Importance of Healthcare Supply Chain management

[Audio] Hello! My name is Alpana Damle, and I am an Undergraduate Teaching Lab Manager at a large public university. In this video, I will discuss the importance of supply chain management in healthcare and process improvements in the healthcare setting to enhance efficiency, reduce costs, minimize waste, and most importantly, improve patient outcomes. I will also discuss current supply chain processes at my workplace and how those could be improved for efficient operations using some of the SCM strategies..

[Audio] In simple terms, a supply chain is a network of individuals and companies that are involved in creating a product and delivering it to the consumer. A supply chain is usually depicted linearly to demonstrate the movement of finished goods from left to right, while funds flow in the opposite direction, from right to left. At each stage of the supply chain process, information flows in both directions. As goods are produced, they're moved through one of the 3 stages : Held in an inventory Transported directly to retailers Sold through distributors Information is the vital link in the process, and it makes or breaks the supply chain in some circumstances, such as during an emergency. Supply chain management (SCM), thus, is the coordination and management of activities involved in the production, distribution, and deliveries of goods and services from suppliers to customers. The primary focus of this process is to maximize return on investment, reduce inventory holding costs, and improve customer satisfaction. In supply chain management terminology, 'upstream' refers to closer to the manufacturer of goods and 'downstream' refers to closer to the consumer. Sometimes supply chains are depicted as circle diagrams to show that demand drives production, and thus, it is a continuous cycle. In some supply chains, all products do not pass through each component of the chain. Although the term supply chain management and logistics are used interchangeably, logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of consumption..

[Audio] The key components of healthcare supply chain management are: Procurement: identifying reliable suppliers, negotiating contracts, and ensuring timely delivery of goods and services. Inventory management: ensuring that healthcare organizations have enough inventory to meet patient needs without excessive stockpiling. Logistics: ensures a smooth flow of goods and services from suppliers to healthcare providers, and ultimately to patients. Information systems enable healthcare organizations to collect, analyze, and utilize data to make informed decisions and plan for future needs..

[Audio] Ensuring products end up with customers is an important objective for most businesses, but it is critical in healthcare, where lives depend on receiving supplies and medications promptly. Healthcare organizations often rely on international suppliers, making SCM crucial for managing global sourcing and mitigating risks associated with delays or shortages that can arise from geopolitical issues, trade restrictions, or unforeseen global events. A full supply chain often accounts for nearly 40% of a healthcare organization's spending. Effective medical supply chain management lowers costs and improves patient care and safety by preventing delays in treatment. It can also lower spending on supplies by up to 10%. Furthermore, healthcare is one of the most heavily regulated industries, and SCM plays an essential role in ensuring that hospitals, clinics, and pharmacies comply with regulations related to product sourcing, storing, and distribution..

[Audio] No discussion of healthcare supply chain is complete without an examination of the COVID-19 pandemic. According to the Supply Chain Quarterly, the pandemic highlighted the shortcomings of the U.S. and global supply chains, including an overreliance on limited suppliers and insufficient inventory management. It emphasized the need for a more adaptable healthcare supply chain, better coordination among global stakeholders, and more well-defined contingency plans. This will prevent price-gouging and other unethical practices, during not just once-in-a century events like the pandemic but also during other emergencies and natural disasters. During the pandemic, when widespread shortages of critical medical supplies and PPE struck, many domestic manufacturers and community groups stepped up to produce PPE and other critical supplies while existing supply chains failed. These distributed producers were linked via digital platforms and operated in their own communities, unlike the traditional, centralized manufacturing model of the U.S. healthcare supply chains. Unfortunately, many healthcare facilities struggled to take advantages of these local suppliers due to their distant corporate offices, cumbersome vendor approval processes, and inflexible funding rules..

[Audio] Healthcare supply chains routinely face other challenges such as : Overnight shipping of medical products during emergencies Hidden costs associated with wavering prices and quality downgrades Drug shortages Data shortages of supply chain performance Lack of integration between supply chains and supply chain management Mistakes in turning patient claim codes into charges Physician preferences for more expensive products Poor workflow design due to repeating processes.

[Audio] Steps that can be taken to make the healthcare supply chain more resilient: Collaboration between executives and physicians on the front line – in choosing supplies, setting up contracts, and managing utilization Creation of cross-functional teams – between supply chain leaders and clinicians Setting clear organizational goals, such as annual savings target to improve efficiency Paying close attention to analytics to identify and negotiate savings Tech innovations such as AI and machine learning that enable predictive analytics, demand forecasting, and optimization; blockchain technology to enhance transparency, security, and traceability in the chain Identify alternative suppliers before they're needed and add them to approved vendors list to g to during emergencies Hold disaster preparation drills that test supply availability Cut the red tape that prevents managers form using their discretion when making procurement decisions.