Supply Chain Management in the Healthcare Industry:
This section shall be devoted in reviewing the literature written on the different solutions that may be used in order to overcome the challenges that has been earlier presented. Moreover, the review of these solutions is essential in determining the future of supply chain management within the healthcare industry. According to the MIT Center for Transportation and Logistics (2007), there is still a big opportunity that exists for members of the healthcare industry to improve the manner by which they manage their supply chains.
However, institutions of health care must continue to give special attention in solving and outgrowing the different problems mentioned above to ensure that they will receive the benefits that this management tool promises. It is because of the great opportunity present in the healthcare industry that may be used in such a way that the management of their supplies could be made efficiently, the MIT Center for Transportation and Logistics (2007) provided a discussion of how changes must be incorporated.
In the same manner, they also provided the steps of how institutions of health incorporate processes in order to ensure that their supply chain networks are properly integrated into their businesses, one of the necessary practices needed in order to ensure the efficiency of such. Without a doubt, as earlier established, the American healthcare industry, together with its counterparts in many other countries, is undergoing a rapid transformation on all its different aspects (MIT Center for Transportation and Logistics, 2007).
Because of this, members of this sector are usually filled with a lot of uncertainties, leading to the underdevelopment of their supply management practices. Apparently, this contributes to the failure of this particular sector in addressing the different problems enumerated in the previous section of this literature review despite the presence of a great opportunity to reinvent and reconstruct their SCM.
Because of this, the MIT center for transportation and logistics (2007) suggests that healthcare professionals must gain a better understanding of the environment where they are operating in. Through this, they would be able to help the decision makers in terms of identifying constraints, uncertainties and other opportunities that may help in transforming supply management practices within the health care sector. Aside from this, it is also important for members of the industry to define what is it that constitute their sector (MIT Center for Transportation and Logistics, 2007).
Obviously, it is because of the absence of the identity of the healthcare industry that researches have failed in determining its scope, components, key players, and so on. Moreover, it is because of the absence of such definition that it becomes impossible to understand the true nature of the said industry, leading to the misconceptions on why supply management is perceived to have relatively failed when compared to the other sectors.
In connection with this, the MIT Center for Transportation and Logistics (2007) reiterates that the complicated and unique types of relationships within this industry need to be understood so as to be aware of how supply management practices are conducted. Without a doubt, it is because of the abovementioned that the healthcare industry was unable to produce effective practices concerning supply management.
Because of this, the MIT Center for Transportation and Logistics (2007) notes of the need to incorporate structural changes to the basic architecture of the healthcare industry so as to ensure the effectiveness of their supply management practices, making it more competitive in the global arena. Aside from this, researchers such as Dudas (n. d. ), Page (2005a), Perry (2005) and Sargent (n. d. ) call for the implementation and constant development of product standards, (especially those developed by G1) within the healthcare industry that may be essential to improving the efficiency of supply management practices.
As earlier discussed, these standards are already being implemented within the industry, although Sargent (n. d. ) noted that it is still in its infancy. Thus, the further development and continuous implementation of such could eventually help the members of the healthcare sector in performing supply management practices efficiently, considering the success of these standards in other industries such as that of the retail and auto (Dudas, n. d. ).
In the same manner, Perry (2005) said that it is the Product Data Utility (PDU) of the Department of Defense that should be given importance to as this would enable members of the healthcare industry in order to incorporate established standards in the day to day transactions within this particular sector. In order to achieve this, however, the institutions of healthcare must also pay special attention to the development of core technologies that would enable them to efficiently operate the aforementioned standards.
According to Dudas (n. d. ) and DeJohn (2008) this could facilitate the easy flow of information from all the members of the supply chain, leading to the synchronization of data whose absence has greatly compromised the efficiency of SCM as noted by Perry (2005), DeJohn (2008) and Materials Management in Healthcare News (2006). In the same manner, as Dudas (n. d. ) points out, technological development and electronic commerce may bring a lot of benefits to the member institutions of the healthcare industry.
In fact, it is e-sourcing, or the use of modern technological advancements in the supply chain that the West Penn Allegheny Health System was awarded with the 2006 Most Wired Supply Chain Innovator Award (Kehoe, 2006). Generally, according to Kehoe (2006) the development of core technologies within the healthcare industry could bring about benefits such as the increase in the reliability of supply chain management practices and at the same time, an increase in the satisfaction being experienced by the customers.
As discussed, the efficiency of practices pertaining to efficient supply management needs the employment of a supply chain manager that would handle all the activities of the organization and at the same time, ensure that the goals of standardization are also met. According to Barrow (2005) and as earlier mentioned by Mckone-Sweet, Hamilton and Willis (2005) and the United Parcel Service of America (2005), the inability of healthcare institutions to standardize their products leads to the tendency of physician-preferred items to be relatively expensive.
This is due to the fact that it is the vendor who sells to the physician. Neil (2006) describes the problem of the organizations with regard to the problems brought about by the relationship between the vendors and the physicians, Vendors are for-profit companies that seek to keep their margins high, and that there’s nothing wrong with that; however, most manufacturers also are willing to partner with hospital customers to help them save money while still being bale to provide the quality products the hospital wants.
The role of the supply chain managers becomes necessary in a sense that they would be the ones transacting with the physicians, making the price friendlier, which then leads to the non-involvement of the vendors, who have the tendency to outwit the latter with regard to price. Because of the presence of the supply chain managers, prices are not only significantly lowered because it serves as a means by which prices are controlled (Burke, 2007) but at the same time, leads to the standardization of products.