Supply Chain

The health-care industry is beginning to adopt the principles of sustainable procurement — a "green" approach to purchasing which takes into account the efficient use of nonrenewable resources and the potential for recycling. Research Professor Helen Walker, an international expert visiting ASU from the University of Bath in the United Kingdom, recently focused attention on the trend during a speech sponsored by the W. P. Carey School's Health Sector Supply Chain Research Consortium. A number of the consortium's corporate members, including Premier, Novation and Amerinet, are actively involved in advancing sustainable purchasing.

The marketplace has come a long way since Henry Ford's all-black Model T, mass produced at a price "everyman" could afford. Today's consumers want products designed the way they like, at the right price and with quick availability. For those products, mass customization is the solution, according to a professor of supply chain management at the W. P. Carey School of Business. Manus Rungtusanatham says companies can provide customers with the choices they desire by paying attention to the number and complexities of the variables, then devising their supply chains and assembly lines to meet demand.

How efficiently hospitals keep track of health-care supplies can make the difference not only in cost but also the quality of patient care. There's plenty at stake: the Health Industry Group Purchasing Association reports that "goods and purchased services" is the second-largest expense — after labor costs — in hospital settings. Eugene Schneller and the late Lawrence Smeltzer of the W. P. Carey School of Business spent the last few years studying procurement processes employed in U.S. hospitals. They discovered that a key to streamlining health-care delivery may lie in the industrial supply chain concept of "clockspeed."

Building deep supplier relationships is a key facet of success for Japanese automakers Honda and Toyota. Through a supplier-partnering hierarchy, the two companies work with suppliers to reduce costs, increase efficiencies, and maximize market share. One ASU professor has spent his career studying the auto giants, and reveals what's behind their revolutionary practices. He found that the Japanese take care to cultivate relationships with their suppliers, integrating a "tough love" approach of high standards and demanding requirements. Driving this philosophy is their belief that the suppliers' success is absolutely crucial to their own.

As more jobs move offshore, outsourcing appears to be one of the leading strategies used by companies to gain competitive advantage. But a new research study has determined that while outsourcing may be widespread, most companies have to failed to optimize its value through strategic planning. A research study jointly sponsored by A.T. Kearney Inc. and CAPS: Center for Strategic Supply Research at the W. P. Carey School of Business looked at outsourcing practices and developed guidelines for improvement. Companies should plan on three phases for successful outsourcing: planning and analysis, contracting and relationship development and implementation.