15 Things Non-Supply Chainers Should Know About Supply Chain Management Executives In the Healthcare Field

Attention Supply Chain Managers:  Do you suffer from your organization’s lack of awareness of your supply chain management role?  Here’s a short blog for you to share with your colleagues that will give them a better understanding of your role and the drivers of your day to day activities.  Share this post with others in your organization.


Supply chain management (SCM) executives are driven individuals … and ones typically with a very thick skin to deal the wide range of roles and interests of the people that he or she faces on a daily basis.  But in the simplest terms, they are driven by five basic objectives, which are known as the ‘five rights of supply chain management’.

Do whatever is needed to get:

  • The right product
  • At the right time
  • In the right condition
  • To the right place
  • At the right

In the healthcare field, this is further challenged by the need to deliver support for:

  • Best cost
  • Best quality of care
  • Highest patient outcomes

… and in alignment with the overall goals of the hospital system.

Due to the wide breadth of influence over almost all of the organization’s functions, the supply chain executive must confront some very significant challenges.

  1. Sourcing literally thousands and thousands of products
  2. Negotiating the best prices for these products
  3. Ensuring clinician access to all products subject to a set of usage rules
  4. Complying with commercial contract terms
  5. Complying with regulatory terms
  6. Forecasting the correct demand for all products
  7. Assuring that sufficient inventory is in place to satisfy the demands of clinicians (and not too much inventory nor too little)
  8. Physically distributing the products from the suppliers to the hospital cart
  9. Complying with hospital policies
  10. Fully understanding and providing for the clinical needs for all products
  11. Assuring appropriate transparency of actions with:
    • Clinicians
    • Finance
    • Suppliers
  12. Paying suppliers’ invoices
  13. Assuring high product quality
  14. Managing product shortages and product recalls
  15. Accessing new products

While some could add other challenges, this list alone is daunting.  It encompasses physical operations, commercial relationships, clinical relationships, financial operations, planning, people development, and advanced information systems.

While it’s not a competition as to who has the most demanding role in an organization, the supply chain manager’s role is one of the most challenging administrative roles in healthcare.  He/She serves and responds to almost every hospital stakeholder.  Often in the background, but critical to the successful operation of the entire hospital, the SCM professional is always at the forefront and ready to help when a crisis emerges.

Without a well-functioning SCM group, much of what occurs in the hospital grinds to a halt.  Given the crucial role that medical supplies, devices, and pharmaceuticals play in today’s healthcare environment (about 25% of a hospital’s total budget), clinicians need to know what challenges SCM managers and what drives them.  Consequently understanding SCM and supporting its efforts will contribute greatly to the effectiveness and efficiency of a modern hospital.  So next time that you see a supply chain manager, say hello or, even better, give them a big handshake!

Posted by: Jim & Gene


An HSCX Blog