Pondering about the acquisition of products and supplies is quite a task to many industries. The healthcare industry has not been exempted from this involving activity. With the high rate of the upward movement in prices of products and services in the industry, a lot of competition has been experienced. The materials flow channel is referred to as supply chain management. Mostly, it involves more than a step before the materials reach their intended destination. In the health industry specifically, the chain is described to be inherently complex. The products undergo a series of processes from the manufacturers, to the distributors, the hospital and finally to the consumers. One of the biggest drawbacks of the system is that each part of the supply chain operates independently making it ineffective due to time consumption.
The primary production involves the making of the active ingredient in case of the drugs. A longer period is experienced here due to downtimes in purification and assurance of hygienic measures. The distributors may decide to acquire the drugs either as a single entity or a Group Purchasing Organization to leverage their Economies of scale after they have been processed to their secondary and final stage. In addition to the already complex system, the involvement of insurance companies, government institutions, and regulatory agencies makes it even a more difficult situation. The system also suffers extensively on lack of information.
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In the most basic sense, any supply chain management has its primary focus as cutting the supply cost and concentrate on customer satisfaction. The flow of the materials from the manufacturers to the consumers should be cost-effective only achievable if the system found a way of coordinating all the parts. Additionally, an electronic manner of handling the inventories would boost the relationships between all the parts and reduce further uncertainties.
References
Adebanjo, D., Laosirihongthong, T., & Samaranayake, P. (2016). Prioritizing lean supply chain management initiatives in healthcare service operations: a fuzzy AHP approach. Production Planning & Control , 27 (12), 953-966.
Kwon, I. W. G., Kim, S. H., & Martin, D. G. (2016). Healthcare supply chain management; strategic areas for quality and financial improvement. Technological Forecasting and Social Change , 113 , 422-428.
Wang, Y., Wallace, S. W., Shen, B., & Choi, T. M. (2015). Service supply chain management: A review of operational models. European Journal of Operational Research , 247 (3), 685-698.
