Procurement Management in Healthcare

This assignment delves into the critical role of procurement management within healthcare systems. It examines the complexities of managing medical supplies, addressing inventory control strategies like Just-in-Time (JIT) , and analyzing the impact of sustainable practices on supply chain operations. The text references various academic sources and industry best practices to provide a comprehensive understanding of this vital aspect of healthcare delivery.

OPERATION, LOGISTICS
AND SUPPLY CHAIN
MANAGEMENT

Contents
INTRODUCTION ..........................................................................................................................2
Critical review of operation, logistic and supply chain management theories............................2
Analytic discussion with application of theories in Watford General Hospital ..........................5
Triple bottom line ...........................................................................................................................7
CONCLUSION AND RECOMMENDATION ..............................................................................8
REFERENCES..............................................................................................................................10
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INTRODUCTION
Operation management is the field of management obsessed with creating and controlling
procedures of manufacture and recreating business transactions in production of products and
services. On other hand, logistics is normally implementing complex function of a company. It is
division of supply chain management that plans, tools and organizes the capable, impressive
forwards as well as reverse flow and storeroom of products and services(Lang and Chahal,2018).
This study is based on Watford General Hospital. This assignment will critically review of
different theories of operation, logistics and supply chain management. It will analysis and apply
appropriate solutions of operation management in the organization.
Critical review of operation, logistic and supply chain management theories
There are various theories relating to operation, logistic and supply chain management
which are as follows:
Operation management: Operation management refers to managing the resources of
organization in order to utilize them properly to achieve the objectives of organization
effectively and efficiently. Operation management theories include total quality management ,
six sigma etc.
Total quality management :This theory of operation management focuses on improving
the quality of product, process or services in order to fulfill customer satisfaction. Total quality
management assist in improving the quality of the organization products and services by
improving the performance of its employees (Hugos, 2018). This theory lays emphasis on
various principles for improving the quality of organization products and services. These
principles include Customer satisfaction, employee involvement, process centered and integrated
system etc. This theory of operation management helps in making effective decision for
improving the quality of its products and services. Organization can improve the quality of
products and services to improve its performance and profitability by implementing total quality
management theories.
Total quality management theory of operation provide various benefits to organization
which consist of Cost reduction , customer satisfaction, defect reduction etc. Cost is reduced by
implementing total quality management in different areas of operation such as scrap rework,
field services etc (Swink and et.al., 2017). This reduction in cost assists in increasing profitability
of the firm. TQM helps the organization in providing high customer satisfaction by providing
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customers with high quality products and services. This theory also assist in reducing defect
which leads poor quality of products and services.
On the critical not it has been evaluated that TQM provide various disadvantages to
organization such as expensive quality, discourages creativity, employee resistance etc.
Implementation of TQM is expensive as it requires additional training cost, team- development
cost, infrastructural cost etc. TQM also provide disadvantage of creativity and innovation as it
focuses on the improving quality and not on innovation and creation (Beske and Seuring, 2014).
TQM also provide disadvantage as implementing this theory require changing the mindset and
attitude of employees towards their job responsibilities.
Logistics management: Logistic management is a component of supply chain
management which is used for identifying customers demands in order to meet them with the
help of planning, controlling and implementing effective movement and storage of information
and products and services to the point of consumption.
There are various theories of Logistics management which includes inventory management
theory etc.
Inventory management theory: This theory is implemented in the organization to
manage the inventory of the firm to utilize the inventory in an effective and efficient way to
reduce wastage of inventory. Inventory management theory assist in maintaining the level of
inventory required by the firm by analysis the demands of the products and services in the
market to reduce wastage of inventory (Schönsleben, 2016). This theory of logistics helps in
controlling the flow of inventory according to its demand in the market. Inventory management
helps in increasing the profitability of organization and also assist in reducing chances of
inventory obsolesce.
Inventory management system helps in reducing the wastage of inventory by managing
the level of inventory according to the demands of its in the market. It helps in protecting firms
against variation in raw material delivery time (Prajogo, Oke and Olhager, 2016). This theory
also assists in scheduling production and avoids shortage of material and duplicate ordering. On
the critical note it has been evaluated that this theory cannot eliminate the business risk it just
assist in maintaining stock level in the firm. Inventory management theory requires proper
forecasting and estimates of the future demand which may no provide correct outcomes.
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Supply chain management: It is the management of flow of goods and it includes all
process which require transforming raw material into finished goods. Supply chain management
help in managing the flow of goods to the point of destination (Mangan, Lalwani and Lalwani,
2016). This theory helps in providing high customers services which assist in attracting more
customers towards the organization. This theory assists in managing the resources of
organization to maintaining the level of supplies to customers whenever the demand emerge.
Supply chain management includes theory of just in time.
Just in time theory: This theory is used by organization to increase the efficiency by
maintaining the inventory level according to the need of production. Just in time theory helps in
forecasting the demands of the customers in order to manufacture products according to the
demands by customers to reduce wastage and provide the product and service whenever their
demands exist. Just in time theory helps in maintaining the stock level and also assist in
improving the production process by utilizing the inventory in efficient way to produce high
quality product and provide customers with better experience to retain them in business. Just in
time theory helps in cutting cost of the inventory by managing the stock according to demands
of the product in the market.
This theory provides various benefits to organization by reducing wastage of inventory
by utilizing the stock properly according the demands of customers. This theory helps the firm
in making the production process easy and also assist in providing high quality products to
customers. This theory also provide advantage of low inventory holding cost as low inventory is
maintained by the firm (Christopher, 2016). Critically , there are various disadvantages provided
by this theory which include natural disaster can affect the flow of goods between organization
and customers which affect the production process and the product cannot be offered on time to
customers (Jacobs, Chase and Lummus, 2014).
Also, organization may not be able to meet the immediate demand of customers which
may affect the performance of the organization (Advantages & Disadvantages of Just-in-Time
Inventory, 2018). Furthermore, it provides disadvantage of not delivering the goods on time to
company by suppliers which may affect the production process due to which the organization is
not able to provide the products and services to customers on time.
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Analytic discussion with application of theories in Watford General Hospital
Total quality management might be referred as first quality oriented philosophy with
context of transition in Watford General hospital. It is based on three principals which are
continuous quality improvement, teamwork and customers focus. In the present scenario, limited
research addition has provided numerous issues for purpose of adopting these practices in
healthcare sector. It has also incremented in potential benefits as various initiatives are not
capable for delivering the promised outcome. There are various reasons of failure which could be
tracked for insufficient support with context of health professionals, absence of leadership
commitment along with tendency to observe TQM isolation instead of putting at strategy of
institution at core (Bajaj, Garg and Sethi, 2018).
Continuous quality improvement is used for simplifying task or process because of
automation, processes and computer application which was exploded. Medical is slow for
adapting this as healthcare as very notorious for base of enormous knowledge. There are various
hospitals and clinicians highly rely on data of paper and pen with context of files and charts to
store data. In the similar aspect, customer service is highly emphasized on managers'
responsibility for instilling environment focussed on customer and employee direction along
with considering adherence to dual aspect of quality of medical. This principle espouses
stakeholders and customer service on basis of needs and expectations. For example, effort for
giving better environment a clinical lab has rebranded its initiative as specific vision for future
and beyond at San diego. The main objective is to extract methods to work better and to attain
competitive advantage for improving quality of service which has been offered to customers
along with method of improvement about overall service to employees, patients and customers
(Mahdavi and et.al., 2018).
Teamwork is referred as employee engagement with context to quality. There are various
people who are involved for attaining common purpose and objective. The team members work
together instead of delegating its subordinates as performance is judged not only through
contribution on individual aspect but through group aspect as members must have presence of
over-aching objective with individual priorities.
Inventory management system: Logistics operation management
Hospitals are undertaken on fire for purpose of inefficiently managing its spending and
supplies on huge aspect with context of inventory. For purpose of streamlining hospital inventory
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management system along with medication distribution and automated supply, so there is
requirement of implementing best practices by hospital executives to invest in hospital logistics
operation management and to supply streamlines task of inventory management. The
implementation of healthcare supply chain management system it assists various hospitals for
decreasing its spending and to align budget. This healthcare management is very complex
because it is fragmented as it involves obtaining resources, delivering goods and services to
patients and providers, managing supplies. This process could be completed through physical
goods and information related to medical services and products which usually go by numerous
independent stakeholders consist of insurance companies, manufacturers, providers, group
purchasing organization and providers along with several regulatory agencies. On the contrary,
promoting efficiency in this Watford General Hospital, the physician practices could create
substantial reducing opportunities of cost with these organizations (Ahmadi, Pishvaee and
Torabi, 2018).
There will be adoption of automated inventory management system to assist providers of
healthcare to determine that products have damaged and recalled for being proactive with
ignoring these products or medications to its patients. In the similar aspect, automated inventory
management will determine devices and drugs which are used on frequent aspect and to forecast
potential shortages. The inventory managers of Watford General Hospital will access data and
set minimum inventory level which will place orders for items and adaptation to lean practices
with application of automated inventory management (Lang and Chahal, R., 2018).
The efficiency could be maximised with this automated inventory management system in
Watford General Hospital with application of asset tag. The inventory management system
would be assigning labels to equipments with featuring barcodes with unique identification
numbers of every item. This system will help in taking better decisions as it will collect data that
will convert analytics for better understanding of inventory application, waste and maintenance
requirements. Hence, it will create data driven decisions for forecasting demand in accurate
aspect of Watford General Hospital (DeBusk and et.al., 2018).
Supply Chain management operation: Just In time
Healthcare services employ both processes which will add value to basic input used for
creating final product. JIT would be focussing on process of supply chain not on product as it
could be applied to batch whether it is service or manufacturing. The ultimate objective of JIT is
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to attack waste as it could be attained through substituting non value added activities as it helps
in raising productivity to high extent. In the present scenario, healthcare industry is highly
dependent on technology along with JIT which helps to be highly progressive and efficient. The
specific objective of JIT is similar as their operation has need of cooperation and participations
of functional groups in each environment. In Watford General Hospital, the main issue is waiting
time along with process time which impacts service quality and elements of JIT with context of
flexibility and continuous improvements which will decrease in this particular duration
(Rosenthal, 2018).
In operations of Watford General Hospital, facility of storage and central supply stores
consist of surgical instruments, medicine and equipments. Further, production control is limited
as this process is performed through specialists. There is absence of simple line of command
structure as key personnel in process of production as medical specialists. The hospital services
are featured from fluctuations of supply and demand. Watford General Hospital is capable for
successful balance supply and demand for particular service as flexible workforce is considered
as integral element of JIT. Watford General Hospital could apply this concept in nursing area as
it could redesign nursing unit as per concept of patient focused care. Further, medical facilities
must have flexibility for filling prescriptions, perform tests and to treat patients with absence of
routing through one building to another. Appropriate layout contributes in giving quality of
healthcare services. These layout changes will be directly allowed for improving operations of
healthcare as it should reduce communication barrier and to facilitate effective communication
(Abedini and et.al., 2018).
Triple bottom line
The triple bottom line is a concept which broadens a business focus on financial bottom
line and includes social, environmental and economic consideration of an organisation.
Economic consideration : triple bottom line measure the economic value of Watford
general hospital. It includes personal income, establishment churn, establishment size , job
growth etc.
Environmental measures : It represents the measurement of natural resources and
reflect potentials influence to its viability. It includes air and water quality , energy consumption
and natural resources. Watford general hospital ensure that harmful products are not used for
consumptions.
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Social measures : it refers to social dimensions of a community or region and includes
level of education, access to social resources, health etc. Social measures include unemployment
rate, health – adjusted life expectancy etc.
CONCLUSION AND RECOMMENDATION
This report has summarised that different theories of operations, logistics and supply
chain management. Total quality management includes operation management, inventory
management theory involve in logistics and just in time includes in supply chain administration
in the organization. It can be concluded that continuous quality improvement and total quality
management that involves in applications of theories. Logistics operations management includes
in application inventory management system. Just in time involves application of supply chain
management operations. With the help of it, organization easily achieving goals and objectives
effectively and efficiently. Through theories of supply chain management, company meet
customer demand and reducing risk in the business.
Organization can follow total quality management theory for improving operations and
achieving goals as well as objectives of business. This theory is beneficial for reduction of cost,
customer satisfaction and defect reduction etc. for increasing productivity of company. They
should adopt inventory management in logistics management that helps in decrease wastage of
inventory and analysis of demand of product and services. This theory should helps in decreasing
the wastage of stock by managing level of inventory. Supply chain management should helps in
managing flow of products to the point of destination. Just in time theory include in supply chain
management that assists in maintaining inventory level according to the requirement of
production.
Watford General Hospital can adopt many applications of theories of operation, logistics
and supply chain management in their workplace. They should adopt total quality management
for provided numerous issues for objectives of adopting these practices in healthcare sector.
Company can utilize the continuous quality improvement helps in attain competitive advantage
for improving quality services to employees, patients and customer. Organization should
inventory management system includes logistics operation management. It involves gaining
resources, delivering product and services to patients and providers, managing the supplies.
Watford General Hospital should just in time in supply chain management helps in
increasing productivity to high extent. JIT assists in enhancing the flexibility and continuous
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improvement in services quality in health care sector. With the help of it, they should capable for
successful balance supply and demand for particular services as flexible manpower is considered
as integral part of just in time. Organization should apply this theory in nursing area as redesign
nursing unit and focusing on care of patients. Therefore, organization should adopt all these
theories and application for managing operations, logistics and supply chain in the workplace.
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REFERENCES
Books and Journals
Abedini, N. C. and et.al., 2018. “It's Not Just Time Off”: A Framework for Understanding
Factors Promoting Recovery From Burnout Among Internal Medicine Residents. Journal
of graduate medical education. 10(1). pp.26-32.
Ahmadi, A., Pishvaee, M. S. and Torabi, S. A., 2018. Procurement Management in Healthcare
Systems. In Operations Research Applications in Health Care Management (pp. 569-598).
Springer, Cham.
Bajaj, S., Garg, R. and Sethi, M., 2018. Total quality management: a critical literature review
using Pareto analysis. International Journal of Productivity and Performance
Management. 67(1). pp.128-154.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply
Chain Management: an international journal. 19(3). pp.322-331.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
DeBusk, B. C., and et.al., 2018. Automated system for medical item dispensing, billing, and
inventory management. U.S. Patent 9,990,466.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York. NY: McGraw-Hill/Irwin.
Lang, G. and Chahal, R., 2018. Information Sharing Increases Drug Sample Inventory
Management Efficiency in Healthcare Clinics: Evidence from a Quasi-Experiment. Journal
of Information Systems Applied Research. 11(1). p.4.
Mahdavi, M. and et.al., 2018. Recent Iranian health system reform: an operational perspective to
improve health services quality. International journal of health policy and
management. 7(1). p.70.
Mangan, J., Lalwani, C. and Lalwani, C.L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
Prajogo, D., Oke, A. and Olhager, J., 2016. Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive
performance. International Journal of Operations & Production Management. 36(2).
pp.220-238.
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Rosenthal, E., 2018. An American Sickness: How Health Care Became Big Business and How
You Can Take It Back. Missouri Medicine. 115(2). p.128.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Swink, M. and et.al., 2017. Managing operations across the supply chain. New York. NY:
McGraw-Hill Education.
Online
Advantages & Disadvantages of Just-in-Time Inventory. 2018.[Online]. Available
through :<https://smallbusiness.chron.com/advantages-disadvantages-justintime-
inventory-21407.html>
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