Supply Chain

If, as healthcare experts say, supplies gobble up 30 percent of a typical American hospital's annual budget, then upgrading the medical supplies system is a sensible investment. At a recent conference sponsored by the Health Sector Supply Chain Research Consortium at the W. P. Carey School of Business, Sisters of Mercy Health System's vice president of performance consulting, Marita Parks, and Thomas Macy, CEO of Nebraska Orthopedic Hospital, described two different approaches to the supply chain challenge.

A small but growing number of U.S. hospitals are using a version of quid pro quo to achieve two crucial goals: lock in the "rainmaker" physicians — the ones who are at the top of their specializations — and secure the best deal from suppliers. The most creative have found that this model produces stellar results when applied as a strategic tool, according to speakers at a recent conference presented by the Health Sector Supply Chain Research Consortium at the W. P. Carey School of Business.

What do you look for when you buy a pair of jeans? Color? Cut? Designer label? Price tag? One thing is certain: Even if you buy what you think is the same make/label/origin, year after year, it is an entirely different item with a brand-new geographic story. If you want to get a handle on the facts and fancy surrounding this ubiquitous icon of American consumerism, check out Rachel Louise Snyder's "Fugitive Denim: A Moving Story of People and Pants in the Borderless World of Global Trade." Chances are, you'll never buy a pair of jeans again without recalling the amazing stories contained in her book.

What will a typical supply management organization look like in 10 years? It's hard to say for sure, but it likely will be complex, high-tech, supplier network-driven, and spread out across the globe. Companies will be asking more of supply managers — they will be expected to contribute to revenue generation, innovation, collaboration, technology application and strategic management. A recent report co-authored by Phil Carter, a professor of supply chain management at the W. P. Carey School and executive director of CAPS Research, examines the challenges facing supply managers in the coming decade.

Supply expense is the second highest operational cost in hospitals, but traditional healthcare benchmarking doesn't pinpoint factors that contribute to supply-expense performance, nor does it enable hospital supply chain professionals to see how they stack up against similar organizations. To address these problems, the Association for Healthcare Resources & Materials Management (AHRMM) and the W. P. Carey School of Business recently launched SCMetrixTM, an online benchmarking tool. It aims to give hospital professionals a holistic view of supply chain performance and the factors contributing to it.