Pacific Healthcare -Death That Might Not Have Happened - Case Study Example

Pacific HealthCare Pacific Healthcare Case Study MAJOR FACTS Pacific healthcare is a health provider that is the largest in Santa Barbra County since it is a large institution with three hospitals inclusive of the pacific memorial hospital, pacific Cabrillo hospital, and Pacific Isla Vista. The healthcare provider also has two nursing homes and clinics that provide outpatient care to patients. The supply manager for the healthcare is Barney Rubble and he is in charge of ensuring all supplies in Pacific health care are procured. However, in the Radiology department, Mr. Thruston Howell is in charge of selecting the x ray film to be used and in the past fifteen years, he only authorized the use of Kodak X ray film and refused that any other film may be used in the radiology department. MAJOR PROBLEM The major problem in the case study is that recently Mr. Howell died and Barney Rubble was left with an opportunity to select who will be supplying the film in the radiology department. After Mr. Rubble carried out his investigation, he realized that the price of the Kodak film that was being used was above all the possible competition that exists. There existed an agreement that Kodak should be furnishing the x ray equipment and offer maintenance and service to the healthcare at a discount since they use Kodak as their single supplier for the x ray film. Kodak refused to continue providing the services if it is not the sole supplier of the x ray film. There are different X ray films depending on their type, size, and use. The Pacific healthcare uses the X ray film to carry out mammograms while the Film is used to carry out CAT scans. Every day the healthcare uses almost 1500 sheets of film. There are other companies such as DuPont, Agfa, Fuji, and 3 M that manufacture the X ray film and some have quality consistent to that of Kodak and all of them meet the minimum requirements. The Pacific healthcare has a strategy to obtain high quality products at the lowest cost and they have an objective of finding a single-source supplier for every one-year contract. POSSIBLE SOLUTIONS The possible solutions to the problem that Pacific healthcare is facing include sticking with Kodak as their single source supplier and continue enjoying the discounted services and maintenance of the x ray equipment. Although the prices are high, the discounted maintenance and services that Kodak offers are worth the price. In addition, Kodak is of high quality and therefore the Pacific’s objective of obtaining products of high quality from a single source will be met. It will be an advantage to maintain the Kodak suppliers since the healthcare is already used to the Kodak products. Therefore, there will be no change on how to use or how to obtain them. Another advantage is that there is already an existing contract with the Kodak Company and thus there will be no necessary changes taking place in terms of contract. The main disadvantage of using this a solution to the problem is that the healthcare will continue paying for the high prices of Kodak films while there exists an option that can be cheaper. Therefore, the objective of purchasing products that are cheap and of high quality will not be met by using this solution. The second solution to the problem Pacific healthcare is facing is giving the supply contract to Agfa manufacturers who are cheaper since the cost of one sheet of an x-ray film is 1.58 dollars while that of Kodak is 1.80 dollars. It is believed that Agfa and Kodak are of the same quality yet the prices vary so much. The advantage of getting Agfa to be the single suppliers of the x-ray film are that the same quality of x-ray film will be enjoyed and at a cheaper price thus saving the healthcare a lot of money. Healthcares should choose suppliers who give the best products at low prices (Lee, 2013). With Agfa manufacturers, it is possible to have a single supplier of x-ray film that is of high quality and low price thus meeting the healthcare’s objectives. The disadvantage of having Agfa as the suppliers of the x-ray film is a new contract will have to be made since they have never supplied the institution with their products. It is possible that their films have some slight differences compared to Kodak. In addition, it is possible that the manufacturers do not offer the discounted services and maintenance so the healthcare will have to pay for the maintenance and services in full. The third solution to this problem would be using DuPont manufacturers as the single source supplier for the x-ray film. The DuPont is cheaper that the Agfa and the Kodak manufacturers since their price per sheet are 1.50 dollars. It is believed that Agfa, DuPont, and Kodak are of the same quality only that their prices vary. DuPont being a single supplier for the healthcare will ensure that the supplies are of high quality and low prices. However, the disadvantage of using this as the solution to the problem is that a new contract must be made since the manufacturers have never supplied the healthcare with x-ray films. There is also a possibility of a difference in how the film is used compared to the Kodak film that the healthcare is used to using. The fourth solution will be using Fuji manufacturers as the single suppliers. The advantage with contracting Fuji manufacturers to supply the x-ray films is that they are very cheap since every sheet costs 1.40 dollars. The disadvantage however, is that it is of low quality despite meeting the minimum specs requirements and thus the healthcare may not get the desired results if it chooses to use Fuji. Finally, the 3M manufacturer could be used as the single source supplier. It is the cheapest X -ray film manufacturer and thus it will save the company a lot of money. However, it is not the best since the x-ray films are of low quality even though it meets the minimum specs requirements. CHOICE AND RATIONALE My choice is DuPont manufacturers as the solution since it is cheaper and the products are of high quality. The price is lower compared to Kodak and Agfa who produce x-ray films that are of the same quality. By choosing DuPont, the healthcare will have met its objective of having a single supplier of the x-ray film that is of high quality and low prices. In the end, the results will be equivalent to that of using Kodak and money will be saved. I would not choose Fuji and 3M since the ray films are of low quality although they are cheap. IMPLEMENTATION To implement the solution, the manufacturers will have to be contacted so that their ability to supply the healthcare is known. A contract will be signed to ensure that all the terms and conditions are met during delivery and that there are no regrets later. After a contract is signed, the manufacturer will be expected to deliver the x-ray films as ordered. CASE STUDY QUESTIONS Barney should consider some alternative when addressing the problem. The alternatives include other manufacturers that can supply the healthcare with x-ray films at a lower price and they are of good quality. Pacific’s supply policies should not allow any medical staff to control sourcing decisions since it would lead to conflicting decisions. There would be many personnel wanting to be in control and in the end poor decisions may be made. The advantage of staying with Kodak includes the fact that there will be minimal changes done based on contract. The healthcare will continue enjoying the discounted services and maintenance of the equipment. The disadvantages are such as the healthcare will continue paying high prices that can be avoided. By changing the suppliers, the healthcare will have a chance of reducing the expenses. Mr. Rubble should have taken a research on the suppliers of x-ray films before Mr. Howell’s death to know if there were any cheaper films of high quality available apart from Kodak. He should have Mr. Howell to provide other possible alternatives and together they ought to have chosen on the best suppliers. References Lee, T. (2013). The Strategy That Will Fix Health Care. Harvard Business Review, 91(10), 50 70. Read More