Executive Briefings

Big Changes Are Coming in Healthcare Supply Chains

Laurel Junk, vice president of supply chain with Kaiser Permanente, details the transformation that's under way in the hospital industry, driven by healthcare reform and a new focus on the ultimate "customer" - the patient.

There's a general assumption that the delivery end of the healthcare industry - the hospitals - are "recession-proof." Not so, says Junk. In the most recent downturn, they too have lost business. Meanwhile, the looming prospect of healthcare reform has created a "two-wave tsunami," forcing the industry to restructure and take a close look at costs.

Kaiser, which runs some 37 medical facilities and 450 office buildings, has undertaken a number of initiatives as it seeks to become more efficient and forge stronger links to the clinical side of the business. The goal is to get a better handle on how the delivery of services is related to cost. "We have not had to understand this in the past," Junk says.

Kaiser's efforts are already paying off on the clinical end. Patients can go online to schedule appointments and talk to a doctor. There has been less investment on the back end, in key areas such as accounts payable. Junk says Kaiser is implementing its first enterprise resource planning system in 30 years. At the same time, it has become acutely aware of the impact of efficient supply-chain management on patient care delivery. "We're making sure that our hundreds of thousands of products are there every day for our patients," she says. "There's a lot we can learn in how to better run our supply chain."

Kaiser still needs to get some of the fundamental processes into place. There's plenty of room for improvement in demand planning, forecasting and inventory management, Junk says. By tracking the flow of products more closely, the company hopes to link its supply chain "with our core mission of treating patients." She sees additional opportunities for becoming greener, while continuing to drive out costs. In the end, Junk says, supply chain can "earn a complete full seat at the table, in terms of senior leadership."

To view this video in its entirety, click here.

There's a general assumption that the delivery end of the healthcare industry - the hospitals - are "recession-proof." Not so, says Junk. In the most recent downturn, they too have lost business. Meanwhile, the looming prospect of healthcare reform has created a "two-wave tsunami," forcing the industry to restructure and take a close look at costs.

Kaiser, which runs some 37 medical facilities and 450 office buildings, has undertaken a number of initiatives as it seeks to become more efficient and forge stronger links to the clinical side of the business. The goal is to get a better handle on how the delivery of services is related to cost. "We have not had to understand this in the past," Junk says.

Kaiser's efforts are already paying off on the clinical end. Patients can go online to schedule appointments and talk to a doctor. There has been less investment on the back end, in key areas such as accounts payable. Junk says Kaiser is implementing its first enterprise resource planning system in 30 years. At the same time, it has become acutely aware of the impact of efficient supply-chain management on patient care delivery. "We're making sure that our hundreds of thousands of products are there every day for our patients," she says. "There's a lot we can learn in how to better run our supply chain."

Kaiser still needs to get some of the fundamental processes into place. There's plenty of room for improvement in demand planning, forecasting and inventory management, Junk says. By tracking the flow of products more closely, the company hopes to link its supply chain "with our core mission of treating patients." She sees additional opportunities for becoming greener, while continuing to drive out costs. In the end, Junk says, supply chain can "earn a complete full seat at the table, in terms of senior leadership."

To view this video in its entirety, click here.