A hospital should be with limited budgets in the supply chain remove the inefficient parts so that this money can be used to better serve his patients. In the healthcare, supply chains are often very poorly organized in comparison with companies. This is a problem that affects us all: about 25 percent of the cost of hospital related his offer.
Now the conditions are right for a new round of major healthcare supply chain improvements. Health budgets are very tight, supply chains have critical vulnerabilities, and providers have significant potential for the much-needed process improvements.
Supply chain improvement opportunities. This process improvement opportunities are rooted in five key areas: (1) disaster recovery; (2) supply chain integrity; (3) complexity of the network; (4) of intermediaries; and (5) value visibility. .
2.1 disaster recovery
In most companies, supply chain disaster recovery planning is severely lagged IT planning. This is an urgent problem in health care, because life can be at stake. Most current planning focuses on emergency response to short-term event such as September 11, but some of the most serious problems related to disasters with long lasting effects. For example, some drugs are critical in a factory. If the plant were destroyed, would resume two to four years. Some companies have consolidated their distribution systems, centralizing the most important products in one or two giant facilities. If any of these product flow destroyed would seriously hampered long.
The answer is not easy to export large quantities of product inventory, because healthcare supply chains are critical bottlenecks. The most effective action is to systematic contingency plans, including factors such as alternative production sites, manufacturing flexibility, develop factory direct shipping capabilities, offsite back-distribution capacity and critical emergency stocks.
2.2 Supply chain integrity.
Quality assurance as much integrity and tracking is a crucial healthcare supply chain function. It ensures that patients receive safe therapies, and that the problems are contained and minimized. Healthcare companies must carefully procedures and safeguards in this area, but the FDA has recently raised some huge fines for regulatory violations.
As products move through the healthcare supply chain, quality assurance increasingly difficult. Factories and distribution centers are self-contained and relatively few employees handle the product. The goods are clearly labeled. By contrast, environmental control in hospitals and clinics is much more complex and difficult. Many individuals treat goods and products are often difficult to determine because they are removed from the package.
Grey market diversion raises other important healthcare supply chain integrity issue. Many drugs and medical devices are very valuable, and prices vary greatly from country to country. Where the diversion occurs, it is not possible to be sure that the integrity of the product is maintained: This has problems that go far beyond economic issues made.
New technologies such as radio frequency identification (RFID), offer the prospect of ensuring the integrity of the supply chain. However, these new technologies require pervasive, costly changes in the supply chain, where systems, procedures, and facilities management. These changes require early planning and careful management.
2.3 Network complexity.
Healthcare supply chains are becoming more complex. Many large hospitals combine with clinics and other providers under common management. Some hospital groups buy medical practices to protect their patient intake. Increasingly, outpatient procedures are performed in offsite clinics and patient care is shifted to the house.
Traditionally, hospital materials managers focused on managing within a single hospital. The new network is the increasing complexity of these presentation materials managers with a new set of supply chain challenges. The skills and experience base needed for a complex, geographically dispersed supply chain management success are fundamentally different from those typically possessed by even educated, single-site managers. Hospital materials managers can succeed in this new environment, but they will be new training and training on supply chain design, complex process management and change management needed.
On a broader level, health care supply chains are fragmented. Manufacturers, distributors (including wholesalers), group purchasing organizations and suppliers operate largely independently of each other. The channel is often characterized by forward buying in anticipation of price increases. There is little question upstream signaling. For example, most manufacturers to learn about the actual demand of a subscription to a third-party service that use reports to six weeks after the actual sale is made the customer.
Healthcare supply chains must move towards an integrated “demand-pull” model, so the manufacturers have much more insight into actual consumption. In many other industries, this integrated supply chain system, the participants will be able to connect the production and distribution much more closely to the actual demand. All channel participants can see and understand what they need to do individually and together to successfully lower costs and increase service levels. Healthcare supply chains would release huge amounts of valuable resources by adopting this channel model; important elements, such as systems to provide real-time information on the patient’s point of infusion / injection, will now be put in their place.
The prospect of disintermediation, move product directly from manufacturers to suppliers, stronger growth in the healthcare supply chains. This process offers significant economic benefits. But it is only appropriate in certain situations, and it requires manufacturers and suppliers to develop new knowledge.
Traditionally, the hospitals are focused on the patient, the manufacturers on the development of new products, and distributors have filled the void. Distributors have always important value in terms of logistics economy, knowledge of the customer and product knowledge.
Now, however, the hospital consolidations, cost pressures and industry maturity are driving the supply chain participants towards the kind of differentiated channel structure prevalent in other industries. For example, $ 5 billion would retailer usually the source many fast moving products directly from the major manufacturers, while other products would flow through distributors to get logistical cost savings. By contrast, a multi-hospital provider good group have several billion dollars in supply costs, but would buy most products from distributors.
Most retailers and consumer products manufacturers to consider supply chain management is a central competence, while most hospitals and manufacturers of pharma / device not to the same extent. Yet, increasingly, the more advanced hospital groups and manufacturers are looking to do business directly with each other in an attempt to prevent a distributor marks. To do this, they are hard at work to the aforementioned supply chain expertise, and are turning to specialized third-party logistics providers to complement their capabilities.
At the same time innovative major distributors, value-added services, such as highly sophisticated descendants of vendor-managed inventory system created previously described. These services may be instrumental in the creation of the new major channel efficiency inherent to the integrated demand-pull channel model. Some have moved to offer a wider range of value-added services to diversify into related areas such as information systems. The explosion of the complexity of the network, previously mentioned, is to create significant new opportunities for distributors to develop value-added partnerships with manufacturers and suppliers. This process of repositioning will accelerate over time. Those who facilitate the change will gain market share, and those who try to turn the tide will lose both share and profitability stem.
2.5 Value sight
The current price structures and channel policies reinforce the inefficiencies of the fragmented healthcare supply chains. Distributors negotiate volume discounts from manufacturers, and offer discounts to providers. Group purchasing organizations have stepped into the breach to provide hospitals with a volume purchase options. Some distributors have chronic forward buying driven by the expected price increases Channel inventory, and in response, manufacturers have adjusted inventory management agreements that restrict distributor purchases. What is lost in this chaos is a clear understanding of the value creation, which is the prerequisite for significant improvements in supply chain efficiency. In well-functioning supply chains, each participant has an important role in creating unique, visible value product streams from source to consumption. In return, it can capture any part of this value as fee. It is this visibility, coupled with relentless pressure for improvement, which has resulted in major gains in supply chain efficiency in industry after industry in the past two decades. There is plenty of potential improvement is at stake in the healthcare supply chains so that a major competitor who steps up to the real, visible value that can bring supply chain integration may change the industry and be rewarded with big profits for years to come.
New management imperatives The main changes sweeping through the healthcare supply chains are creating new management imperatives for all concerned.
2.5.1 Hospital managers
Hospital managers make significant progress towards controlling the purchase of the purchase, but this is just the tip of the iceberg. They need to manage extended supply chain management, downstream to the complex networks that are created, and upstream to the major distributors who deliver their products and manufacturers who produce their products. The enormous potential profits stemming from the supply chain rationalization can provide much-needed funds to offset large cost pressures from obligations such poor care.
2.5.2 Distributor managers
Distributor managers should aggressively move their businesses. It involves understanding the differentiated supply chains that must inevitably evolve, and to facilitate their development. Some products and services disintermediation will experience will be created with the value added to replace the lost margins. Distributor managers will either surf this wave of change by working with their channel partners to create powerful integrated channel models in the process of strengthening the positioning of their business, or be swept away by it. Profitability management, the theme of this series of columns, can provide a critical path through this transition.
2.5.3 Manufacturer managers
need to shift their strategic perspective. These managers are used to making big bets on R & D. They can develop fifty new products in the hope that five will be blockbuster hits. It’s time to make an investment in developing new supply chain and customer management capabilities. And, it’s not a big commitment: With relentless pressure on prices and the industry maturity, manufacturers have a long-term need to work closely with their channel partners to develop new and renewable sources of value.
Eventually, all profits from the upcoming major surgery for healthcare supply chains we.
‘ The supply chain in health care is not well developed
‘ The health care want to reduce costs
‘ Many companies that specialize in healthcare
‘ The systems can be implemented relatively quickly
‘ Managers of hospitals do not dare to innovate
‘ Government meddling is very concerning rules
‘ little information to managers who work in health care
‘ Little knowledge at hospitals across the supply chain
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