Healthcare organizations in many countries are compelled to pursue drastic supply cost reductions, while continuing to improve patient health outcomes, as they must meet ever increasing economic and performance pressures brought on by changes in national health policies. As demonstrated in many other industries, these improvements require more integrated Supply Chain Management (SCM) practices, processes, and systems. The author develops a strategic framework for Customer-Oriented or Patient-Driven SCM, integrating the evolving economics of the healthcare industry and the emerging dynamics of global supply chains. The chapter focuses on modern SCM approaches such as agile and lean supply chains, in order to efficiently realign hospitals and their Material Management Systems (MMS) on patient health outcomes.
TopIntroduction
The healthcare industry is inherently global as most high-end medical products, drugs, and equipment are manufactured by multinational suppliers. Healthcare product development, manufacturing, distribution, and group purchasing organizations (GPOs) are increasingly integrated through Inter-Organizational Systems (IOS) in order to optimize made-to-stock replenishment processes. This global context is creating unprecedented opportunities for hospitals in many countries, as they are compelled to pursue drastic supply cost reductions.
Yet healthcare organizations, whether private or public, must accomplish this transformation while improving patient health outcomes. They are submitted to increasing economic and performance pressures brought by changes in national health policies, entailing major strategic redirections.
As demonstrated in many other industries, these improvements require that healthcare organizations adopt integrated Supply Chain Management (SCM) practices, processes, and systems, especially concerning internal operations and their interface with external partners. A Customer-Oriented or Patient-Driven value perspective can serve as an anchor to reengineering hospital supply chains toward a lean and agile model, and help ensure regulatory compliance.
We develop a strategic framework for Patient-Driven SCM, integrating the evolving economics of the healthcare industry, the emerging dynamics of global supply chains, and the broad SCM approaches required to realign on patients key hospital Material Management Systems (MMS).
We first discuss the emerging efforts to refocus healthcare supply chains onto a customer-oriented or patient-driven perspective. We then address key challenges in implementing these principles for hospital materials management. We conclude with an outline of future research opportunities and challenges in hospital SCM, and some strategic implications for healthcare senior management.