1. Describe the NBS supply chain. 2. How critical is stock-outs in the operations of UK’s NBS? 3. What accounts for ‘shrinkage’ in the NBS blood supply chain?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
CASE STUDY - The UK’s National Blood Service
No inventory manager likes to run out of stock. But for blood services, such as the UK’s
National Blood Service (NBS) the consequences of running out of stock can be particularly
serious. Many people owe their lives to transfusions that were made possible by the efficient
management of blood, stocked in a supply network that stretches from donation centres through
to hospital blood banks. The NBS supply chain has three main stages:
1. Collection, which involves recruiting and retaining blood donors, encouraging them to
attend donor sessions (at mobile or fixed locations) and transporting the donated blood to
their local blood centre.
2. Processing, which breaks blood down into its constituent parts (red cells, platelets and
plasma) as well over twenty other blood-based ‘products’.
3. Distribution, which transports blood from blood centres to hospitals in response to both
routine and emergency requests. Of the Service’s 200,000 deliveries a year, about 2,500 are
emergency deliveries.
Inventory accumulates at all three stages, and in individual hospitals’ blood banks. Within the
supply chain, around 11.5 per cent of donated red blood cells are lost. Much of this is due to
losses in processing, but around 5 per cent is not used because it has ‘become unavailable’,
mainly because it has been stored for too long. Part of the Service’s inventory control task is to
keep this ‘time-expired’ loss to a minimum. In fact, only small losses occur within the NBS,
most blood being lost when it is stored in hospital blood banks that are outside its direct control.
However, it does attempt to provide advice and support to hospitals to enable them to use blood
efficiently. Blood components and products need to be stored under a variety of conditions, but
will deteriorate over time. This varies depending on the component; platelets have a shelf life of
only five days and demand can fluctuate significantly. This makes stock control particularly
difficult. Even red blood cells that have a shelf life of 35 days may not be acceptable to hospitals
if they are close to their ‘use-by date’. Stock accuracy is crucial. Giving a patient the wrong type
of blood can be fatal.
At a local level, demand can be affected significantly by accidents. One serious accident
involving a cyclist used 750 units of blood, which completely exhausted the available supply
(miraculously, he survived). Large-scale accidents usually generate a surge of offers from donors
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wishing to make immediate donations. There is also a more predictable seasonality to the
donating of blood, however, with a low period during the summer vacation. Yet there is always
an unavoidable tension between maintaining sufficient stocks to provide a very high level of
supply dependability to hospitals and minimizing wastage. Unless blood stocks are controlled
carefully, they can easily go past the ‘use-by date’ and be wasted. But avoiding outdated blood
products is not the only inventory objective at NBS. It also measures the percentage of requests
that it was able to meet in full, the percentage emergency requests delivered within two hours,
the percentage of units banked to donors bled, the number of new donors enrolled, and the
number of donors waiting longer than 30 minutes before they are able to donate. The traceability
of donated blood is also increasingly important. Should any problems with a blood product arise,
its source can be traced back to the original donor.
Discussion Questions:
1. Describe the NBS supply chain.
2. How critical is stock-outs in the operations of UK’s NBS?
3. What accounts for ‘shrinkage’ in the NBS blood supply chain?
4. How difficult is it to control inventory items with a short shelf life?
5. What will it take to efficiently control such inventory?
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