The US healthcare system holds a large proportion of the economy. That said, the Patient Protection and Affordable Care Act (PPACA) has increased the pressure to healthcare institutions to manage their supply chains effectively. Supply chains are a term used in the management and distribution of inventory. The supply chains professionals in the health industry have the responsibility of ensuring that the available resources are utilized to the maximum in enhancing patients care and also delivering the clinical outcomes. Among the healthcare sectors affected by the management of supply chains is the pediatric hospitals. These hospitals attend to patients with varying ages, which makes it difficult for the supply chain managers. In the US, Children’s Hospital of Philadelphia (CHOP) is the largest pediatric hospital; hence, there are issues regarding effective management of supply chains. This paper gives an outline of supply chain issues in CHOP and some opportunities that can be used in the management and distribution of inventory in the hospital.
One of the main issues facing supply chains team in CHOP is the consolidation of inventory. CHOP has regularly experienced inconveniences with the consolidation of their inventory. Earlier, the hospital had been using the manual approach in the management of their inventory, which was time-consuming. This posed a problem to the supply chain managers as accounting for expired, and recalled items became increasingly hard. More often than not, the hospital would run out of inventory, which would take the medical practitioners to notify the supply chains managers — this affected service delivery in the hospital. Also, standardization of products to meet the patients’ standards became a problem due to issues with tracking of the hospital data. Likewise, leveraging the economies of scale in terms of inventory costs also became an issue due to lack of standardization.
Delegate your assignment to our experts and they will do the rest.
The supply chain team in CHOP, led by Brian Rounsavill, took the opportunity to improve on the best practices of the institution by responding to the continuously changing technologies. The hospital has implemented information technology infrastructure for managing inventory, which has eased the hospital processes and improved the patients’ care. Manual inventory tracking has been replaced with the inventory management system. The hospital has over 2000 bins, which are used to store the amenities used to attend to the patients. These bins are integrated with the system that generates reports twice daily, which makes it easier for inventory tracking. This enables the supply chains manager to stay up with updates of the flow of inventory and ensures that the hospital does not experience shortages of products. Likewise, the hospital can standardize its products, which meet the patients’ standards. Also, the workflow has been streamlined through technology; hence, medics don't have to undergo the rigorous process in the supply of these products within their working environment. Such practices have enhanced the patients' care within the CHOP.
Another challenge faced by CHOP is controlling the increasing costs and also the unpredictable nature of logistics. Most logistic managers are concerned with the transportation of their inventory. With the increasing logistical costs, transportation of inventory is becoming an issue of concern by the supply chain managers. Given that CHOP handles the largest number of children as compared to other pediatric hospitals in the US, the supply chain team is faced with the challenge of ensuring there is adequate inventory. Also, the cost of holding some highly perishable stock is becoming a challenge to CHOP. The supply chain team turned to fast and frequent delivery approach, that is, just-in-time delivery. This has exposed CHOP to logistic factors such as:
Partial shipments whereby CHOP incurs logistical costs relating to the delivery of partial stock. This usually occurs due to insufficient stock with suppliers and the urgency of the inventory to the hospital. This has often led to partial deliveries that are increasing logistical costs.
The placement of rush orders which occurs due to emergencies in the hospital or case the order supply has been delayed; the hospital deduces other mechanisms to make faster delivery of such inventory. This has seen CHOP turn into costly transportation methods such as premium freights.
In solving these logistical issues, CHOP has turned into third-party logistics companies (3PL) to manage the procurement and transportation of their inventory. Apart from procurement and transportation, these companies also deal with warehousing services which relieve the burden of storage to the hospital and especially when handling perishable inventory. These companies help CHOP in cutting down on the unpredictable and increasing logistical costs, which improves the economies of scale by meeting all clinical needs regarding inventory. As a consequent of the 3PL companies, the supply chains team of CHOP have an easier task of ensuring that the hospital does not run out of inventory, which could jeopardize service delivery to the patients.
Conclusion
The hospital systems put in place must rise up to address the barriers to effective supply chains management for improvement in patients’ health care. Challenges such as consolidation of processes and logistical problems are common hindrances to effective supply chain management. However, with proper strategies such as working with trusted third parties and through automation of processes, the supply chain teams can maximize on the effectiveness of inventory management while cutting down on the increasing costs which in turn promotes patients’ health care.
