Introduction
Managing the public hospitals is currently a tricky undertaking. This is due to the fact that the management is under constant scrutiny by the general public. Therefore, all funds from the public coffers must be effectively managed. The public resources on disposal is ever insufficient to meet all the needs for running a facility like a hospital and the meager resources that are available must not be wasted. That is why the concept of supply chain management is important in improving the performance of the organization (Davis, 1993, para. 4).
Supply chain management will eventually help in service delivery to the patients’ satisfaction while drastically cutting down the costs. In broad terms, supply chain management is a concept involving overseeing the finance, materials and also the information while it is moving from the supplier to producer and finally to the consumer. The idea of supply chain management is to minimize the need of holding stock in the organization.
Supply chain management has three flows. Finance flow which entails financial arrangements of the organization with the third parties, that is, the suppliers and the customers. Information flow deals with processing the orders and being updated with the status of delivery.
Finally, product flow entails how products move from supplier to the customers. To better understand supply chain management, it is important to identify its components. These include planning, sourcing and manufacturing, making, delivering and returning (Wailgum, 2007, p. 6).
Background of the study
The Children, Youth and Women’s Health Organization (CYWH) is a health facility which was established in 2004 by the Australian government. The primary objective of this organization is to promote the health of children, youth and the women. The hospital which based in Adelaide provides maternity services and specialist care for children who are suffering from chronic conditions.
CYWH has a mission for delivering quality services for women, children and the young people by working hand in hand with clients and the partners to achieve the main goal of maintaining health of South Australians. The hospitals strategic plan covers a period of five years in which it hopes to establish the foundations for healthy nation.
Analysis of the existing situation
The current health care system existing in South Australia cannot be sustained and required to be overhauled. This is the main reason why the government established CYWH hospital to meet health needs of her people.
The health and patterns of diseases are constantly changing in the southern part of Australia. This is similar to other struggling nations. It is important to note that majority of the diseases can be treated and prevented. However it is not always possible to treat such diseases due to the fact that the people do not have sufficient finances that enables them access quality medical attention.
Diseases such as obesity associated with unhealthy lifestyle are becoming common and a challenge to the authorities. Since it is expensive to manage the diseases, it is important to utilize supply chain management to help the hospital manage these diseases.
The concept of supply chain management applies in this situation such that the drugs required to effectively treat the diseases need to move from the manufacturer, in this case the pharmaceuticals, to the government stores, then to the patients. This is a long chain consisting of many players and the impact of delaying or breaking any part of this chain can be immense.
The prime objective of supply chain management is to drastically cut the cost and maintaining minimal inventories (Simchi-Levi, Kaminsky & Simchi-Levi, 2003, p. 24). In CYWH hospital, there are incidences where accident victims are brought into the hospital but succumb to diseases due to host of factors such as shortage of doctors to attend the patients and shortage of medicine.
Medicine for treating diseases may not be available when required due to logistic problems. For example, if the manufacturer is located out of Australia, the procedure for acquiring the medicine may not be as simple as it should be. Supply chain management will ensure that period between procuring the medicine from the pharmaceuticals and receiving them at the hospital is short. This will reduce the fatalities.
It is common in the hospital that there are huge stocks of medicine not useful to the patients (Msimangira, 2009, p.3). These drugs are either slow moving or are expired. Such stock was bought at a cost. Therefore inventory costs such a patient dying or lose of morale can be high. Unsatisfied patients will have to look other facilities for treatment if there hospital cannot accord them one.
However, to implement such a system is not easy because the health industry is full of uncertainty (Simchi-Levi et al., 2003, p. 30). It is not sure when the patients will show up or when the medical suppliers will be obsolete. Such shortcomings drove the hospitals to buying huge quantity of medicines and causing unnecessary stock piles (Dong & Xu, 2002, p.75).
The activities within the hospital are not organized. For instance, medical records of the patients are stored in a location which is far and retrieving them is not be easy. Therefore, installing the supplies chains management system in the hospital will bring various benefits such as inter-departmental coordination of the activities which makes it easy to run the hospital.
The organization needs to integrate Information Technology (IT) in its operations (Poirier, 1998, p.100). This is because Information Technology is a vital component of supply chain management. According to Byrd and Davidson (2003, pp. 243-255), IT will bring various benefits such as the ability to track and monitor the drug movement along the supply chain.
Tracing the assets of the hospital has been a tricky issue because of the physical locations (IBM, 2009, p. 3). With the introduction of supplies chain management, it will be easy to monitor and track the assets and other critical equipments owned by the hospital.
There are activities which do not add value to the hospital and are not core operations of the hospital and therefore causes unnecessary spending (OECD, 2007, p.3). With the supply chain management system, there will be efficiency in the processes and will eliminate non value adding activities. Use of Pick conveyors and order retrieval systems are some of the ways of eliminating such activities.
Standardization of product.Purchasing of equipments haphazardly has led to unwarranted costs, hence there is need to standardize all equipments and the products so as to reduce careless spending of hard earned funds (Dyckhoff, Lackes & Reese, 2002, p. 1). Standardization of products and equipments ensures that few products are procured in increased volumes from small number of suppliers (Anderson, 2010, para. 1-3). There is heavy discontent amongst the hospital staff as a result of the following findings.
Key findings
- The activities of the hospital are not well coordinated, and as a result, there are high inefficiencies in the processes.
- Purchasing of machines and equipments that are not very important or are of marginal importance has led to the hospital incurring high costs.
- There is need of the hospital to embrace information technology.
- The future or current needs of the customers are not being adequately met. The pharmaceuticals supplying the drugs to the hospital are not being paid on time
- The hospital staff is very discontented as a result of heavy workload. The processes within the organization are not consistent hence the organization is not efficient as a result.
- The patients are not well attended to and this has brought a lot of complaints from them.
Conclusion
Supply chain management can be of great importance in attaining operational efficiencies and effectiveness in the health sector (Deloitte, 2006, para. 4). This is because it will lead to drastic savings of costs and improved care of the patients. The importance of supply chain management is evident from the other sectors such as retail, hospitality, automotive, technology and space industries which have adopted and successfully integrated supply chain management in their systems (Christopher, 1999, p. 65).
Healthcare industry has given a wide berth the supply chain management although it promises to bring radical improvements to this sector (Spens & Bask, 2002, pp.73-88).If supply chain management is entrenched into the operations of the hospital, it can generate economies that permit the organizations to reallocate money and other resources to patients leading to ultimate satisfaction (McGullog, & Wadsley, 1999, p.220).
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