Strategic Management of the Health Care Supply Chain

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Strategic Management of the Health Care Supply Chain provides students, faculty, managers, and researchers with a clear understanding of the health care supply chain and its role in health care strategy. It builds on fundamental concepts including sourcing of materials, forecasting demand, selecting and employing distribution models, and assessing risks, showing how they aid in the pursuit of supply management excellence in the health sector.

Strategic Management of the Health Care Supply Chain Review

As Lawton Robert Burns explains so well in the Foreword, "This book provides the first systematic treatment of [the] `thorny issue' of managing the supplies that medical professionals such as physicians and nurses order and use in treating patients], covering both external and internal management of the hospital's supply chain. Appropriate, the book focuses on the managerial processes that need to be managed: sourcing, purchasing, distribution, value analysis, and standardization. The book not only provides a rich conceptual framework for managing these processes, but also supplements the authors' conceptual work with rich studies of hospitals and health systems that have implemented process improvements in these areas."

Eugene Schneller and Larry Smeltzer carefully organize their material within eight chapters which begin with "Framing the Repositioning Management of the Health Care Supply Chain" and conclude with "Building Supply Chain Leadership and Resources for the Future." I mention these "book-end" chapter titles because they correctly indicate that (a) Schneller and Smeltzer see all manner of significant insufficiencies in the strategic management of most health care supply chains but that (b) what they recommend in this volume should not be viewed as a "silver bullet"; on the contrary, any supply chain must be constantly and rigorously evaluated and, when necessary, re-framed and perhaps even re-positioned. Although supply chains such as those in health care inevitably have a "weak link" (if not several), that will not necessarily result in a total breakdown system wide. However, if links are viewed as business relationships, it is highly desirable to have strong ones...especially during difficult times as when sudden and substantial cost increases occur.

In this context, I am reminded of a valuable insight that Patrick Lencioni provides in one of his business narratives, Silos, Politics and Turf Wars. Here's the situation. The main character, Jude Cousins, is a talented, energetic, and ambitious young marketing executive who, with his wife Teresa's support and encouragement, decides to leave his secure job after the company is purchased by a competitor. He establishes an independent consulting practice and almost immediately obtains three clients: The Madison Hotel (San Francisco's oldest, largest, and most prestigious independent hotel), JMJ Fitness Machines (a manufacturer of high-end consumer and institutional exercise equipment), and Children's Hospital of Sacramento. Over time, Cousins struggles without much success to help his clients to improve communication, cooperation, and (especially) collaboration between and among their senior-level executives. Because this is a business narrative, complete with a plot and cast of characters, its storyline builds to a climax that, in this instance, is the valuable insight to which I referred earlier. Cousins has an epiphany: He realizes that the ER at Children's Hospital offers an almost ideal model for efficient, effective, and productive teamwork. Everyone involved must concentrate entirely on the given medical crisis that may have life-or-death implications. There is no time for "silos, politics and turf wars."

It will be interesting to observe the extent to which supply chains in health care change in months and years to come. What will the next paradigm consist of? Schneller and Smeltzer make no predictions, although they correctly suggest that communication, cooperation, and (especially) collaboration will become progressively more important if both the quality and costs of health care are to be managed properly.

Those who share my high regard for this volume are urged to check out two books which Burns and his Wharton colleagues have written: The Business of Healthcare Innovation and The Health Care Value Chain: Producers, Purchasers, and Providers. Also Michael E. Porter and Elizabeth Olmsted Teisberg's Redefining Health Care: Creating Value-Based Competition on Results, Regina E. Herzlinger's Consumer-Driven Health Care: Implications for Providers, Payers, and Policy-Makers, Shoshanah Cohen and Joseph Roussel`s Strategic Supply Chain Management: The 5 Disciplines for Top Performance, and Supply Chain Excellence: A Handbook for Dramatic Improvement Using the SCOR [Supply Chain Operations Reference] Model co-authored by Peter Bolstorff and Robert Rosenbaum.

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