Supply Chain Management in Hospital: a Case Essay

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Supply Chain Management in Hospital: A Case Study
Samuel Toba • Mary Tomasini • Y. Helio Yang
San Diego State University, San Diego, CA
It is a common misunderstanding that hospital purchasing is just a functional part of operations rather than a strategic means to achieve financial cost savings. The supply chain process is the essential link for all programs and services offered by a hospital, and hence any improvement in managing the supply chain can positively impact bottom line profitability of any hospital’s operations. This paper provides an overview of the current issues in supply chain management that today’s hospitals face as well as a look at the measures that a case health organization has taken in managing this aspect of
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However, Neumann (2003) indicates that the exact opposite may be true. He points out the scientific background that physician’s hold and the fact that the scientific method requires one to be open to new ideas. He points to the fact that data which supports the decision to use a particular supply can go a long way in convincing a physician to Neumann (2004) use a particular supply. recommends value-analysis committees or product evaluation and review committees to overcome the problem. KP has successfully implemented similar approaches to encourage the buy-in from physicians. For example, the decision to purchase and universally adopt cost-effective items for use within all hospitals is by team consensus. Their level of compliance (over 90%) is achieved in part through their use of a process they call “Sourcing and Standards teams”. KP Sourcing and Standards teams, consisting of clinical experts and sourcing personnel, evaluate and determine the best and most cost-effective products to implement. The work of these groups usually takes place well before a team is considering a new purchase. In fact, the process of creating the

California Journal of Operations Management, Volume 6, Number 1, February 2008


Toba, Tomasini and Yang Supply Chain Management in Hospital: A Case Study

decision matrix used in the selection process can be more labor intensive than the actual product decision. Once the criteria have been