How Can Hospitals Overcome Challenges in Supply Chain Management - Research Paper Example

According to Toba, Tomasini & Farhan (2008), health care institution cannot exist without supply management systems. Regardless of this compulsory requirement, medical institutions are very backdated in terms of having improved supply management systems.
Different from modern-day organizations, healthcare organizations lag behind in updating their supply chain management systems. This can be attributed to the fact that world health bodies frequently update the global stock in medical supplies depending on the emerging trends (Toba, Tomasini & Farhan, 2008). Hospitals rely on these changes in the ordering of medical supplies. However, the quality of the supplies does not create the main problem in supply chain management, but the activities applied in the supply chain management. The difference in the strategies used in supply chain management creates a difference in the cost and efficiency of the process (Toba, Tomasini & Farhan, 2008).
What was the impact if any of the implementation of the proposed solution on this issue?
Disregard the process of supply chain management creates the main challenge in making the process efficient and quality. To overcome these challenges Toba, Tomasini & Farhan (2008) suggest that managers should update their technological position and emerging trends in supply chain management. This will create an organization with a lot of sensitivity in terms of coming up with effective logistics procedures. Additionally, this will open up opportunities for the organization to refer to supply chain management bodies and programs that will aid in transforming the state of supply management systems in organizations. Other significant challenges in supply chain management in healthcare institutions include outdated IT systems, lack of executive involvement, poor infrastructure, poor distribution and inventory management and non-improvement of the procurement process (Toba, Tomasini & Farhan, 2008).
In overcoming challenges in decision-making processes regarding purchasing decisions, Toba, Tomasini & Farhan (2008) advise that institutions should disregard the majority rule. This mode of making decisions should be replaced by the consensus method which minimizes the occurrence of misunderstandings and opposition. This also increases the compliance rate of physicians.
How do efficiencies in supply chain management and effective use of sourcing and technology reduce hospital costs?
What are the alternative solutions to this question?
In 2004, total healthcare spending per person in the United States was $6280. This is a representation of 16% of the US gross domestic product (Toba, Tomasini & Farhan, 2008). In regard to the total expenses of the United States government, this is a big value that can be cut down by simple arithmetic of reducing the expense incurred by medical institutions. Analysts have argued that this inflation in the cost of provision of healthcare is greatly attributed to the mishandling of medical service in institutions. For instance, many analysts have pointed out the fact hospitals disregard the need to upgrade their supply management systems has made funding of medical services expensive (Toba, Tomasini & Farhan, 2008). They further argue that this is inevitable since healthcare institution must be supplied with medical appliances and instruments. Efficiency in supply management systems is important in cutting down the cost of running healthcare.
What was the impact if any of the implementation of the proposed solution on this issue?
Toba, Tomasini & Farhan (2008) point out that 25% to 30% of a hospital’s operating cost are spent on supplies. If the management team of a medical institution is effectively involved in this process the amount spent can be reduced to 15%. The 10 point decrease can provide extra funds to be used in other activities. The application of poor infrastructure in medical organizations makes it difficult to implement quality supply management strategies. Additionally, poor management of inventory creates a lot of waste in organizations. This can be reduced by medical organizations taking responsibility for ensuring their procurement processes are effectively monitored. In the modern corporate environment, many strategies have been developed to aid in cost saving in institution’s procurement processes (Toba, Tomasini & Farhan, 2008). For instance, there is the emergence of Group purchasing organizations that aims to provide medical institutions with cost-cutting opportunities.
Q4. IDN and GDSN technologies
The integrated delivery networks (IDN) and the Global Data Synchronization Network (GDSN) technologies were initiated to connect together the purchasing processes connecting the healthcare industry (Monn, 2004). In GDSN, institutions are provided with information and sources that have been previously successful in other organizations. To make this technology more efficient, many medical institutions across the globe have been incorporated into the global GDSN program (Moon, 2004). This has made it efficient for these organizations to acquire services and supplies of the highest quality.