Global Supply Chain Management in Healthcare: Strategies and Implications

This report discusses the design and implication of supply chain strategies in healthcare, how healthcare supply chains are adapted to suit the needs of different regions and a dynamic healthcare market, significance of global lead time and time compression in supply chain, how healthcare organizations use collaborations, lean principles and agility to improve their supply chain, and how advanced technologies are used by healthcare organizations to gain competitive advantage in the market.

Running head: GLOBAL SUPPLY CHAIN MANAGEMENT
Global Supply Chain Management
Name of the Student
Name of the University
Author Note

1GLOBAL SUPPLY CHAIN MANAGEMENT
Executive Summary:
Supply chain management is an important aspect of business management that deals
with how a product flows from the point of development to the customer. An effective supply
chain management aims to deliver products and services in a quick, dependable and flexible
manner while maintaining its quality and timeliness. This can be of significant implication in
healthcare where time is very valuable. The aim of this report is to discuss the design and
implication of supply chain strategies in healthcare, how healthcare supply chains are adapted
to suit the needs of different regions and a dynamic healthcare market, significance of global
lead time and time compression in supply chain, how healthcare organizations use
collaborations, lean principles and agility to improve their supply chain, and how advanced
technologies are used by healthcare organizations to gain competitive advantage in the
market. Through the discussion, it was evident that supply chain management in a healthcare
is a complicated and fractionalized process and requires continuous focus on quality and
agility of the services.

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Contents
Executive Summary:..................................................................................................................1
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Design and implementation of supply chain strategies within the sector:.............................3
How supply change environments are different from region to region:............................4
How the industry is adapted to specific market dynamics and environments:..................5
Importance of global lead time management and time compression.................................6
Configuring the healthcare supply chain to meet market needs:...........................................7
Collaboration:.....................................................................................................................7
Lean Principles:..................................................................................................................8
Agility:...............................................................................................................................8
Use of advanced technology to maintain competitive advantage:.........................................9
Big Data Analytics:............................................................................................................9
Internet of Things:..............................................................................................................9
Cloud Computing:............................................................................................................10
References:...............................................................................................................................11

3GLOBAL SUPPLY CHAIN MANAGEMENT
Introduction:
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).
Discussion:
Design and implementation of supply chain strategies within the sector:
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

4GLOBAL SUPPLY CHAIN MANAGEMENT
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).
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).
How supply change environments are different from region to region:
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

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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).
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)
How the industry is adapted to specific market dynamics and environments:
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:

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a) 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).
b) 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).
c) 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).
d) 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).
e) 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).
Importance of global lead time management and time compression
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.

7GLOBAL SUPPLY CHAIN MANAGEMENT
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).
Configuring the healthcare supply chain to meet market needs:
Collaboration:
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:
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

8GLOBAL SUPPLY CHAIN MANAGEMENT
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).
Agility:
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.
Use of advanced technology to maintain competitive advantage:

9GLOBAL SUPPLY CHAIN MANAGEMENT
Big Data Analytics:
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:
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:
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

10GLOBAL SUPPLY CHAIN MANAGEMENT
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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