Supply Chain Management – A Clinical as Well as an Administrative Function

Supply Chain Management has fast become a critical function in healthcare.  Given that supply chain costs are approaching 25% of the total hospital budget today, it is no wonder that there is increased attention to this hospital function.  But even more importantly, evidence shows that product selection and use have a significant impact on patient outcomes. High functioning supply chains directly drive high organizational performance and conversely, supply chain failures can cripple a hospital.  Consequently, decisions by supply chain managers are no longer just about ordering a required product.  Supply chain decisions also have a strategic impact on the overall performance of a healthcare system influencing quality performance.  For this reason, medical practitioners have an important reason (in fact some might say, a responsibility) to actively participate in supply chain decision-making.  At HSCX (www.hscxi.com) we have been helping healthcare supply chain organizations move from tactical procurement organization to strategic supply chain leaders.

High functioning supply chains directly drive high organizational performance and conversely, supply chain failures can cripple a hospital.  In managing the modern supply chain, leaders face multiple challenges to ensure performance excellence.  These are some of those challenges:

1. Dramatically reduce supply chain cost to affect product savings and avoid clinical staff reductions
2. Rapid rate of product innovation and implementation of new products
3. Elusive physician involvement in SCM decision making processes
4. Lack of accessible comparative product data despite the increased need for it
5. Increased emphasis on data analytics linking product use to patient outcomes
6. Stock outs and lack of access to certain products
7. High cost and integration of SCM information systems
8. Emphasis on the episode of care and its specific SCM challenges outside the hospital
9. Application of best practices in services procurement
10. Lack of SCM trained human resources at both entry level and senior level for succession

High functioning supply chain management departments are addressing these challenges.  These groups have the tools and know how to drive value from a well-managed supply chain.  At HSCX, this is our mission and our work where we train, assess, develop strategy, and support implementation to achieve such successes.