Supply Chain Management is defined as the management of processes occurring during the transportation of products from the manufacturer to the end user. It is a concept that has gained in popularity since the ‘90s and is utilized across various industries and platforms. In all industries it serves one purpose, to ensure that it gains profitability by adding value and creating efficiency in all these procedures, and in the long run increase customer satisfaction. In improving any activity within the supply chain, a user ultimately improves customer satisfaction (Belliveau, 2016). There have been many disputes over the definition of Supply Chain Management as different people refer to it in different manners. However, there is a unified agreement on its purpose and end results (Felea & Albastroiu, 2013).
Health Care Supply Chain Management refers to Supply Chain Management handled within the Healthcare Industry. It takes a similar definition to that of Supply Chain Management, but relates the end user as the patient. In this manner, it is defined as the regulation and management of all processes which occur during the transportation of products from the manufacturer to the patient (de Vries & Huijsman, 2011). It involves all procedures utilized in obtaining of resources, the management of those supplies and the processes which lead to the delivering of goods and services to patients and other providers. For example, patients require clean bed linen. The Hospital is tasked with identifying the various patients who require the linen, and from that identification, seek appropriate suppliers of Linen. Once a Supplier is identified, they agree on supply and delivery terms. Once the products are delivered, the Hospital identifies a suitable storage policy which allows for the continued deliverance of bed linen to patients when the need arises. The whole scenario involves several procedures, from Requisition, Purchasing, delivering and Storage or Inventory management (Belliveau, 2016).
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From the above example, it is clear that the Hospital has a recurrent need. In so doing, it can determine the best method to address this need by selecting one of two methods of Product delivery i.e. Supply to Stock, or Just in time deliveries. Each of these methods provide a suitable inventory management strategy for the Hospital and both allow for specific policies to be set in place.
In “Just in time supply”, the Supplier is requested to deliver as and when the products are required. The Organization thus has a task to ensure that at all time, there is an update on when the products will be required. In order to ensure that they are delivered as they are required, the Hospital orders for the products at such a time where the time it takes for the supplier to deliver the products will match the point at which the products are required. For instance, if the Linen being utilized is to be washed in a day’s time, the Organization has to ensure it makes the order prior to when the linen is required in order for the supplier to deliver when it is required (Christopher, 2013). The Hospital entirely depends on lead times to be efficient and as short as possible so as to meet the anticipated need. In this manner, the Hospital Responds to a need as it occurs. The Hospital in essence remains without stock or inventory in the warehouse.
Supply to stock on the other hand refers to the Bulk purchasing of products from a supplier. The Hospital purchases in one go and stores the products. When they are required, the Hospital consults its Inventory or Warehouse department who are responsible for holding the products. The Hospital in so doing, does not depend on Lead times, instead, they have their warehouse which stores the various products, and as they require them, they are distributed for their use. The Hospital employs specific inventory management methods which ensure the product is always available for distribution within the Hospital (Christopher, 2013).
References
Belliveau, J. (2016, August 5). Exploring the Role of Supply Chain Management in Healthcare. Retrieved August 29, 2017, from https://revcycleintelligence.com/news/exploring-the-role-of-supply-chain-management-in-healthcare
Christopher, M. (2013). Logistics and Supply Chain Management ePub eBook . United Kingdom: Pearson UK.
de Vries, J., & Huijsman, R. (2011). Supply chain management in health services: an overview. Supply Chain Management: An International Journal , 16 (3), 159–165. https://doi.org/10.1108/13598541111127146
Felea, M., & Albastroiu, J. T. (2013). Defining the Concept of Supply Chain Management and Its Relevance to Romanian Academics and Practitioners. Amfiteatru Economic , XV (33), 74–86.
