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3 Stages of Hospital Supply Chain Management (SCM) Maturity

Analytics, Business Intelligence, Healthcare, Posts, Supply Chain

hospital supply chain management

Having been involved in the development of a pan-Canadian Electronic Health Record, I have a keen interest in how healthcare benefits from standardized policies and technologies designed to reduce healthcare costs and improve patient outcomes and safety through improved synergies and efficiencies.  My interest also extends to the hospital supply chain.  With inventories representing @ 30% of hospital costs, second only to labor costs, there are huge gains in organizational performance that can be had through better supply chain management.

From a business intelligence perspective, this translates to applying the right metrics and governance models to measure the performance of vendors and buyers, inventories, as well as the warehouse.  But there is a need to apply a balanced approach in which decisions made strictly to reduce costs do not impact other aspects of healthcare, such as healthcare delivery.  This is where a collaborative approach with stakeholders becomes essential.

What I find interesting in this recent study by Booz & Company (see link below) is that it describes three phases of hospital SCM maturity.  The first phase, Foundation Model, is basically a hospital trying to make sure that products are in stock.  Great for stakeholder satisfaction, bad for cost management.  The second, Optimization Model, where most hospitals are striving to go, is based on applying synergies, implementing forecasting technologies, and constantly measuring and analyzing performance.  Great, but what about the patient?  How do we ensure that patient safety and outcomes are not negatively affected by SCM decisions?

Associating supply chain performance with patient outcomes is what is described as the third phase, the Transformation Model, a supply chain strategy that not only focuses on cost control, but is balanced to ensure optimal patient care.  How?  Through collaboration with key stakeholders, such as clinicians — sharing usage and financial metrics — who in turn provide outcome data and assessments of products.

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