The case for healthcare supply chain management: insights from problem-solving approaches

The US healthcare industry is a large enterprise accounting for over 14.1% of the national economic output in 2001. It has been under pressure for cost containment and providing quality healthcare services to consumers. Its record of investing heavily in the development of sophisticated drugs and diagnostic systems does not match that of technologies to manage its day-to-day operations. In order to achieve improved performance, the healthcare supply chain must be efficient and integrated. The driver for this integration is logistics and supply chain management. This paper describes trends, issues and some solutions for logistics management for the healthcare supply chain with concepts drawn from industrial engineering, and operations research disciplines applied to specific domains. A healthcare supply chain template utilising e-commerce strategy is presented. Use of simulation, optimisation and information-sharing techniques are demonstrated to optimise purchasing and inventory policies.