that will target efficient use of company resources while building stronger
According to the article Healthcare Supply Chain Management Market by Product, Delivery Mode & End User - Global Forecast to 2019, The cost associated with implementing an inventory management system will require healthcare programs to cut back on production lead times and force distributors and other healthcare facilities to carry small amount of inventory. These factors can also increase the healthcare cost in the United States and change the laws and regulations to import these products. Some challenges faced by healthcare supply chains are the inaccuracy of products being imported and the like hood of these products being contrabands. However, developing and inventory management system can help millions of Americans have access to better
Through a review of literature, problems have been identified in the current supply chain activities in the health care industry, impacting on the overall efficiency in the medical sector. Although the success of SCM in manufacturing industry sectors in our economy has been commended through several sources (Stevenson, 2007; Youngdahl, 2000; Gryna, 2001), it has also been frequently pointed out, by many academics, that the current application of SCM in the health care sector is extremely poor. In contrast to other manufacturing logistical structures, the health care industry is not effectively utilizing the benefits that could be derived from establishing an effective SCM (Rai, Patnayakuni, & Seth, 2006; Sing, 2006; Long, 2005).
Operating room supplies are a variable cost. Supplies are a variable, supplies refer to the necessary supplies required to perform the procedure or service. Managers must be aware of supplies on hand and every organization must have a process in place that informs the purchasing agent or department when supplies are low and need to be ordered. There are many software systems that are available to assist in the tracking process. This is often referred to as supply chain management. The ultimate goal of supply chain management is to reduce inventory assuming that the products will be readily available when needed. Supplies in a facility that performs elective surgeries will vary due to the case volume, therefore supplies are considered a variable costs. The operating room manager would be involved in notifying the purchasing manager of a special supply that the physicians are requesting. The purchasing manager would be responsible for negotiating the best possible pricing. Another variable cost would be patient meals. The number of meals depends on the patient
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This white paper focuses on how hospital and Integrated Delivery Networks (IDNs) can manage their inbound supply chain management to reduce unnecessary costs and increase efficiences that can significantly improve their
Supply chain management (SCM) is the supervision of materials, information, and finances as they move in a process from supplier to manufacturer to retailer to the cessation consumer. There are three crucial flows of the supply chain: The product flow, the information flow and the finances flow. SCM involves coordinating and integrating these flows both inside and between
Supply change management (SCM) is active in many organizations today. The purpose of SCM is to maximize the company value in order maintain a competitive advantage in the market place. As an Operational Managers (OM) it is essential to oversee the supply chain within an organization. The OM responsibility is to manage the supply chain flow, and to ensure the supply chain has a quality design in order to reduce cost and drive efficiency. (Reid & Sanders, 2010) An organization supply chain includes activities such as product development, sourcing, productions, logistics, material, and other information systems needed to coordinate the movement of goods from suppliers to manufactures, and to final customers.