In this, we will read about the Supply Chain Management in Healthcare The following contents will be described briefly:- 1. What is a supply chain? 2. The process of Views of Supply Chain 3. Objectives of Supply Chain Management 4. Supply Chain Decisions 5. Benefits of Supply Chain 6. Integrated Health Supply Chains 7. New Trends In Healthcare Supply Chain 8. Potential Risks to an Organization and Supply Chain 9. Strategies to Improve Healthcare Supply Chain Management

1. HEALTHCARE SUPPLY CHAIN
MANAGEMENT

2. WHAT IS A SUPPLY CHAIN?
 Supply chain management is a set of approaches
utilized to efficiently integrate suppliers,
manufacturers, warehouses, and stores, so that
merchandise is produced and distributed at the
right quantities, to the right locations, and at the
right time, in order to minimize system-wide costs
while satisfying service level requirements.
 A supply chain is dynamic and involves the
constant flow of information, product and funds
between different stages.
 The objective of the supply chain management is to
be efficient and cost-effective across the entire
system.

4. There are a number of important factors in supply
chains:
• The supply chain includes all activities and processes to supply a product or
service to a final customer.
• Any number of companies can be linked in the supply chain.
• A customer can be a supplier to another customer so the total chain can have
a number of supplier/customer relationships.
• Although the distribution system can be direct from supplier to customer,
depending on the products and markets, it can contain a number of
intermediaries (distributors) such as wholesalers, warehouses, and retailers.
• Product or services usually flow from supplier to customer and design, and
demand information usually flows from customer to supplier. Rarely is this
not so.

5. PROCESS OF VIEWS OF SUPPLY CHAIN
 Cycle View: The processes in the supply chain are
divided into a series of cycles each performed at
the interface between two successive stages of the
supply chain.
 Push/Pull view: The processes in the supply chain
are divided into two categories depending on
whether they are executed in response to a
customer order or in anticipation of the customer
order.

6. CYCLE VIEW OF SUPPLY CHAIN PROCESSES
Customer
Retailer
Distributor
Manufacturer
Supplier
Customer order
cycle
Replenishment
Cycle
Manufacturing
Cycle
Procurement
Cycle

7. PUSH/PULL PROCESSES
7 Prof. Raghavendran Venugopal, MBA Dept, Mijar
Customer
Retailer
Manufacturer
Customer order
cycle
Replenishment
and
Manufacturing
Cycle
Procurement
Cycle
Pull
Processes
Push
Processes
Supplier

8. 1. OBJECTIVES
2. To maximize the overall VALUE generated.
3. Minimize the cost of material and material
management.
4. Minimize inventory investment.
5. Ensure timely delivery of material at every
level of the supply chain and to customers.
6. Ensure quality of materials used in
services.
7. If needed, get product design help or other
services from supplier.

9. Supply Chain Decisions
 We classify the decisions for supply chain management into two broad
categories –
strategic and operational.
As the term implies, strategic decisions are made typically over a longer
time horizon .
On the other hand, operational decisions are short term, and focus on
activities over a day-to-day basis. The effort in these type of decisions is to
effectively and efficiently manage the product flow .
 There are four major decision areas in supply chain management:
1) location,
2) production
3) inventory
4) transportation (distribution), and there are both strategic and
operational elements in each of these decision areas.

10. Location Decisions
 The geographic placement of production facilities, stocking
points, and sourcing points is the natural first step in
creating a supply chain.
 The location of facilities involves a commitment of
resources to a long-term plan. Once the size, number, and
location these se are determined, so are the possible paths
by which the product flows through to the final customer.
 These decisions should be determined by an optimization
routine that considers production costs, taxes, duties and
duty drawback, tariffs, local content, distribution costs,
production limitations, etc . Although location decisions are
primarily strategic, they also have implications on an
operational level.

11. Production Decisions
• The strategic decisions include what products to produce,
and which plants to produce
• These decisions have a big impact on the revenues, costs
and customer service levels of the firm.
• Operational decisions focus on detailed production
scheduling. These decisions include the construction of the
master production schedules, scheduling production on
machines, and equipment maintenance.
• Other considerations include workload balancing, and quality
control measures at a production facility.

12. Inventory Decisions
 These refer to means by which inventories are managed.
Inventories exist at every stage of the supply chain as either
raw materials, semi-finished or finished goods. They can
also be in-process between locations. Their primary purpose
to buffer against any uncertainty that might exist in the
supply chain.
 Since holding of inventories can cost anywhere between 20
to 40 percent of their value, their efficient management is
critical in supply chain operations.

13. Transportation Decisions
 The mode choice aspect of these decisions are the more strategic
ones. These are closely linked to the inventory decisions, since
the best choice of mode is often found by trading-off the cost of
using the particular mode of transport with the indirect cost of
inventory associated with that mode. While air shipments may be
fast, reliable, and warrant lesser safety stocks, they are
expensive.
 Meanwhile shipping by sea or rail may be much cheaper, but they
necessitate holding relatively large amounts of inventory to buffer
against the inherent uncertainty associated with them. Therefore
customer service levels, and geographic location play vital roles in
such decisions. Since transportation is more than 30 percent of
the logistics costs, operating efficiently makes good economic
sense.

14. BENEFITS OF SUPPLY CHAIN
 Wholesaler keeps stocks of many suppliers, giving
retailer a choice of goods.
 Wholesalers are near to retailers and have short lead
time.
 Retailers carry less stocks as wholesalers provide
reliable deliveries.
 Retailers can have small operations, giving responsive
service near to customers.
 Transport is fewer with simpler, larger deliveries thus
reducing costs.
 Organization can develop expertise in specific types of
operations.

15. Integrated health supply chains
Similar to supply chain management in a manufacturing
setting, health supply chains can be characterized by different
modes of integration:
.Integration and co-ordination of processes.
.Integration and co-ordination of information flows.
.Integration and co-ordination of planning processes.
.Integration of intra- and inter-organisational processes.
.Integration of market-approach.
.Integration of market-development.

16.  Information technology and the deployment of e-business clearly are closely
linked to the co-ordination and integration of operational processes. Many
studies have advocated the important role information technology plays in supply
chain practices and it will be of no surprise therefore that many studies on health
care supply chains focus on the role of e-business technologies across hospital
supply chains
The application of electronic patient record systems is also a well-known
example of integrated information-technology being implemented in health
systems across the world.
Health care supply chain integration not only relates to the integration and
coordination of planning processes but can also be linked to joint “market
development” and offering new “care-products”.
The ongoing transformation within the healthcare sector towards greater
integration and more process-oriented health care chains requires a shift in
strategy, structure and control mechanisms. As such, the supply chain orientation
within the health care sector can be regarded as a complex social change
process.

18. NEW TRENDS IN
HEALTHCARE SUPPLY
CHAIN
 The healthcare industry is witnessing a sharp
rise in price in almost all its products and
services.
 The alarming high pace of upward movement
of cost is making the produce of the industry
beyond the reach of the mass.
 Certain new strategies are emerging in this
sector contributing towards efficient Supply
Chain Management practices.

19.  They are RFID, Supply Utilization Management,
Virtual Centralization of the supply chain and
Vendor Managed Inventory.
 In hospitals, the supply chain strategy should be
to maximize patient care. It enables it by:
Ensuring product availability
Minimizing storage space
Maximizing patient care space
Reduce material handling time and
costs for all medical staffs
Minimizing non-liquid assets( inventory)

20.  Healthcare industry is highly interdependent
and only one part can’t attain efficiency leaving
behind others.
 That is the reason why strategy such as Virtual
Centralization is proving to be popular and
successful.
 The specific benefits that RFID tags offer over
bar codes present an entirely new way of
working in the competitive business market.

21. POTENTIAL RISKS TO AN ORGANIZATION AND
SUPPLY CHAIN
 Labor unavailability
 Natural disasters
 Accidents
 Market challenges
 Sabotage, terrorism, crime, war
 Lawsuits
 Political uncertainty
 Technological trends

22. Supplier risks:
 Physical and regulatory risks
 Management risks
 Production problems
 Upstream supply risks
 Financial losses and premiums
Distribution Risks:
 Infrastructure unavailability
 Warehouse inadequacies
 Lack of capacity
 IT system inadequacies or failure
 Labor unavailability
 Long, multi-party supply pipelines
 Cargo damage or theft

23. STRATEGIES TO IMPROVE HEALTHCARE SUPPLY CHAIN
MANAGEMENT
 Manage contracts
 Develop effective inventory management
 Use technology and analytics to make operations
run smoother
 Have an effective pricing system in place
 Improve order accuracy and order cycle times to
lower costs

24. CONCLUSION
 Supply Chain Management (SCM) involves joint
collaboration between outsourcing partners, suppliers,
and customers.
 It comprises the transformation of goods from raw
materials through to the delivery of the finished product;
it also includes the management of key information
flows.
 SCM involves the integration of these activities and
aims to improve relationships between the various
parties, while achieving a sustainable competitive
advantage through high quality and lower cost products.
 SCM is closely linked with enterprise resource planning
(ERP) and electronic commerce systems