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What Is Healthcare Supply Chain?

What Is Healthcare Supply Chain
26 Apr What is the Healthcare Supply Chain? – Supply chains have been a hot topic since the start of the COVID-19 pandemic – everything from the production of toilet paper to the healthcare supply chain. Most Americans are unaware of the various aspects of the healthcare supply chain that allow patients to maintain their health and obtain vital treatments.

  • From the manufacturer to the pharmacy, medicines and other healthcare products make many stops before reaching one of the 6,090 hospitals or over 67,000 pharmacies in the United States.
  • The sheer number of medicines and products moved by the supply chain adds to this complexity.
  • According to the IQVIA Institute for Human Data Science’s April 2018 report “Medicine Use and Spending in the U.S.”, over 5.8 billion prescriptions were filled in 2017 in the United States alone.

Innovations and partnerships at every stop of the supply chain help guarantee that medicines are moved to the places where patients most need them. But what do we mean when we say the healthcare supply chain? The healthcare supply chain is an extensive network of systems, components, and processes that collectively work to ensure medicines and other healthcare supplies are manufactured, distributed, and provided to patients.

  • This complex global system is established with ample built-in protections to ensure that medications and other medical supplies are manufactured and delivered in a timely fashion – even through pandemics or natural disasters.
  • The most vital of these protections is the supply chain’s ability to predict, plan, and react to potential disruptions in one or more links of the chain through a diverse pre-established global network.

There are many players in the healthcare supply chain, such as pharmacies and pharmacists across all practice settings, health systems and hospitals, pharmaceutical quality standard developers, and health insurance providers – but manufacturers and distributors are key to the healthcare supply chain.

Manufacturers are the first link in the supply chain and make the medicines and healthcare supplies we depend on. Manufacturers manage the distribution of their product from the point of production to wholesalers and in some instances, directly to a pharmacy or hospital. Distributors are the second link in the healthcare supply chain.

Distributors purchase drugs and medical products in bulk from manufacturers, and meticulously maintain large stocks in strategic locations across the country. Some wholesalers specialize in dealing with a particular range of products, such as biologics or to specific types of customers, such as nursing care facilities.

Healthcare supply chains take a great deal of time and effort to construct – many beginning years before a medical product is even approved for patient use. For example, developing a supply chain for medicine includes everything from contracting with various suppliers, to ensuring the availability of a manufacturer’s highly skilled labor force, to maintaining the critical quality control and testing systems needed to protect patients.

Over decades, the healthcare supply chain has painstakingly assembled substantial global networks to ensure that if one area or link of the chain is compromised, another can fill the gap. Additionally, the supply chain network is constantly investing in the design and ongoing maintenance and modernization of the system itself. What Is Healthcare Supply Chain

What does a supply chain system do?

Understanding a Supply Chain – A supply chain includes every step that is involved in getting a finished product or service to the customer. The steps may include sourcing raw materials, moving them to production, then transporting the finished products to a distribution center or retail store where they may be delivered to the consumer.

  • The entities involved in the supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers.
  • The supply chain begins operating when a business receives an order from a customer.
  • Thus, its essential functions include product development, marketing, operations, distribution networks, finance, and customer service.

When supply chain management is effective, it can lower a company’s overall costs and boost its profitability. If one link breaks, it can affect the rest of the chain and can be costly.

Why organizations should strive to measure health supply chain performance?

Why are supply chain metrics important? – Supply chain metrics are essential for measuring a company’s progress in achieving their goals. They provide visibility into key functions, and ensure that every part of the supply chain is monitored and running smoothly.

  • As such, tracking supply chain metrics can help a business easily identify areas in need of improvement or where supply chain efficiency could be enhanced.
  • With a better understanding of their supply chain, businesses can be more proactive when facing challenges, and also increase their supply chain’s resilience and agility,

“I love ShipBob’s analytics tool. I like being able to look at the last seven days of shipping costs. It’s so nice to see exactly what the average shipping cost is and make sure the number that my Shopify store has customers paying matches what’s in the ShipBob dashboard.

What is supply chain process?

What is supply chain management (SCM)? – Supply chain management is the process of delivering a product from raw material to the consumer. It includes supply planning, product planning, demand planning, sales and operations planning, and supply management.

What is the supply chain model?

What Is Supply Chain Modeling? – Supply chain modeling represents a conscious attempt to bring order into a supply chain to achieve certain business objectives, such as lowest supply cost, on-time delivery and an ability to cope with disruption. It deals with questions such as:

  • What to produce
  • Market identification
  • Siting of production plants
  • Finding the best suppliers
  • Supplier and plant locations
  • Transportation and inventory
  • Distributing finished products
  • Warehousing strategies

Supply chain theory is well-established. However, when setting up a supply chain model, there’s an almost endless list of requirements to meet, and as the number of SKUs, plants, and customers grows, the model’s complexity increases exponentially. What may have started as a relatively simple exercise of optimizing supply and distribution costs for one or two products quickly turns into a nightmarish exercise where it’s almost impossible to engineer the optimal solutions.

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Why is it important to improve supply chain management?

Streamlining supply chain activities also results in faster production. This allows businesses to better compete and in turn, creates value for customers. Accurate information about a supply chain saves companies money. It helps manufacturers and retailers produce and transport only what they can sell.

What are the 4 R’s of supply chain management?

The logistics and e-commerce pro – Published Mar 3, 2020 The management of today’s supply chains is a difficult undertaking. In the context of globalization, consumer preferences and overseeing product life-cycles organizations must gain a competitive advantage.

  1. To do this it is important for companies to adopt a framework for a customer-focused supply chain strategy. Dr.
  2. Pankjai Madhani, an associate Dean and professor at the ICFAI Business school in India, models and emphasizes the benefits of these competitive priorities in a supply chain.
  3. His research examines the 4 Rs, responsiveness, resilience, reliability and realignment.

The first is responsiveness, it is a company’s ability to successfully and efficiently shift their current state of affairs and respond to short-term market changes. Combine that with the perception of their consumers, workforce talent and other stakeholders they can push towards a favorable strategic policy in which their business can effortlessly execute.

Next, there is resilience, which is the ability of a business to promptly anticipate and adapt to long-term disruptions while sustaining business operations, protecting its workforce, assets and general brand quality. We also have reliability. This is when ambiguity on the supply side (distribution points and manufacturing sites) of an organization occurs and is safeguarded with a contingency plan that is designed to protect against various economic and environmental factors.

Finally, we have realignment which is basically changing the way a company conducts business. This is necessary if they are under-performing when compared to other similar businesses in the same industry. It also allows the business to share the costs and benefits across the various business partners in the supply chain.

I think it is important to understand how each of these priorities differ and how they can be compatible when building out your supply chain approach. Knowing if your organization can adopt and apply any one of these in any moment can be the difference between functional long-lasting success or imminent disaster.

They can all go hand-in-hand and will complement each other if planned for properly. For example, a manufacturing company can feel the effects of the imposed tariffs. These have had negative effects on American consumers of steel and aluminum. Because of this there have been thousands of requests by American manufacturers for exemptions from the import tax.

The higher prices that they are having to pay now are making them less competitive. A responsive company might remedy this situation by shifting some of their manufacturing out of the United States. A company can also incorporate resiliency into their supply chain by creating a standard operating process that would allow for flexibility in design, labor and resource allocation.

For instance, one could allow for an available part inventory or have a multitude of suppliers. However, this should only be a temporary solution as housing space is limited for most and the cost can rise exponentially if not properly managed. You can also encourage your teams to be empowered to make decisions or recommendations and/or provide feedback that could possibly mitigate a potential disruption.

  1. Reliability makes a great supply chain that will yield consistent performance through sustainability.
  2. This is a top priority for many supply chain professionals and a complex problem to get right.
  3. Implementing a solid plan that enhances performances and reduces costs and delivers product to customers on-time is mission critical.

Collaborating with reliable suppliers and logistic business partners is a way to create visibility throughout your organization. Embracing consistent order management techniques, capacity planning, materials requirements planning (MRP) and utilizing a transportation management system (TMS) are a few of the ways businesses can create reliability.

Through realignment it is paramount to define and communicate a clear corporate vision. This needs to be specific and measurable and communicated repeatedly. By prioritizing your organizations objectives and defining what your supply chain needs to be efficient at can help determine what can be done in-house and what needs to be outsourced.

Structuring and aligning your goals and finding suppliers whose vision matches that of your own business drives and boost performance on both sides. It is also worth noting that you should plan on refreshing your alignment process using a strategic planning cycle.

Leaving your supply chain fresh and current will do more for your bottom line than one that goes years without ever evolving. All of the 4Rs are equally important and can be of great benefit to any organization. However, I am a firm believer in having a resilient supply chain strategy because it accounts for flexibility throughout the chain.

A resilient supply chain requires flexibility and a leader whose vision can guide others towards the same vision. They must also take input from management and other individual contributors better understand operational goals and deadlines. This type of collaboration lessens the bullwhip effect by allowing the business to stay alert and maintain visibility.

What are the 4 P’s of supply chain management?

As a top decision-maker in your company, you may feel as though you’re running around like a chicken without a head just trying to keep up with all the demands on your time. Although the circumstances around COVID-19 have complicated the management of your portfolio, it is essential for you to consider the four key factors that will have a major impact on your revenue: Product, Price, Place and Promotion.

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What are the 3 key points of supply chain management?

3. Role Clarity: – Get organized. Supply Chain is a team sport. Silo-ed, uncoordinated (different than decentralized) or poorly staffed supply chain structures can result in decisions that sub-optimize the whole or outright conflict with each other. Even “segmented” channels need to be considered in the whole, somewhere.

  1. Supply chains can be complex and distant requiring constant attention.
  2. You must invest in either robust tools supporting the process or appropriate head count to compensate.
  3. This breaks into a couple of key elements: a) The specific jobs or activities.
  4. Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery).

Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are. Manufacturing (make) is often structurally not part of the actual Supply Chain team but is literally surrounded by it and the activities are highly interdependent.

In the preferred model of a demand driven Supply Chain a demand forecast drives both production planning and supply chain planning which in turn drives procurement directly and purchasing strategically, Purchasing is also influenced by the forecast directly. Supply Chain planning and demand planning are different.

Future Healthcare Supply Chains with Prashant Yadav

The demand planner’s role is to be the custodian of a high level of forecast accuracy compared to actual demand. If there is not a credible owner of demand planning (beyond finance gathering forecast data) in the organization then supply chain needs to account for that.

  1. I can’t over-emphasize the importance of a good item, location and time sensitive demand forecast to supply chain’s success.
  2. Think of it like a TV picture where the demand/forecast is the cable signal input and Supply Chain is the TV set itself.
  3. Regardless of how fantastic the set is if the input signal is poor or corrupt the picture on the set will be bad.

And there’s very little the rest of the Supply Chain group can do to fix it other than educated guesses. b) The talent itself, Make sure you staff the right people. Internal moves are great because they shorten or eliminate the company specific learning curve and can further employee development and engagement, but it can be dangerous to be a completely “homegrown” supply chain team.

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What Is Healthcare Supply Chain

What are the 5 flows of supply chain?

PowerPoint presentation slides – : Presenting this set of slides with name 5 Major Flows In Supply Chain. This is a five stage process. The stages in this process are Supply Chain, Product Flow, Financial Flow, Information Flow, Value Flow, Risk Flow. This is a completely editable PowerPoint presentation and is available for immediate download. Download now and impress your audience., 3000) } })” action=”” @submit.prevent=”submitForm”> Customer Reviews Rating: 0 % of 100 Rate this Product Rate this Product: % of 100 People who downloaded this PowerPoint presentation also viewed the following :

What are the 5 simple supply chain flows?

The Five Major Flows in Supply Chain Supply Chain is the management of flows. There are Five major flows in any supply chain : product flow, financial flow, information flow, value flow & risk flow. The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.

The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements. The information flow involves product fact sheet, transmitting orders, schedules, and updating the status of delivery. THE PRODUCT FLOW : Product Flow includes movement of goods from supplier to consumer (internal as well as external), as well as dealing with customer service needs such as input materials or consumables or services like housekeeping.

Product flow also involves returns / rejections (Reverse Flow). In a typical industry situation, there will a supplier, manufacturer, distributor, wholesaler, retailer and consumer. The consumer may even be an internal customer in the same organisation.

  • For example in a fabrication shop many kinds of raw steel are fabricated into different building components in cutting, general machining, welding centres and then are assembled to order on a flatbed for shipment to a customer.
  • Flow in such plant is from one process / assembly section to the other having relationship as a supplier and consumer (internal).

Acquisition is taking place at each stage from the previous stage along the entire flow in the supply chain. In the supply chain the goods and services generally flow downstream (forward) from the source or point of origin to consumer or point of consumption.

  1. There is also a backward (or upstream) flow of materials, mainly associated with product returns.
  2. THE FINANCIAL FLOWS: The financial and economic aspect of supply chain management (SCM) shall be considered from two perspectives.
  3. First, from the cost and investment perspective and second aspect based on from flow of funds.

Costs and investments add on as moving forward in the supply chain. The optimization of total supply chain cost, therefore, contributes directly (and often very significantly) to overall profitability. Similarly, optimization of supply chain investment contributes to the optimisation of return on the capital employed in a company.

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In a supply chain, from the ultimate consumer of the product back down through the chain there will be flow of funds. Financial funds (Revenues) flow from the final consumer, who is usually the only source of “real” money in a supply chain, back through the other links in the chain (typically retailers, distributors, processors and suppliers).

In any organization, the supply chain has both Accounts Payable (A/P) and Accounts Receivable (A/R) activities and includes payment schedules, credit, and additional financial arrangements – and funds flow in opposite directions: receivables (funds inflow) and payables (funds outflow).

The working capital cycle also provides a useful representation of financial flows in a supply chain. Great opportunities and challenges therefore lie ahead in managing financial flows in supply chains. The integrated management of this flow is a key SCM activity, and one which has a direct impact on the cash flow position and profitability of the company.

THE INFORMATION FLOW : Supply chain management involves a great deal of diverse information–bills of materials, product data, descriptions and pricing, inventory levels, customer and order information, delivery scheduling, supplier and distributor information, delivery status, commercial documents, title of goods, current cash flow and financial information etc.–and it can require a lot of communication and coordination with suppliers, transportation vendors, subcontractors and other parties.

  • Information flows in the supply chain are bidirectional.
  • Faster and better information flow enhances Supply Chain effectiveness and Information Technology (IT) greatly transformed the performance.
  • THE VALUE FLOW: A supply chain has a series of value creating processes spanning over entire chain in order to provide added value to the end consumer.

At each stage there are physical flows relating to production, distribution; while at each stage, there is some addition of value to the products or services. Even at retailer stage though the product doesn’t get transformed or altered, he is providing value added services like making the product available at convenient place in small lots.

These can be referred to as value chains because as the product moves from one point to another, it gains value. A value chain is a series of interconnected activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various product services), delivery to final customers, and final disposal after use.

That is supply chain is closely interwoven with value chain. Thus value chain and supply chain are complimenting and supplementing each other. In practice supply chain with value flow are more complex involving more than one chain and these channels can be more than one originating supply point and final point of consumption.

In chain at each such activity there are costs, revenues, and asset values are assigned. Either through controlling / regulating cost drivers better than before or better than competitors or by reconfiguring the value chain, sustainable competitive advantage is achieved. THE FLOW OF RISK : Risks in supply chain are due to various uncertain elements broadly covered under demand, supply, price, lead time, etc.

Supply chain risk is a potential occurrence of an incident or failure to seize opportunities of supplying the customer in which its outcomes result in financial loss for the whole supply chain. Risks therefore can appear as any kind of disruptions, price volatility, and poor perceived quality of the product or service, process / internal quality failures, deficiency of physical infrastructure, natural disaster or any event damaging the reputation of the firm.

Demand risks – related to unpredictable or misunderstood customer or end-customer demand. Supply risks – related to any disturbances to the flow of product within your supply chain. Environment risks – that originate from shocks outside the supply chain. Business risks – related to factors such as suppliers’ financial or management stability. Physical risks – related to the condition of a supplier’s physical facilities.

Internal risks are driven by events within company control:

Manufacturing risks – caused by disruptions of internal operations or processes. Business risks – caused by changes in key personnel, management, reporting structures, or business processes. Planning and control risks – caused by inadequate assessment and planning, and ineffective management. Mitigation and contingency risks – caused by not putting in place contingencies.

INTEGRATION OF FLOWS IN SUPPLY CHAIN : Supply chain management integrates key business processes from end user through original suppliers, manufacturer, trading, and third-party logistics partners in a supply chain. Integration is a critical success factor in a dynamic market environment and is prerequisite for enhancing value in the system and for effective performance of the supply chain by sharing and utilization of resources, assets, facilities, processes; sharing of information, knowledge, systems between different tiers in the chain and is vital for the success of each chain in improving lead-times, process execution efficiencies and costs, quality of the process, inventory costs, and information transfer in a supply chain.

Integration leads to better collaboration for synchronized production scheduling, collaborative product development, collaborative demand and logistic planning. Also with increased information visibility and relevant operational knowledge and data exchange, integrated supply chain partners can be more responsive to volatile demand resulting from frequent changes in competition, technology, regulations etc.

(capacity for flexibility). Integration is required not only for economic benefits but also for compliances in terms of social and community, diversity, environment, ethics, financial responsibility, human rights, safety, organizational policies, industry code of conduct, various national / international laws, regulations, standards and issues. What Is Healthcare Supply Chain To achieve superior supply chain performance (cost, quality, flexibility and time performance) require multi-lateral integration : Internal / External integration; Functional integration, Geographical integration; Integration in Chains and networks; and Integration through IT.