Executive Briefings

Healthcare Supply Chain Can Benefit from Retail Practices

A new survey by researchers at the University of Arkansas indicates that the healthcare industry's supply chain lags behind the retail industry supply chain and could benefit significantly from adopting several of retail's best practices.

"The retail industry has a long history of adopting automation, complemented by scientific and mathematical models, to improve supply-chain operations," said Ed Pohl, associate professor in the department of industrial engineering. "Conversely, healthcare has been relatively slow to adopt these methods. Based on survey responses, we believe that considerable efficiency gains might be available to the healthcare supply chain through the adoption of best practices from the retail supply chain."

The researchers found that the retail supply chain has done a better job in the critical area of collaborative planning, forecasting and replenishment, which involves suppliers and retailers - or health-care providers - working together to adopt order forecasting and inventory planning to create an integrated supply-chain network. Also critical, health care is struggling to catch up with retail in the area of scanning technology, which is used to track materials by means of barcodes and RFID technology. The healthcare supply chain also is lagging behind retail in professional training and education, specifically the skills associated with materials-management, purchasing and warehousing.

Considering retail's success, Pohl and faculty colleagues Manuel Rossetti, Heather Nachtmann and Vijith Varghese conducted the survey to get a better understanding of the gaps between the two supply chains and to learn how the healthcare supply chain might benefit from adopting some or all of the best practices used by retail.

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"The retail industry has a long history of adopting automation, complemented by scientific and mathematical models, to improve supply-chain operations," said Ed Pohl, associate professor in the department of industrial engineering. "Conversely, healthcare has been relatively slow to adopt these methods. Based on survey responses, we believe that considerable efficiency gains might be available to the healthcare supply chain through the adoption of best practices from the retail supply chain."

The researchers found that the retail supply chain has done a better job in the critical area of collaborative planning, forecasting and replenishment, which involves suppliers and retailers - or health-care providers - working together to adopt order forecasting and inventory planning to create an integrated supply-chain network. Also critical, health care is struggling to catch up with retail in the area of scanning technology, which is used to track materials by means of barcodes and RFID technology. The healthcare supply chain also is lagging behind retail in professional training and education, specifically the skills associated with materials-management, purchasing and warehousing.

Considering retail's success, Pohl and faculty colleagues Manuel Rossetti, Heather Nachtmann and Vijith Varghese conducted the survey to get a better understanding of the gaps between the two supply chains and to learn how the healthcare supply chain might benefit from adopting some or all of the best practices used by retail.

Read Full Article