General Characteristics of Supply Management in the Healthcare Industry

This section shall look into the general characteristics of supply management in the healthcare industry based on the responses of the survey participants, as compared with the secondary sources earlier reviewed. The first statement that was analyzed to help in determining the general characteristics of supply management in the healthcare was SCM being the second area wherein most of the expenditures of organizations go to. The responses of the survey participants for this particular item produced a mean of 4.

72, with a standard deviation of 0. 53, showing that all one hundred and fifty employees of the healthcare industry recognize that supply management is indeed, the second area wherein most expenditures of healthcare institutions go to. This highly supports the claim made by the United Parcel Service of America (2005) and that of Scalise (2006). According to the United Parcel Service of America (2005), twenty-five to thirty percent of the budget of a hospital and other healthcare institutions go to supply management.

This is because of the need of organizations to purchase technologies and other materials needed in order to ensure the proper management of supplies (Scalise, 2006). Aside from supply management accounting for the second area of the healthcare institutions’ expenditures, the research also looked into the importance of supply management processes in reducing costs within the healthcare industry. This statement, upon the analysis made by the respondents produced a mean of 4. 31, revealing a standard deviation of 1. 05, which apparently agreed with each other with the necessity of supply management to reduce costs in the said industry.

This concurs with the work of United Parcel Service of America (2005) and Scalise (2006) which claim that the importance and evolution of supply chain management within the health care industry started when their member institutions have recognized the need to reduce their operating costs. In the same manner, this also gives proof to the claims of Handfield and Nichols (1999) who said that the earliest practices of supply management is indeed aimed towards the reduction in business costs, which until now is being observed.

Moreover, Scalise (2006) also discussed that this is an area which healthcare organizations must turn to in order to ensure that their business operation costs are significantly reduced. The work of GS1 (2007) mentioned the same thing, listing the ability of supply management practices to control business costs and to significantly reduce them as one of the benefits that organization may receive. The use of supply management practices to ensure the safety of the patients within the healthcare industry was also analyzed. The responses of the survey participants produced a mean of 4. 28, with a standard deviation of 0.

95. In general, therefore, the respondents believe that the use of supply management processes within their industry is essential as it guarantees the safety of the patients. According to Rao (2007) and Lambert (2004), supply management must not only be concerned with reducing operational costs. Rather, it must also focus on giving quality service to customers to ensure that they are properly satisfied. In the context of the healthcare industry, the safety of the patients must be guaranteed to ensure their satisfaction which was then highlighted in the work of GSI (2007) and Sargent (n.

d. ). According to Sargent (n. d. ) supply management practices must also be developed in order to synchronize data to facilitate proper sharing of information so as to eliminate the risks that patients may face under the care of healthcare professionals and the organizations to which they belong to. In the same manner, this is also claimed by Scalise (2006) who said that supply management must be improved to ensure the safety of patients as well as healthcare professionals.

Without a doubt, the members of the healthcare industry have recognized the importance of supply management practices to its member organizations. It is because of this then that they made significant efforts in order to properly integrate them into their business practices. However, this study then analyzed another statement which is seen to be another characteristic of supply management in the healthcare industry. This is concerned with its relative backwardness when compared to the practices of other industries. This particular statement, as earlier discussed was subject to the analysis of the respondents.

From these perceptions, a mean of 4. 15 was produced, with a standard deviation of 0. 79. These then only show that all respondents in general agreed that the supply management practices of the healthcare industry is less superior to that of the other industries. This then also supports the findings of other researchers, most notably, the work of the United Parcel Service of America (2005), which discussed that the health care industry is indeed lagging behind other industries in terms of efficiently managing their supply chain.

This is because of the fact that there are many challenges being encountered by the members of the industry that lead to the backwardness of the manner by which they manage their supplies (Scalise, 2006). However, the findings of this study may disagree with the claim of Dudas (n. d. ) who said that the healthcare industry has significantly improved their supply chain, following the examples of other industries such as that of the retail, auto and grocery. Nonetheless, Dudas (n. d.

) discussed that despite the aforementioned, the practices of the healthcare industry is not that successful, as it still needs to incorporate some improvements in order to guarantee its success. This claim is then also pointed out in the work of Mckone-Sweet, Hamilton and Willis (2005) who said that the healthcare industry must be able to solve the challenges haunting their system in order to raise them on the same pedestal as the other industries that are relatively successful in incorporating supply management practices into their organizations.

The researchers also asked the respondents to validate one of the challenges discussed by previous authors. This is the effects of the constant evolution of technology that leads to the shortage of the products’ life cycle therefore increasing the prices of the items preferred by the physicians. As discussed in the fourth chapter, the responses of the study produced a mean of 3. 63, with a standard deviation of 1. 25, revealing that there is indeed a disparity between the perceptions of the members of the healthcare industry, showing that they are relatively undecided with this particular matter.

This concurs with the findings of the United Parcel Service of America (2005) and that of Mckone-Sweet, Hamilton and Willis (2005) who said that one of the challenges that prevent the proper implementation of supply management processes is brought about by the pricey items that physicians prefer. Basically, this is generally caused by the absence of product standardization (Stewart, 2007) that affects manufacturers, distributors and healthcare providers.

Moreover, the lack of technology needed to standardize products and data then leads to the inability of a special kind of managers to handle the supply chain, thus relying on vendors for the exchange of goods and products, thus affecting once again, the price of items preferred by the physicians (Neil, 2006). Another general characteristic of supply management practices within the health care industry concerns the difficulty in predicting the frequency, duration and primary diagnosis for the visits of the patients and the products that they may require.

This particular item produced a mean of 4. 19, with a standard deviation of 1. 16, showing that there are indeed varied responses to this particular item yet the participants relatively agree to the statement mentioned. Eventually, as previous researches discussed (Scalise, 2006; DeJohn, 2008; McKone-Sweet, Hamilton and Willis, 2005; United Parcel Service of America, 2005; Neil, 2006), this is tied up to the absence of a technological infrastructure that may standardize the data of health care institutions that may be essential for their future businesses.

Connected with the lack of standardized information within the healthcare industry is the lack of a standardized nomenclature or coding for the different products and commodities needed by the members of the healthcare industry. These produced a standard deviation of 1. 05 and a mean of 4. 11, showing that they generally agree with the said statement. The next statement that has been analyzed in the previous chapter is concerned with the industry’s lack of capital in order to build a sophisticated information technology infrastructure that they need so as to support the efforts of the member organizations related to supply management.

As discussed, it produced a mean of 4. 79 and a standard deviation of 0. 63, which revealed that the respondents in general, agree with this particular statement. Once again, their responses concur with the previous researches discussed, especially the one authored by McKone-Sweet, Hamilton and Willis (2005). Nonetheless, this seems to argue with what the United Parcel Service of America (2005) which claimed that the industry is indeed in the process of devoting more money to purchase the needed technology infrastructure to ensure the success of supply management practices.

The next three statements are generally related with each other: (1) the inadequate business education and SCM capabilities of hospital-based buyers, receiving a mean of only 3. 71, with a standard deviation of 1. 03; (2) the need for supply chain managers, with a mean from the responses of the participants of 4. 20, with a standard deviation of 0. 91; and finally, (3) the need to develop the industry’s own practices to ensure the efficiency of their supply management practices, with a mean of 4. 12, and a standard deviation of 0. 97. The results of this study concur with that of previous researchers.

As earlier discussed, the lack of business education and absence of supply chain managers contributes to the inefficiency of the supply management practices in the healthcare industry. Because of this, physician-preferred items have higher prices due to the fact that healthcare professionals deal with vendors who are profit-driven. As a result, taking the nature of the healthcare industry into consideration, there is a need to develop their own practices so as to ensure its success (Scalise, 2006; United Parcel Service of America, 2005; Neil, 2006: Mckone-Sweet, Hamilton and Willis, 2005).

The last general characteristic of supply management practices within the healthcare industry is their tendency to resort to outsourcing as an integral part of their initiative. The responses of the survey participants reveal a mean of 3. 38 and a standard deviation of 1. 20, thus showing that the respondents are relatively undecided with regard to the use of outsourcing in the practice of supply management in the industry. Without a doubt, the perceptions of the respondents generally concur with the findings of the previous researchers, as discussed in the literature review and as compared with each other in this section.

5. 4. Specific Characteristics of Supply Management Practices of the different Healthcare Institutions This section shall then look into the specific characteristics of supply management practices within the healthcare industry, taking into consideration the experiences of its member institutions. The survey respondents reveal that their organizations are in different stages of maturity based on the Supply Chain Maturity Model.

This then concurs with the findings of McCormack and Lockamy (2004) that the members of the American health care industry have different phases of development as they continue to be influenced by successful practices of other industries, not having the capacity to develop their own. Aside from this, the researcher also looked into whether or not the organizations have their own supply chain managers that handle all aspects of process. It produced a mean of 3. 62, with a standard deviation of 1. 21, showing that they are all relatively undecided if their organizations have an efficient manager who handles all activities of the supply chain.

This is because of the fact that healthcare institutions, as discussed by Neil (2006), still tend to interact with vendors although there are some who have recognized the importance of these people, thus employing them to manage the process. The strong connection between the supply chain and information technology infrastructure was also analyzed, revealing a mean of 3. 77 and a standard deviation of 1. 20. Basically, this reflects the fact that the respondents neither agreed nor disagreed with this particular statement.

In the same manner, this also concurs with the previous discussions that reveal that there is still a need for healthcare institutions to incorporate technology into their practice to make their supply management more efficient. This is then related with the next statement concerning the strategic use of technology, which also received a mean of 3. 74, with a standard deviation of 1. 26, showing that the respondents neither agreed nor disagreed with the statement. Apparently, the varied responses to this particular item are brought about by the absence of technological framework in the healthcare industry.

The next statements are then concerned with the internal processes within organizations concerning the application of supply management practices. These are the following: (1) the proper integration of supply chain into the business plan, obtaining a mean of 3. 83 and a standard deviation of 1. 23; (2) the proper communication of strategies and goals to all employees, having a mean of 3. 29 and a standard deviation of 1. 13; (3) the importance of internal integration (mean = 3. 41, standard deviation = 1.

40); and finally, (4) the identification of contingencies with a risk analysis and scenario evaluations which obtained a mean of 4. 09 and a standard deviation of 1. 14. Generally, one can see that the proper incorporation of supply management practices into the affairs of a certain organization is not entirely done. More or less, it is generally also not being observed by all members of the healthcare industry. Thus, one can conclude that the problems being experienced by the healthcare industry is brought about by the inability of organizations to incorporate supply management practices properly into their business plans.