Category Archives: Methodology

The Healthcare Supply Chain

I recently had a great discussion with some healthcare research and provider groups in the US, relative to the development of Supply Chain Strategy – segmentation, setting strategy, benchmarking and so forth (see our online CBT on Strategy and benchmarking at http://supply-chain.org/resources/scormark/tutorial). The conversation followed the normal course for discussion – the high cost of healthcare in the US, what is appropriate segmentation, where are benchmarks for healthcare in the various areas?

I mentioned a great report I had seen sometime back from McKinsey which provided me with a clear view of segmentation, and comparative benchmarking with OECD countries in healthcare (see here: http://preview.tinyurl.com/kuk9fes – in general there are a lot of great reports on healthcare costs from McKinsey if you search via Google). What was interesting in the conversation, from the strategy perspective, was when I discussed the upcoming implementation of the US Affordable Care Act (ACA), and 100% coverage of insurance in the US. While cost is a significant driver in healthcare, if suddenly everyone is insured (relatively speaking), is cost the most significant driver? The discussion ensued, and I pointed out that in Europe and Canada, cost is not always the primary issue in people’s minds. It is response time, or system flexibility.

My personal feeling is that in all the clinics and diagnostic centers, everything but emergency care (and even there…) in the US, suddenly there’s going to be an influx in demand. Imagine that you are in a business where a major competitor goes out of business, and suddenly you have to absorb 10-20% more demand or more. In some cases, lead time is not the issue for materials and services. It’s sheer capacity of manufacturing facilities, freight channels, warehouses… This is what we learn about looking at SCOR agility and flexibility metrics. I felt that, in the context of healthcare, ACA was going to create a situation as though a competitor went out of business in healthcare (e.g. self-paid healthcare), and suddenly all those people were going to move to insured healthcare and place a dramatically higher demand into the system.

Cost is a strategic driver, but as we learn from correctly setting strategy, is it the most important driver after ACA, or will it be responsiveness? My feeling is that people are going to be happy to have affordable healthcare in general, but they will start to find that response times for slots in their healthcare provider system for checkups, diagnostics, and treatment in specific cases where there is poor planning, will be quite surprising. Research from the UK here: http://www.ncbi.nlm.nih.gov/pubmed/12543833/. Balancing cost versus responsiveness in ongoing healthcare strategy, which will shift as the market changes, will be crucial to views of success. Healthcare is fascinating and very apropos to view through the lens of supply chain management.

Reactive/Proactive

As I speak to supply chain audiences, I focus on key messages that are important, but sometimes forget where they came from. One key message I focus on is that the best supply chain organizations are not “managing by project” – they consider that a type of management failure. Continue reading

Recipe for a Merger

I recently finished reading Jared Diamond’s book Guns, Germs, and Steel: The Fates of Human Societies, a quick walk through the history of the last 13,000 years of human society, and I was intrigued by the parallels between his section on the development of written language, and how Supply Chain seems to be progressing with frameworks. The section of his book that deals with language stresses the importance of having written language to administer large human organizations –empires, kingdoms, nations, etc.

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The Supply Chain Management Process

The late Michael Hammer of “Re-engineering the Corporation” fame put it succinctly once in a forum I attended in Philadelphia: “An imperfect process is better than no process, and a good process is best of all.” I’ve looked at many Supply Chain maturity models for companies, and some look at vendor dimension – degree of collaboration – while another may look at resource – degree of rationalization. All are based however on having a supply chain management system which evolves to progressively improve overall supply chain performance. Continue reading

Healthcare SCM

In my role with SCC, I recently had a great discussion with some healthcare research and provider groups in the US, relative to the development of Supply Chain Strategy – segmentation, setting strategy, benchmarking and so forth (see an excellent online CBT on Strategy and benchmarking at http://supply-chain.org/resources/scormark/tutorial). The conversation followed the normal course for discussion – the high cost of healthcare in the US, what is appropriate segmentation, where are benchmarks for healthcare in the various areas? Continue reading

Metrics Always Win

Over the past two weeks I have had the pleasure of meeting with senior executives from a variety of companies in training situations where we could talk freely and discover opportunities within their businesses for improving their supply chains. SCC trainings—particularly in-house private trainings – take a practical, hands-on focus to supply chain improvement. Managers frequently leave the trainings with specific ideas and improvement programs laid out and ready to go. Continue reading

Growing Up

Many years ago (September, 1994) I read an Scientific American article “Software’s Chronic Crisis” with interest – my job at the time being precisely “Software Development”. The article introduced me to “CMM” (Capability Maturity Model) in software development, as an aid to improving software to avoid the inevitable ‘crisis’. “Maturity” here didn’t connote age (there are certainly very old IT organizations I’ve worked in I would hardly call ‘mature’) but rather ‘well developed’. Continue reading

The Great Convergence

I spoke at a conference last November in San Diego, about different supply chain management techniques and how the “compete” with each other. What impressed me at the conference was that after years of discussion around Six-Sigma, SCOR, LEAN and other approaches, people are now completely accepting true ‘convergence’ and ‘condensation’ around supply chain process work, and understanding the proper place of different methodologies within overall change management. Continue reading