Healthcare SCM

8/8/2019 Healthcare SCM

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The State o Healthcare LogisticsCost and Quality Improvement Opportunities

Center or Innovation in Healthcare Logistics

Heather Nachtmann, Ph.D. and Edward A. Pohl, Ph.D


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Contents

4 Executive Summary

6 The Healthcare Supply Chain

14 Data Standardization

20 Ecient Healthcare Consumer Response Update

24 Cost and Quality

29 Conclusions: The Path Ahead

30 Participants and Methodology

31 Contacts and Acknowledgements


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Foreword

What we knowWe know healthcare costs are rising at an alarming

rate. A signicant cost driver is the universal

complexity o the healthcare supply chain. It is

believed that healthcare logistics is an area in which

costs can be reduced and eciencies gained in order

to provide healthcare delivery at a reasonable cost.

In 1996, a group o healthcare manuacturers,

suppliers, and providers met to analyze opportunities

or reducing costs in the healthcare supply chain. The

resulting Ecient Healthcare Consumer Response

(EHCR) report continues to be the benchmark or

assessing the role that supply chain unctions play in

healthcare expenditures. The EHCR report identies

signicant opportunities and ormulates strategies

or reducing healthcare supply chain costs. Despite

this eort, a lack o clear and measurable cost and

quality improvements is evident within the industry.

High quality is expected by all parties that interact

with the healthcare system, yet there remain

signicant opportunities to improve supply chain

quality as well as patient saety.

What we dont knowWe do not know where the undamental inecien-

cies and associated costs subsist within this complex

supply chain. We also do not know where the

opportunities or the greatest increases in quality

exist within the healthcare supply chain. This lack o

knowledge contributes to healthcare supply chain

ineciency. The undamental question remains,Can we meet the demand or short-term cost

containment yet create a sustainable and ecient

healthcare logistics system that enables signicant

and measurable improvements in the quality o

healthcare delivery?

What were doing about itIn November 2008, the Center or Innovation in

Healthcare Logistics at the University o Arkansas in

conjunction with the Association or Healthcare

Resource & Materials Management (AHRMM)

administered an industry wide survey to assess the

current state o the healthcare supply chain rom a

cost and quality perspective. The survey was

motivated by the need or current inormation on

the healthcare supply chain industry and interest

in the industrys progress since the EHCR report.

Survey development was guided by the EHCR and

other industry surveys along with expert interviews

with twelve healthcare supply chain proessionals.

The goal o the survey is to describe the current state

o the healthcare supply chain and identiy existing

ineciencies while simultaneously investigating

opportunities or quality improvements within

healthcare logistics.

The path aheadThe purpose o this report is to make the healthcare

supply chain community aware o the current

state o the healthcare supply chain. We hope this

knowledge will acilitate working with healthcare

supply chain practitioners to develop and implement

logistic cost eciency and quality improvement tools.

As part o this ongoing eort, ocus groups will be

conducted to develop a set o quality indicators or

the healthcare logistics as well as opportunities

or continuous process improvement in the designand operation o the healthcare supply chain.


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About this surveyIn this November 2008 survey, involving 1381

healthcare supply chain proessionals rom all major

sectors o the supply chain, respondents were asked

to provide their perceptions o cost and quality

eciencies and improvement opportunities within

their organization.

The major topics covered are:

TheHealthcareSupplyChain

DataStandardization

EfcientHealthcareConsumerResponseUpdate

CostandQuality

The results, coupled with an industry response,

provide current inormation on the state o the

healthcare supply chain and identiy opportunities

or improvement across its sectors. We believe this

inormation will acilitate uture successes within

the healthcare logistics industry.

We would like to thank all o the healthcare supply

chain proessionals who generously contributed their

time to take part in this survey. This report would not

exist without their participation. We are grateul or

the generous support o the Center or Innovation

in Healthcare Logistics and the Association or

Healthcare Resource & Materials Management.

Heather Nachtmann, Ph.D.Associate Proessor


Department o Industrial Engineering

University o Arkansas

Edward A. Pohl, Ph.D.Associate Proessor


Department o Industrial EngineeringUniversity o Arkansas


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Executive Summary

Immature

The healthcare supply chain is in

its inancy stages according to the

survey participants. Almost one

out o two respondents indicate

that their organizations supply

chain is at a low level o

maturity with very ew respon-

dents indicating their organization

has a mature supply chain

in place. Healthcare supply chain

managers should ocus on

undamental improvements in

order to increase the maturity

o their supply chain. This, in

turn, will acilitate next step

improvements in supply

chain perormance.

Collaborative

Our ndings show high collabo-

ration among healthcare supply

chain partners. The vast majority

o healthcare provider respondents

indicate active collaboration with

their supply chain partners in

order to improve their own supply

chain perormance. We suggest

that healthcare providers could

benet rom more collaboration

with other providers through joint

benchmarking and lessons-learned

studies. Supply chain participants

are also collaborating with stake-

holders outside o the healthcare

supply chain.

Strategic

The survey respondents indicate

active participation in strategic

supply chain improvement

initiatives. Similar to other

industries, healthcare supply

chain proessionals are attempting

to better collect and manage

their data, improve visibility,

reduce inventory, and streamline

processes. There is strong

evidence o implementing the

strategies recommended by 1996

Ecient Healthcare Consumer

Response across all sectors o the

healthcare supply chain.

4

The Healthcare Supply Chain is. . .

The State of Healthcare Logistics: Cost and Quality Improvement Opportunities

report provides an industry-wide look into the current state o the healthcare supply chain.

We hope this insight will serve as a catalyst to urther collaboration among healthcare

supply chain practitioners and stakeholders or the purpose o logistic cost efciency

and quality improvement.


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Expensive

The average healthcare provider

organization in our survey is

spending more than $100 million

each year on supply chain

unctions, nearly one-third o

their annual operating budget.

Manuacturers, GPOs, and

distributors are spending even

greater percentages o their

annual budgets to operate their

supply chains. Much o this expense

is being driven by inventory and

order management unctions.

Inormation poor

The healthcare supply chain is

starved or accurate and accessible

data. Access to the desired quantity

and quality o data is indicated

as the primary barriers to supply

chain excellence, collaboration,

and data standards adoption.

There is a clear movement

towards data standards adoption

across the healthcare supply chain.

However, the readiness o health-

care organizations to implement

data standard systems in the near

uture is not obvious.

Talent rich

As refected in the experience

levels and job titles o our

survey respondents, the health-

care supply chain is rich in work-

orce talent. The majority o our

survey respondents have more

than twenty years o experience

within the healthcare supply

chain industry. This rich talent

base is well positioned to move

the healthcare supply chain to the

next level.

5

Supply chain in healthcare is talent rich, but it remains talent disconnected. We have to

learn how to communicate best practice and ailed eorts enough so that the impact o

supply chain on organizations continues to improve to a higher national standard. To

accomplish this, healthcare supply chain proessionals all must learn to a higher and

broader standard o knowledge that extends ar beyond what we knew fve years ago.

Howard G. Mann, Senior Director, Corporate Materials Management, Saint Lukes Health System


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The Healthcare Supply Chain

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The Healthcare Supply Chain

Nearly hal o the healthcaresupply chain proessionals

taking part in the survey

indicate that their organizations

supply chain is immature

(described as Ad Hoc or Dened).

Specically, more than hal o

the respondents working or

manuacturers or healthcare

providers indicate working in

an immature supply chain. In

act, ewer than one in twentyrespondents indicate that their

organization has a mature or

extended supply chain with

the majority o these being GPOs.

8

Source: 2004, Lockamy, et al., Supply Chain Management, Vol. 9, No. 2

Sample size = 1120; Source: 2009, Nachtmann and Poh


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The lack o data standardizationwas the most common challenge

to achieving supply chain

excellence aced by the survey

respondents regardless o their

organization. The most requent

challenge aced by healthcare

providers is the current separation

between procurement, clinicians,

and payers. The high variation

in their customer and client

preerences is given as a dominantchallenge or respondents

employed by GPOs, distributors,

and providers. Manuacturer,

GPO, and distributor respondents

indicate that having no visibility

into the end-to-end perormance

o their business processes is one

o their top three challenges.

42%o respondents see the lack o datastandards as a challenge to achievingsupply chain excellence

9

Sample size = 1120; Source: 2009, Nachtmann and Pohl


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The Healthcare Supply Chain, continued

The collaboration among healthcare supply chain participants is evident in our ndings.

While consumer behavior is a key driver to supply chain perormance, healthcare providers

are indicated as the second lowest collaboration partner or each o the other supply

chain sectors. The providers themselves indicate that they heavily collaborate with GPOs,

distributors, and manuacturers to improve their own supply chain perormance but indicate

a low collaboration with other healthcare providers. There is also evidence that healthcare

organizations are working with outside partners, such as proessional associations and

academic institutions, to improve their perormance.

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Nearly three out o our (72 percent) survey participants indicate that the lack o data standards

is a barrier or their organization to reach an acceptable level o collaboration among healthcare

supply chain organizations. More than hal o the respondents believe that a lack o trust exists as

a barrier to collaboration. Unlike their supply chain partners, a air number o healthcare providers

(31 percent) indicate that an acceptable level o collaboration exists among healthcare supply chain

organizations. Interestingly, the quality o available inormation is indicated as the highest or

second highest barrier or manuacturers, GPOs, and distributors but the lowest barrier or health-care providers. Healthcare providers (40 percent) also see a loss o competitive edge as a barrier

to reaching an acceptable level o collaboration, while ewer manuacturers see this as a barrier.

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The Healthcare Supply Chain, continued

Our ndings indicate that grouppurchasing organizations are

leading the way in successully

attempting supply chain

improvement initiatives.

More so than the other three

organization types, healthcare

providers (77 percent) are

working to standardize their

internal purchasing procedures.

The majority o healthcare

provider respondents have alsoworked to centralize/consolidate

supply chain data, improve their

service levels and ll rates, and

improve their invoice accuracy.

Our ndings indicate that all

our organization types have

successully established strategic

partnerships and alliances to

improve their supply chain

perormance.

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The healthcare supply chain is not what it used to be. The landscape o supplychain management has matured over theyears while the processes that make up

traditional materials management have not kept up. Purchasing, receiving, inventory

management, distribution, and other hospital based unctions are being replaced

out o necessity with sourcing, acquisition, logistics, collaborative contracting, cost

management, relationship building with key partners such as physicians, suppliers

and the community. On the one hand the change and expansion o expectations

out o the supply chain leader is energizing and exhilarating, trying to accomplish

the makeover with the same old processes is difcult.

Howard G. Mann, Senior Director, Corporate Materials Management, Saint Lukes

Health System

While routine collaboration between buyers and sellers in healthcare is not nearly

as common as in other industries, todays healthcare supply chain proessionals have

recently shown an expanded acceptance o the philosophy that we all share the

same supply chain and, thus, we all share its challenges and opportunities too. This

new holistic approach is gaining traction, which is a real good sign that collaborative

eorts in the uture could be more requent and bear more ruit.

Dennis P. Orthman, CMRP, Project Director, Strategic Marketplace Initiative (SMI)

Health care GPOs play an essential role in driving collaboration among suppliers,

distributors and providers but there is room or improvement. We need greater

collaboration across health care to overcome some o the obstacles we still aceater more than a decade o work ocused on improving the health care supply

chain. Its obvious that no single player has the ability to move this ball orward

alone, but GPOs are in a unique position to rally the dierent players and lead a

team eort.

Scott Downing, Executive Vice President, Supply Chain Services, VHA Inc.

Healthcare leaders have acknowledged that the status quo is unsustainable and

that collaboration is needed to improve the systems operating eectiveness. It is

encouraging to see manuacturers, healthcare providers, GPOs and collaborative

groups such as AHRMM, SMI, MDISCC, and HSCSC measuring error rates, defning

ideal end states and implementing changes. Every healthcare provider that BD hasspoken to is interested in improving the supply chain and achieving Perect Order.

Dennis Black, Director, e-Business, BD

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Industry Reactions

The healthcare supply chain is

vast, complex, essential, and

purportedly eective but

inecient. Thousands o

dedicated individuals interact

every day to get the right

medical products to the right

customer at the right time.

Partners within this supply

chain such as healthcaremanuacturers, distributors,

GPOs, and providers strive or

excellence inside and outside

o their organizations amidst

daily challenges including

volatile customer demand, low

visibility, diverse processes, and

a complex payment structure.

Their actions impact the lives

o millions o stakeholders

including patients, clinicians,and payers. To supplement

our description o key

characteristics and challenges

o this industry which impacts

us all, we provide reactions

rom industry experts whose

proessional lives are dedicated

to the betterment o health-

care logistics.


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Data Standardization

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Greater than one out o three healthcare proessionals that participated in the survey are

moving towards the adoption o a data standards system with an overwhelming majority

o those (88 percent) moving towards adoption o the GS1 system. The majority o those

that indicate that they are moving towards a data standards system other than GS1 do

not know which system their organization is moving towards. Almost hal o the

respondents surveyed (48 percent) indicate that they do not know i their organization

is moving towards the adoption o data standards.

35%o respondents are moving towardsadoption o a data standards system

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Data Standardization, continued

One out o three survey participants that are planned adopters o data standards believe that their organization

is ready or very ready to adopt a data standards system. When asked about their timeline or adoption, a small

percentage o these respondents (10 percent) have already adopted a location identifcation standard such as

the Global Location Number in the GS1 system, while even ewer have already adopted a product location

identifcation standard such as GS1s Global Trade Item Number.

However, more than one out o our planned adopters expects to adopt both o these standards within one year.

These results indicate some progress towards the 2010 GLN Sunrise goal to use standardized location identifcation

by December 2010 and the 2012 GTIN Sunrise goal to use standardized product identifcation by December 2012.

There is also an indication o unreadiness among planned adopters where many survey participants (43 percent)indicate that their organizations are only marginally ready or not ready at all to adopt data standards.

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Data Standardization, continued

All in all, the healthcare proessionals participating in the survey listed 814 distinct items as the

most signicant barrier that inhibits the adoption o data standards in their organization. A lack

o resources is most requently cited as the most signicant barrier or survey participants rom

manuacturer and provider organizations who are the primary implementers o data standard

systems. GPOs and distributors see their supply chain partners as the most signicant barrier to

adoption o data standards within their own organizations. The second most requently citedbarrier to adoption is inormation technology.

18

Source: 2009, Nachtmann and Pohl


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19

It is encouraging to see the large percentage o survey participants that respondedthat their organizations have already adopted GS1 standards (GLN and GTIN) or

will be adopting these standards within the next 1 to 3 years. Adoption o these

standards will be a huge step in standardizing healthcare supply chain data. The

survey results validate the movement that we have seen, over the past year, in the

interest in implementing GS1 standards in U.S. healthcare. This progress represents

the hard work o the industry members that have been leading this initiative and

their commitment to improving patient saety and supply chain efciency.

Dennis W. Harrison, Sr. VP GS1 US and President of GS1 Healthcare US

Our experience validates that Perect Data and the adoption o data standards

are necessary or many supply chain initiatives. We wont achieve Perect Orderwithout Perect Data. We are collaborating with trading partners to adopt data

standards globally. GS1 GLNs and GTINs are the data standards most oten

requested by our customers around the world. Current pilots and implementation

eorts using GS1 standards are quite promising.


Supply chain proessionals have been decrying the lack o standards among

supply chain data or more than 25 years. The GS1 standards are becoming

available but alignment across the healthcare providers materials management

inormation system (MMIS), the manuacturer and distributor systems have not

eectively been adopted yetOnce supply chain data has been standardized,integrating that data across clinical databases becomes the next logical step to

support cost reduction through utilization management.


Health System

The adoption o the GS1 data standards could revolutionize the entire healthcare

supply chain. However, adoption must be widespread and rapid in order or the

benefts to be elt on a national scale. Industry awareness o data standards is

growing, but awareness is not the same as adoption. Providers must continue to

lead the marketplace down the data standards adoption pathway despite the current

constraints on resources. Only when the majority o supply chain participants haveadopted standards will the real benefts patient saety, operational, fnancial,

etc. - be evident and obvious.


Industry Reactions

Every healthcare logistics

expert we spoke with during

the development o this survey

mentioned data standardiza-

tion within the healthcare

industry as an important issue,

both as a challenge (the current

lack thereo) and as a solu-

tion (uture adoption). A data

standard is a universally agreedupon and accepted representa-

tion, ormat, and denition or

common data. Data standards

increase compatibility, reduce

redundancy, and improve

exchange and collection

eciency. Data standardiza-

tion is the process by which all

data elements related to a data

standard conorm to achieve

common presentation and ex-change. For those engaged,

this process will be as valuable

as the end result o achieving

data standardization as

processes are dened, tools

are developed, and improve-

ment opportunities are

identied. There is clear

evidence that the healthcare

industry is initiating the data

standardization process.


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Efcient HealthcareConsumer Response Update

20


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Two out o ve healthcareproessionals who participated

in the survey indicate that their

organizations have attempted

at least hal o the initiatives

suggested by the 1996 Ecient

Healthcare Consumer Response

report. Our ndings indicate that,

or the most part, the initiatives

that were most requently

attempted are also the initiatives

that provided the greatest levelso supply chain perormance

improvement to the organiza-

tions. For example, inventory

management/reduction programs,

increase E-commerce transactions,

and adopt automation or

common supply chain practices

were attempted by more than

two out o three survey participants

and achieved very signicant or

signicant levels o improvementor the vast majority (more than

70 percent) who attempted these

initiatives. One initiative that

is contrary to this observation is

clearly dening the role o your

organization in healthcare which

was only attempted by 31 percent

o the survey participants but

helped 74 percent o those who

attempted this. Chart 12 shows

the dierences in which initiativeswere attempted by each

organization type.

41%o respondents have attempted at leasthal o the suggested EHCR strategicinitiatives

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Efcient Healthcare Consumer Response Update, continued

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23

BD is actively partnering with healthcare providers to help adopt many o theEHCR strategic initiatives most o which require data standards. The EHCR

fndings rom 1996 stand the test o time. Unortunately, most EHCR strategic

initiatives have yet to be implemented. As a result, the industry has not realized the

potential cost savings. BD has been moving towards the use o data standards or

more than a decade. For example, the Company has invested heavily in this area,

printing billions o GTIN bar codes on its products. However, most o these bar

codes are never scanned outside o BD. Barcodes and data standards are o little

value without broad adoption.


The lack o role and unction clarity o supply chain services in providerorganizations comes as little surprise given the seeming lack o appreciation o

many provider organizations C-Suites or the capacity o the supply chain services

to play key roles in margin mending. In a recent HFMA survey o CFOs

(November, 2008), designed to query CFOs on tactics and strategies they would

deploy in response to the economic downturn, not one CFO cited any tactics or

strategies which would engage their supply chain service.

James M. Smoker, MPA, CMRP, Director, Materiel Resource Services, WellSpan Health

It is exciting to see the number o respondents that have attempted implementa-

tion o the strategic initiatives listed in the EHCR report and the reported positive

results achieved. All healthcare organizations could beneft rom implementingthe strategies and the supporting GS1 standards.

Dennis W. Harrison, Sr. VP GS1 US and President of GS1 Healthcare US

Industry Reactions

It has been over a decade since

the Ecient Healthcare

Consumer Response (EHCR) was

published in 1996. The EHCR

exposed a number o existing

ineciencies in the healthcare

supply chain. This was

accomplished through a survey

o healthcare industry experts,

providing a cross-section oobservations and opinions rom

proessionals working in a

variety o organizations across

the healthcare supply chain.

Industry-wide obstacles to

cost-eective healthcare were

identied, and the need or

greater collaboration between

supply chain partners was

addressed. The EHCR suggested

that a potential savings o over$11 billion dollars could be

achieved through strategic

initiatives. We provide an

update o how these initiatives

have been integrated into

todays healthcare organiza-

tions and what improvements

have been achieved.


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Cost and Quality

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On average, survey participantsrom GPOs and distributor

organizations incur the majority

o their annual operating expenses

to support the healthcare supply

chain (HCSC) unctions. Interestingly,

healthcare providers are using

almost a third o their annual

operating unds to support the

supply chain. Within group

purchasing, distribution, and

provider organizations, healthcaresupply cost are incurred primarily

to support inventory and order

management. On average, survey

participants rom manuacturing

organizations spend their unds

more evenly across the supply

chain unctions.

31%o annual operating costs is being spentto support the supply chain o theaverage healthcare provider

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Cost and Quality, continued

The survey participants haveeedback systems in place or

their internal supply chain

customers and are actively

engaged in communicating

quality problems to suppliers

and emphasizing service

as well as price in supplier

relationships. Survey

participants have not actively

engaged in dening customer

expectations or developingormal corrective/preventive

action programs.

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Manuacturers, distributors andprovider are similar in the most

requently used measures to

track their supply chain quality.

Survey participants rom these

organizations indicate that they

are using traditional quality

measures such as percentage

o items on backorder, order

ulllment cycle time, ll rate

and picking accuracy to measure

their supply chain perormance.Tracking the internal customer

satisaction is more common

among healthcare providers,

indicating a heavy emphasis

on supply chain perormance

within their own organizations.

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Cost and Quality, continued

28

The savings identifed in the EHCR study o yesteryear and the Perect Order andData Standards initiatives o today are real. All participants need to put their egos

aside and come to the table to accelerate the pace o change. Inaction is our

biggest threat. We need to take the waste out o the supply chain now!

Stephen Sichak, Senior Vice President, Integrated Supply Chain, BD

When almost one-third o a providers operating expense is spent on procuring,

moving, and managing supplies, the strategic importance o good supply chain

management should always be obvious to every single hospital employee rom

the storeroom to the board room.


Our level o sophistication or measuring health care supply chain efciency

has dramatically improved compared to even just a decade ago. However, the

complexity o the supply chain presents signifcant challenges when we attempt to

drive out the waste so we can lower costs. Remember, what is important about any

investment here is how it relates to savings on the critical items and services health

care providers need or patients every day. Thats the measure that

matters and thats where we need to ocus our energy.

Scott Downing, Executive Vice President, Supply Chain Services, VHA Inc.

Expenses are not just another line on a budget variance report but may be

balancing the investments made with the expected return to improve supply chain.Not only must we continue to measure improvements and justiy projects, but we

have to understand the true costs o manuacturing and logistics outside o our

hospital walls. Managing reight and truck capacity is no longer the realm o

manuacturers or distributors but are critical to supply chain experts within

the consumer hospitalsI the cost o supplies and services are integral to the

overall cost o the enterprise, then understanding how they work together is key

in managing the utilization o supplies and services. It is ar more eective to

know what is used in a surgical case and how oten than to know the supply cost

per case.


Health System

Industry Reactions

The rising cost o healthcare

services is a widespread

concern among healthcare

proessionals, government

ocials, and the public.

Although most stakeholders

are quick to acknowledge that

costs are too high, determin-

ing the contribution o supply

chain activities to the cost ohealthcare delivery is a more

dicult task. Furthermore,

understanding how these

healthcare supply chain costs

are distributed among

manuacturers, distributers,

GPOs, and providers is

challenging. Despite the

current cost explosion, there is

a lack o clear and measurable

quality metrics or healthcarelogistics perormance. You

cant manage what you dont

measure is a common adage

among managers. This high-

lights the importance o quality

perormance measures in

organizations that are oten

dubbed data rich and inor-

mation poor, a challenge

acing many healthcare

organizations. We present ourrst look into the current costs

attributed to healthcare supply

chain activities along with

reactions rom industry experts.


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Conclusions: The Path Ahead

29

The [State o Healthcare Logistics] Report will provide the industry with valuableinsights into each sector o the healthcare supply chain. The fndings show how

interdependent the industry is and underscores the need to continue to work

together on major initiatives to improve efciencies and decrease costs. This report

provides the road map to our portion o healthcare reorm.

Deborah L. Sprindzunas, Executive Director, AHRMM

The state o healthcare logistics is in a stage o development that is rewarding and

challenging all at the same time. The eeling o being on the brink o successul

change means the supply chain proessional may fnally see how healthcare logistics

can truly make a dierence in lower cost healthcare with the preservation o

continuously improving clinical excellence. The challenge is being able to changewith the demands o the process.


Health System

This report presents thecurrent state o the healthcare

supply chain related to cost

and quality issues. Today,

more than ever, as the country

prepares or baby boomers to

enter retirement, the demands

on the healthcare supply chain

continue to increase and play

a signicant role in healthcare

delivery and cost. The ndings

identiy several areas oopportunity that can help

increase logistic cost eciency

and quality improvement. As

our work proceeds, we need to

explore how to implement

change in these areas and

continuously look or new

opportunities to decrease cost

and improve delivery o health-

care. In order to better describe

the path ahead, we plan toconduct a series o ocus groups

with the intent o dening the

next steps in achieving health-

care supply chain excellence. It

is our hope that ten years rom

now people will look back at

this study and attribute many o

the new and innovative changes

made in the healthcare supply

chain to the opportunities

identied in this report. Ocourse, none o this will occur

without continued participation

and collaboration o healthcare

supply chain stakeholders. We

welcome your thoughts and

observations regarding the

survey ndings as described in

this report.


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Participants and Methodology

All data presented in this report wasgathered in November 2008 through

an online survey completed by 1381

healthcare supply chain proessionals

or a response rate o twelve

percent. The survey, administered

by the University o Arkansas Survey

Research Center, covered a range o

supply chain-related topics including

collaboration, strategic initiatives,

expenditures, and perormance.

More than three out o our

respondents work or a healthcare

provider with the balance made up

o manuacturers, group purchasing

organizations, distributers and other

healthcare supply chain organizations

such as consulting. Tremendous

expertise is represented in the

participant base where two out o

three respondents have more than

ten years o healthcare supply chainexperience and many (45 percent)

have more than twenty years o

experience. The vast majority o

respondents hold manager-level

and above positions within their

organizations, with eighty o the

respondents being C-suite executives.

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31

SponsorsThe Center or Innovation inHealthcare Logistics (CIHL) is an

industry-university partnership

that leads a nationwide eort to

identiy and oster systemwide

adoption o ground-breaking

healthcare supply chain and logis-

tic innovations. CIHL acilitates

collaboration among research-

ers at the University o Arkansas

fagship campus in Fayetteville,healthcare provider organizations,

and industrial sponsors including

Wal-Mart, Arkansas Blue Cross

and Blue Shield, VHA Inc., the

Association or Healthcare

Resource & Materials Manage-

ment, Procter & Gamble Co. and

IBM. Additional inormation can

be ound at cihl.uark.edu.

The Association or HealthcareResource & Materials Management

(AHRMM) is the leading national

association or executives in the

healthcare resource and materials

management proession. A

proessional membership group

o the American Hospital

Association, AHRMM serves more

than 4,000 active members.

Additional inormation can be

ound at www.ahrmm.org.

AcknowledgementsWe would like to recognize

the hard work, dedication, and

participation o many individuals,

without whom this research

would not be possible. We are

most grateul to CIHL and

AHRMM or their nancial

support and cooperation. We

sincerely thank our research

assistants, Brian Smith and Jared

Townsley, who actively participated

in every step o this research. We

also benetted greatly rom the

eort and dedication put orth by

Sarah Oaks, Associate Executive

Director o AHRMM/AHA. We

are grateul to GS1 US, the

members o the Strategic

Marketplace Initiative, and

Materials Management in Health

Care magazine or their supporto our eorts. We are indebted

to the healthcare supply chain

organizations and proessionals

who contributed their time

and expertise to the success o

the survey.

Contact inormationHeather Nachtmann, Ph.D.

Department of Industrial

Engineering

4207 Bell Engineering Center


Fayetteville AR 72701

[email protected]

(479) 575-3156

Edward A. Pohl, Ph.D.

Department of Industrial

Engineering

4207 Bell Engineering Center


Fayetteville AR 72701

[email protected]

(479) 575-3156

Contacts and Acknowledgements


32/32

This research was supported by the Center or Innovation in

Healthcare Logistics at the University o Arkansas and the

Association or Healthcare Resource and Materials Management

o the American Hospital Association. Any opinions, ndings,

conclusions, or recommendations in this document are those o

the authors and do not necessarily refect views o the sponsors.

Th t d it ti thi t i

2009, Nachtmann and Pohl

Designed by KinneyKusek, Inc.

Publication title: The State of Healthcare

Logistics: Cost and Quality Improvement

Opportunities

Publication date: July 2009

Publication number: CIHL09CQ01

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