Introduction
The Healthcare Industry, with global health spending to increase at a rate of 5.3% per year for next four years(2014-17)[1], is one of the biggest industries. Despite of the high growth rate, there is an enormous pressure on healthcare providers due to high costs, government regulations, increasing competition, and requirement of delivering higher quality services. In this industry, supply chain costs constitute a significant fraction of the total costs. Further, its Supply chain management involves higher risks than other industries as it is associated with health of the people who have varied medical requirements. Thus, high costs and risks in healthcare supply chain drive the need increase its efficiency. Its most significant …show more content…
There are a number of issues leading to inefficiency of Healthcare Supply Chain.
• Fragmented Nature of distribution network: Healthcare Supply chain is fragmented where all the players act independently leading to conflict of interests among them. So, it becomes difficult to decide warehouse location, production level of goods etc so as to minimize the transportation and inventory costs. Another issue due to fragment network is difficulty in recalling drugs, if required by a company.
• Weak information flow in the system leads to further delays.
• Demand forecasting: Traditionally, there are no accurate forecasting methods for predicting requirement of drugs and other medical supplies. Due to long lead times, it becomes difficult to maintain right quantity of …show more content…
Partnering: The partnering among hospitals, suppliers and manufacturers of medical supplies is necessary for collaborative planning, forecasting and replenishment. [3]
Consolidation of suppliers, group purchasing contracts and consolidation of shipments can be regarded as steps towards risk pooling.
Benefits of using improving healthcare supply chain
This will smoothen the material flow, strengthen the information flow horizontally as well as vertically, reduce inventory levels and increase inventory turnover, improve buyer-supplier relations and encourage all the players to follow the best practices in the industry. It also employs indirect benefits like reduced paper and thus giving more time for value-adding tasks that strengthen the core
Conclusion
The healthcare supply chain is complex involving interdependent stakeholders. The efficiency of the system depends on the strength and co-operation of individual players. The consolidation at each layer of supply chain and centralized communication system are necessary to make the distribution network in Healthcare sector more
The Healthcare Industry, with global health spending to increase at a rate of 5.3% per year for next four years(2014-17)[1], is one of the biggest industries. Despite of the high growth rate, there is an enormous pressure on healthcare providers due to high costs, government regulations, increasing competition, and requirement of delivering higher quality services. In this industry, supply chain costs constitute a significant fraction of the total costs. Further, its Supply chain management involves higher risks than other industries as it is associated with health of the people who have varied medical requirements. Thus, high costs and risks in healthcare supply chain drive the need increase its efficiency. Its most significant …show more content…
There are a number of issues leading to inefficiency of Healthcare Supply Chain.
• Fragmented Nature of distribution network: Healthcare Supply chain is fragmented where all the players act independently leading to conflict of interests among them. So, it becomes difficult to decide warehouse location, production level of goods etc so as to minimize the transportation and inventory costs. Another issue due to fragment network is difficulty in recalling drugs, if required by a company.
• Weak information flow in the system leads to further delays.
• Demand forecasting: Traditionally, there are no accurate forecasting methods for predicting requirement of drugs and other medical supplies. Due to long lead times, it becomes difficult to maintain right quantity of …show more content…
Partnering: The partnering among hospitals, suppliers and manufacturers of medical supplies is necessary for collaborative planning, forecasting and replenishment. [3]
Consolidation of suppliers, group purchasing contracts and consolidation of shipments can be regarded as steps towards risk pooling.
Benefits of using improving healthcare supply chain
This will smoothen the material flow, strengthen the information flow horizontally as well as vertically, reduce inventory levels and increase inventory turnover, improve buyer-supplier relations and encourage all the players to follow the best practices in the industry. It also employs indirect benefits like reduced paper and thus giving more time for value-adding tasks that strengthen the core
Conclusion
The healthcare supply chain is complex involving interdependent stakeholders. The efficiency of the system depends on the strength and co-operation of individual players. The consolidation at each layer of supply chain and centralized communication system are necessary to make the distribution network in Healthcare sector more