A supply chain can be defined as a network of autonomous and semi-autonomous business entities collectively responsible for procurement, manufacturing and distribution of products and services to final consumers. Health care industry has been motivated by cost and risk to manage their supply chain networks. According to previous research by Efficient Healthcare Consumer Response, much of the cost in healthcare (48%) is as a result of inefficient supply chains. Healthcare supply chains centered on distributors rather than manufacturers resulted in enormous costs impacts to the industry.
According to the research by Chandra, (2001) in order to achieve the best out of the supply chain, a collaborative planning, forecasting and replenishment technique need to be adopted in healthcare industry.
The emergence of e-Health supply chain is attributed to the development of electronic internet and e-commerce. Organizations and internal agents together with the environment facilitate the evolutionary complexity of the network structure and collaboration mechanism of the supply networks. There is an interaction between the regulators such as the government and the industry players connected by the supply chain.
The emergence of e-Health supply networks is credited to the explosion of information technology. Just like the LVEA supply network traced back to the 1970 in China, where a local farmer realizing the lack of suppliers of Alternating Current Contractors for the coal mining industry build a company to make the devices. However, the company was closed by the government as a result of laws prohibiting private owned firms.
e-Health supply chains networks is decentralized, dynamical and loosely controlled initially. The geographical dispersion of the supply network, where some suppliers are far away from the consumers of healthcare equipment presents horizontal and vertical complexities at the same timed.
As new items are rolled into the market, only the manufactures with high quality products survive as government regulations eliminate those players that do not meet the standards. As regulation compliant firms populate the healthcare industry, there is need for differentiation to beat the tough competition. Organizations such as ZT have been characterized with differentiation strategies. The increased complexity of the product structure as well as the increasing wide and depth of the network with decreased geographical dispersion of the supply network prompted the development of distributors, sales agents and warehouses at regional locations. This is the stage that advances to the maturity stage where horizontal-vertical-dependent collaboration schema is in effect.
Information technologies are used extensively at the maturation stage to design and manufacture products capable of controlling themselves. The net result is the establishment of E-Healthcare supply chain model facilitated by internet and online experience. The technology integrates web front-end interactions with back office systems to result in customized transaction systems, Web-based EDI, electronic catalogs, and web-based electronic market places. This kind of systems enables the consumer to get direct to the system of choice and arrange for ordering, payment and shipping of the preferred product or service. This ability is powered by the Extranet, linking partners in the supply chain management to available information on-line. Extranets contrast intranets because intranets are used to link technologies, businesses, processes and organizational constituencies into a network capable of displaying its products and services to the consumers over the internet
References
C.D., B. (1998). Integrating Healthcare Supply chain. Healthcare Financial Management.
Chandra, C. C. (2001). Object-Oriented Data Model for Suply Chain Configuration Management. Proceedings : Thenth Annual Industrial Engineering Research Conference (pp. 20-22). Texas: IEBC.
EHCR. (2000). Efficient Healthcare Consumer ReSponse Assessment Online. EHCR.
P, B. (2000). Taking on the Health care supply chain. MSI.
