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In my July post, I introduced the ‘Hierarchy of Supply Chain Metrics’, which is a framework of supply chain metrics conceived by Gartner, the world’s leading information research and advisory company.  The model provides 3 tiers of integrated metrics to assess, diagnose, and correct supply chain performance, and is a great example of what constititutes a supply chain scorecard.

 

 

To address the needs of healthcare, Gartner has published a revised version of the model with a focus on the supply chains of healthcare Integrated Delivery Networks (IDN).

 

If you compare the two hierarchies, you will notice the elements that pertain to IDNs.  Firstly, the notion of customer satisfaction (i.e. Perfect Order) is replaced with Supply Availablity.  According to the model, IDN supply chain performance is driven by sound demand forecasting, coupled with a balance between having the right supply on hand and controlling supply chain costs.   The ‘Cash to Cash Cycle Time’, which is the time it takes from purchasing a product to the time cash flows back from customers, remains intact.  However, more changes can be seen at the ground level with root cause analysis metrics focusing heavily on areas such as supplier performance and contract compliance.

 

I invite our IDN friends to provide commentary on how this version of the model applies to their supply chain.


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1 Comment

  1. Gerald Vonberger says:

    This is a very interesting analysis of medical supply chains. I think most people purchase medical supplies based on the demand for the supplies. While this is a good plan to have customer satisfaction, you definitely need to consider the cash flow issues. I wonder if there’s a better way to calculate the cash-to-cash cycle time. That would help a lot of healthcare facilities to determine their medical supply needs. http://www.classichealth.com/wecs.php?store=&content=services.html

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