How Smart Operations Help Better Planning And Replenishment?

Design and implementation of supply chain strategies within the sector

Supply chain is a network of interconnected systems which includes processes, activities, information, people and organizations that are involved in the process of moving products of services from supplier to consumer. The network spreads across the companies and their suppliers and retailers helping in the distribution of the products or services to the customers. Supply chain essentially includes every business which can be associated with the product, such as companies that are involved in the assembly of the product or delivery of the product parts to the manufacturing companies. For services, the supply chain can involve companies or organization that takes part in the designing and delivery of the services.

Supply Chain Management is a management strategy that is involved in the management of the flow of the product or services from the producers to consumers and involves every process involved in development of the product or service. The management allows the businesses to streamline their supply activities in order to gain appreciation from customers and gain a competitive market advantage. In healthcare Supply Chain and Supply Chain Management serves a vital purpose. The function of the Supply Chain in healthcare is the same as any other industry, that is, procuring supplies or resources, management of the resources or supplies, delivering the services or products to the healthcare providers and patients (customers).

Supply chain strategy is a part of Business Strategy that aims to improve supply chain capabilities and supply chain performance. It helps to improve the four main dimensions of competence on which business strategies are developed. These four domains of competence include quality (which includes indexes like reliability, performance and consistency), time bound (which includes the indexes of the speed of development and delivery), flexibility (which involves mixing of products or volume or packaging), and cost effectiveness (which involves the costs of labor, engineering, materials, and maintenance of quality) (Boonjing et al. 2015). An efficient supply chain is one which is efficient as well as responsive and is able to support the four dimensions of competencies named above. An effective strategy also comprises of two inter related components such as Logistical and Cross Functional. The logistical component can include the facilities, inventories and transportation, while the Cross Functional component can include information, sourcing and pricing. The strategy aims to improve the quality and competency of the supply chain by improving all these components. Different Supply Chain Strategies that are used in various industries include: Lean, Agile, Postponement and Speculation (Beske et al. 2014).

How supply change environments are different from region to region

Supply Chain in the healthcare industry is considered to be inherently complicated and fragmented process. Because of these, removing inefficiencies to reduce costs is not a simple process. Also, healthcare is a dynamic and challenging environment and supply chain in healthcare is significantly influenced by the change in the trend in healthcare delivery towards a more customer or consumer centered approach, taking into account the importance of customer satisfaction and quick service. The supply chain strategies most widely used in healthcare includes the agile and lean strategies. In addition, the strategies that are used in the improvement of the supply chain in healthcare include RFID, Management of Supply Utilization, Supply Chain Virtual Centralization and Vendor Managed Inventories (Dobrzykowski et al. 2014).

Healthcare Supply Chain involves various types of services and products as well as the involvement of stakeholders. The main aim of the supply chain is to enable delivery of the products or services on time in order to address the needs of the customers. Based on the activity, the supply chain in healthcare can be divided into three main groups: the producers (those who develop the medical supplies, medical devises and pharmaceuticals), purchasers (including wholesalers, distributors and GPO), and Providers (including hospitals, physicians, IDN, clinics, nurses and nursing homes). The stakeholder includes insurance companies (that interact with the producers), government (that monitor the purchasers) and regulatory agencies (that monitor and interact with providers) (Adebanjo et al. 2016).

The healthcare supply chain incorporates different Supply Chain theories in order to ensure capability and competence of the healthcare delivery to address consumer needs, ensure high quality of service and customer satisfaction and utilizing effective channel partnership. The main theories used to address such needs include:

Total Quality Management: This theory is based upon the principle of the development of supply chain through the maintenance of a work environment of excellence and quality. TQM focuses on the continuous improvement in the capacity to deliver products and services on time and supports the continuous development of skills and competencies in the healthcare workers. This continuous development strategy ensures that the employees in healthcare sector are able to continuously adapt to new challenges and needs of the industry to maintain the safety, quality, efficiency and flexibility of the service as well as maintaining its timeliness. Such approach can be seen in case of Australian Nursing and Midwifery Federation and the Nursing and Midwifery Board of Australia that incorporates TQM strategies to ensure quality of their service (van Schoten et al. 2016; Mosadeghrad 2015).

How the industry is adapted to specific market dynamics and environments

Channel Coordination: This theory implies the development and maintenance of effective partnership or coordination between the distribution partners or agencies. This ensures that distribution of the product or service is cost effective as well as consistent, and thus helps in the streamlining of the supply chain system. In healthcare, this theory leads to the utilization of collaborative planning, quick response, and vendor managed inventories and forecasting and replenishing strategies that ensures the supply chain is able to meet with its demands. Such approach is used by the Australian Pharmaceutical Industries where it involves collaboration between their suppliers and retailers to ensure efficient supply chain management (Pascual et al. 2016).

Customer Relationship Management: This theory mainly deals with improving the relation with customers or consumer, on in the context of healthcare, the patients. This theory ensures that the supply chain takes into account the customer perspectives and opinions and their delivery of care and products are in accordance to their needs. This also helps to address the customer centric operations in healthcare. Bethesda Hospital and Royal Melbourne Hospital has strong Customer Relationship management that helps to keep an effective relation with the patients and customers (Almunawar and Anshari 2014; Fortenberry and McGoldrick 2016)

The healthcare needs and customer opinions can vary from one region to another, and through the utilization of these theories, the healthcare industry is able to address the heterogeneous nature of healthcare needs in each region, tailoring its delivery system as per customer need and ensuring continuous development in the system to meet with the ever growing challenges and requirements of healthcare.

The healthcare organizations and companies are able to address the dynamic market of healthcare and maintain its capacity and competency through different types of strategies such as:

Setting up effective trading partner relations: This helps to connect to the various trading partners by developing a community of supply chain partners, and thus supporting more efficient and accurate transfer of information. This relationship helps in the movement of the services and products in a timelier manner (Dubey et al. 2017).
Minimizing wastage of resources: This strategy helps healthcare organizations to save additional expenses due to excess resources, such as supply materials that exceed demands. Instead, healthcare organizations can channel the additional resources to the communities using community support approaches (Cooper 2017).
Using data to understand the business requirements: Important data that can help to understand the healthcare needs and priority areas of each region can help to increase access to specific healthcare services to address the needs in those regions. Thus it helps to tailor the healthcare delivery to match those local market trends and needs (Genovese et al. 2017).
Automating Regional Care Network: This strategy allows the regional healthcare networks to function without outside interference and with autonomousness. This helps to support healthcare delivery decisions that best suits the needs of the local regions (Kache and Seuring 2017).
Developing and agile and adaptive service that involves quick planning and an integrated execution. This helps the healthcare organization adapt to changes and ensure the service and or product delivery is time bound and smooth (Dubey et al. 2017).

Lead Time Management is a SCM Strategy that manages the throughput time that is required for the completion of the product. The lead time can include procurement lead time, manufacturing lead time, distribution lead time, logistics lead time, setup time, waiting time and decision time. The aim of Global Lead Time Management is to minimize the long lead times to ensure faster delivery of products or services by reducing the setup time, move time, queue time and waiting time for services (Federgruen et al. 2017). Such example can be seen in case of NSW Nursing Association that applies efficient Global Lead Time Management strategies to ensure quick and responsive healthcare delivery.

Time Compression in Supply Chain aims to reduce the total time in the Supply Chain Cycle that is from the production of the product to its delivery to the customers. Time compression supports better consumer satisfaction through timely delivery of services. Example of such strategy can be seen in case of Australian Pharmaceutical Industry (Zhang et al. 2017).

Healthcare organizations can improve their operations and reduce the operational costs through supply chain collaborations. Collaborations can be developed between the producers, purchasers and providers as well as with the involved stakeholders such as the insurance companies, governmental agencies and regulatory agencies. This collaboration helps in the development of a supply chain community, which supports better sharing of information (Ramanathan 2018). The collaboration also helps to improve and synchronies the communication, execution, contracting, sharing, decision making and the development of knowledge in the healthcare delivery process. A collaborated communication is developed with the supply chain partners through frequent, open, two-way, multilevel and timely communication. Execution of processes can be collaborated by following the life cycle of the product from order to delivery and outlining the roles of each partner at specific points in the cycle (Källmén et al. 2017). Contract can be coordinated through standardization of parameters such as costs, quantity, price and deadline of the product or service delivery. Collaboration also requires sharing of accurate, appropriate, relevant, complete information as well as confidential business information and plans with the partners. In addition collaboration can also include joint decision making by the supply chain partners in the planning and operation of the supply chain, developing a collaborated knowledge through the approach that is accessible by all the partners and developed with inputs from everyone. Sharing of resources by the supply chain partners can also be useful in the development of collaboration in healthcare supply chain. Such collaboration can be seen in case of NSW Nursing Association (Ishii et al. 2017).

Lean Principles focuses on the development of a supply chain that operates optimally and prevents excess costs due to wastage and non value added activities. In healthcare Lean Principles can help to identify services that are not adding value to the customer service and incurring additional costs to the organization (such as services that are no longer needed) and preventing wastage of resources. To implement Lean Principles, healthcare companies can minimize wastage of resources or optimize the utilization, using technological advances to improve the supply chain, supporting transparency in the supply chain and the customer usage of the products or services visible, reducing the lead time, developing a level of flow for the products or services, increasing the speed and throughput of the services and minimizing variations, effectively collaborate with supply chain partners and focusing on the overall costs to fulfill such necessities. Strategies such as Six Sigma, 5S, Kaizen and Third Party Logistics can be utilized to implement Lean Principle in Healthcare Supply Chain. Australian Pharmaceutical Industries provides a good example of Lean Principle used in Healthcare Supply Chain (Vashi et al. 2018).

The principle of Agility in Supply Chain Management focuses on addressing the constantly changing needs and demands of the healthcare consumers or customers. The main components of agility are speed and flexibility and it helps to support better customer satisfaction through quick, effective and accurate function of the supply chain. Healthcare industries implement agility in their supply chain through five main dimensions such as alertness, accessibility, decisiveness, swiftness and flexibility (Boakye et al. 2017). Alertness helps the companies to be up to date and aware of the customer’s needs and high priority actions. It also helps the companies to respond to many sudden changes in the market or the demands and address them swiftly. Accessibility can ensure that the healthcare users and customers are able to access the services and products when they need it without many challenges. This can be quite important in rural and remote areas where access to care is limited. Decisiveness also helps the companies to make quick decisions and respond quickly to changing needs and environmental factors. This can help healthcare organizations to make important clinical decisions regarding the healthcare delivery systems that can suit the needs of the customers in the region. Flexibility helps to ensure that the service can be availed by the customers through various platforms and forms that can suit the customer’s situation or preference and thus support a customer centric care delivery (Mishra et al. 2018). Such strategies can be seen in case of Ramsay Healthcare, Sonic Healthcare and The Australian Institute of Health and Welfare.

Big Data Analytics can be understood as a process that analyzes a large, complicated and diverse array of data to identify any patterns, unidentified correlations, trends in the market or preference of the customers. Data collected from the supply chain partners and the healthcare industry providers can be collected by the companies in the supply chain network or community. This information can be used to make importance business decisions that influence the supply chain in healthcare (Wang et al. 2018). This strategy has been used by Bethesda Hospital to develop affordable care packages can covered the treatment of related health conditions that are most commonly diagnosed in the regions and helped to increase affordability and access to healthcare for people suffering from co morbid or coexisting conditions, thus providing them with a unique market advantage.

Internet of things is a concept that uses the concept of the computer networks and puts it within the context of regular objects such as appliances, vehicles and physical devices. These objects have electronic devices embedded in them along with software, sensors and components that can send and receive signals, apart from a form of connectivity for them. It allows these objects to be connected to a central network, which can allow monitoring of these objects as well as help to collect data more efficiently. Patient health records accessible from application installed on the customer’s phone or computer can transfer information directly from the healthcare providers, and the patient or the doctors can get real time updates from each other regarding clinical information (Firouzi et al. 2018). Such aspect has been used by Cavalry Bruce Private Hospital, where the doctors can send their prescriptions and recommendation to patient on their mobile app and collect the data from them. Connecting vehicles to the internet, by using technology like Radio Frequency Identification and GPS can help to tract Ambulances in transit and easy tagging. This can help the emergency departments to be ready to receive the patient beforehand thus saving valuable time. SA Ambulance Serve, Australia and Ambulance Service Australia use such technologies to track their ambulances and vehicles.

Cloud computing is a technologies that involves a pool of interconnected computers that share their processing powers which can be used by the supply chain to coordinate its actions and analyze the information or data. This also provides easy access to data from a centralized system and helps to develop a centralized management of information and technology. Electronic Health Records can be maintained and managed in a more effective manner using cloud computing, Cloud computing further helps in collaboration in supply chain, saves costs on data storage, makes sharing of information easier, helps to develop clinical researches, and also helps to implement telemedicine programs or processes (Darwish et al. 2017). Companies such as LiveCare and Telemedicine Australia provide telemedicine services to Australian citizens improving the cost and improving accessibility to care.
Conclusion:

Supply chain is a diverse yet interrelated set of activities that helps to move a product from its development to its sale. In healthcare, supply chain involves the delivery of healthcare products or services and can involve produces, purchasers and providers. Supply chain management aims towards improvement of the capability and performance of the healthcare delivery through improvement in quality, flexibility, reliability and timeliness of the healthcare service. The healthcare market is a dynamic one and the customers have constantly changing needs and expectations. In order to keep up with the dynamic market and changing needs the healthcare supply chain utilizes total quality control management and channel coordination to improve delivery of services and products, while through customers relationship management it maintains focus on customer satisfaction .Additionally the strategies of collaboration, agility and lean principles also help the healthcare organizations to develop a fast, accessible, quality and appropriate service or product. New technologies such as Big Data, Internet of Things, and Cloud Computing have opened further avenues for Supply Chain Management to further improve and streamline their services.

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