ops management

MANAGING HEALTH CARE SUPPLY CHAIN: TRENDS, ISSUES, AND
SOLUTIONS FROM A LOGISTICS PERSPECTIVE
Charu Chandra
Swatantra K. Kachhal
Industrial and Manufacturing Systems Engineering Department
University of Michigan – Dearborn
4901 Evergreen Road
Dearborn, Michigan 48128-1491
Abstract
The U.S. healthcare industry is a large enterprise accounting for over 14.1% of the national economic output in 2001. It has been under pressure for cost containment and providing quality health care services to consumers. Its record of investing heavily on development of sophisticated drugs and diagnostic systems does not match that of technologies to manage its day-to-day operations.
In order to achieve improved performance, healthcare supply chain must be efficient and integrated. The driver for this integration is logistics and supply chain management. This paper describes trends, issues and some solutions for logistics management for Health Care Supply
Chain with concepts drawn from Industrial Engineering, and Operations Research disciplines applied to specific domains. A healthcare supply chain template utilizing Ecommerce strategy is presented. Use of simulation, optimization, and information sharing techniques are demonstrated to optimize purchasing and inventory policies. (Keywords: Health Care Supply Chain, Health Care
Logistics, e-Health Care)

1. Introduction
The US healthcare industry accounted for 14.1% of the U.S. economic output in 2001 (URL:
(http://www.cdc.gov/nchs/data/hus/tables/2003/03hus112.
pdf). Various studies of this industry point to lack or failure of basic quality-control procedures, and misalignment among consumer needs, payers and provider services, as primary causes for building waste into industry management practices.
Pressures on the industry have fostered innovation in the design of services and organizations. Most of the innovations have targeted cost reductions in key functions, including logistics. The

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