Experts’ Views
on Healthcare
Supply Chain Strategies
www.healthcaresupplychainME.com
A STUDY BY
Q1 What are the latest trends that you are seeing in how organisations
are managing healthcare supply chain functions?
Dr Nipit Pirajev, CEO, Bangkok
Healthcare
GCC healthcare systems are facing
the new environment of fully
implemented universal health
insurance. The presence of third
party payers will rapidly shift the balance of influence
and decision making from provider driven to a more
complex provider-payer-regulator-patient multistakeholder model. This can lead to a fragmented, zero
sum and unsustainable system unless collaboration
and accountability across the value chain are brought
into play soon enough. The volume-based care model
will soon to be replaced with the value-based model.
Healthcare supply chain management (HSCM) is
certainly one critical function at the centre of this
transition. Never before are patient safety, health
outcome and customer experience plus system financial
sustainability taken more seriously as performance
indicators for health suppliers and vendors as well as the
hospital procurement team instead of just belonging to
the front line clinical teams. So the latest focus on HSCM
is that low cost alone is not enough; the cost factor
must be weighed against medical quality and patient
outcome. To achieve this, integration, collaboration
and in some cases consolidation, both internally and
externally across the healthcare value chain, is key.
© Informa Middle East. All rights reserved 2015
Fahad Al Melafekh, Supply Chain
Responsiveness Project Expert, King
Faisal Specialist Hospital and
Research Centre
Supply chain usually represents the
second highest operating cost after
labour, fluctuating from 33% to 50% of the full operating
budget in healthcare. The GCC healthcare leaders
have just realised the importance of such functions
where more focus on improving Supply Chain business
processes could foster more benefits to the organisation.
Thus there is recognition to the importance of linking
the medical and the business sides to collaborate with
each other, and technology is needed. The concept
of e-health has lately rose where healthcare and
the patient-related process are to be linked through
electronically delivered information. However, there are
more to come to maturity. The sessions were very professional
and collaborative towards moving
supply chain in the right direction.
Jimmy Johsnson, Director Supply Chain Management,
John Hopkins Hospital, USA
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Karima Ajhar Hakim, Procurement
and Materials Director, Bellevue
Medical Center
§§ Increasing the need and the
viguor to improve on operational
performance through enhancing
and maximising process efficiency.
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Driving cost out of operations and reducing
expenses within the supply chain process as a
result of economic and healthcare reforms through
operations streamlining.
Becoming more judicious with the resources that
we steward.
Having a comprehensive database and identifying
what is the needed information to ensure effective
planning and execution within the chain.
Ensuring the balance and the harmony between
quality improvement and the return on investment
analysis at the procurement level.
Considering the development of creative
relationships with suppliers and health care
providers as a market opportunity.
Leveraging cross-organisational knowledge throughout the health care organisation to assure
engagement.
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Samer Ellahham, Chief Quality
Officer, Sheikh Khalifa Medical
City
§§ Supply Chain is a part of the C-suite
and is being involved in strategic
projects across the healthcare
organisation.
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Excellent speakers
and discussions.
Nadie Abdullah Najib
Principal Admin Officer, DHA, UAE
Stefan Sickel, General Manager,
Group Pharmacy Procurement,
Mediclinic
§§ Supply chain function is becoming
more involved in business
operations for them to get a
complete understanding of what
they are purchasing and for what
reason. This allows supply chain managers to make
better decisions in the procurement process.
Supply chain functions are being centralised
to allow for central procurement, pricing and
negotiation control in large organisations.
Information technology is playing a much larger role
in terms of online purchasing, processes, sourcing
and communication.
Incorporation of a complete B2B process,
automated procure-to-pay process
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Major focus on validated, accurate, and well
communicated data, which adds value.
Supply Chain is key to the standardisation of care by
determining the best price and the best outcomes
and minimising waste.
Clinically integrated supply chain, where supply
chain professionals and clinicians work closely and
side by side.
Supply Chain based on long-term, mutually
beneficial relationships between trading partners.
Q2 What are your top 3 tips for driving value and eliminating operational
inefficiency in the healthcare supply chain?
Dr. Nipit Piravej:
Once again, current gaps in healthcare value and
efficiency are the result of the highly fragmented system
driven by zero-sum relationships. Some of the top
strategies include:
(a) Establishing alignment among healthcare value
creating teams from the clinical, admin and supplier
levels across healthcare continuum.
(b) Adopting evidence based practices, from clinical to
business.
(c) Integrating clinical, financial and general
management functions.
(d) Combining wellness with illness management at
both individual and population levels.
(e) Implementing connected information management
system across value chain.
Fahad Al-Melafekh:
As for healthcare Supply Chain in the GCC, I don’t think
we need to reinvent the wheel. In fact, many proven
© Informa Middle East. All rights reserved 2015
best practices are there to be implemented. The only
issue is how applicable are these best practices to the
GCC healthcare market dynamics and how it should be
modified and implemented.
Karima Ajhar Hakim:
§§ Agility to reduce cost and increase flexibility
through lean and efficient processes.
§§ Measurement and benchmarking to drive
continuous improvement through supply chain
costs and capabilities.
§§ Economic and clinical value analysis of supply chain
processes.
Stefan Sickel:
a. Focusing on product planning and forecasting
especially in the UAE market.
b. Aligning the supply chain and operations of the
business for better decision making.
c. The use of highly effective tools like six sigma and
lean mapping to ensure an efficient process.
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Q3 Is there a lack of talent in the field of healthcare supply chain
management in the region?
Dr. Nipit Pirajev:
It is fair to say that globally HSCM has been a relatively
neglected function. It is usually led by a manager
without direct presence in the C-suite and with a general
admin type of team that is quite disconnected from the
clinical and front line ones. So, lack of talent is a common
issue in most markets. The first step toward building up
more capacity is to highlight HSCM as a critical function
with re-positioning HSCM team to work hand in hand
with all front line operations.
Fahad Al-Melafekh:
Demand for healthcare supply chain talent is rapidly
increasing, and talent resources can’t cope with this
increase.
Karima Ajhar Hakim:
Raising the talent bar is a persistent initiative to achieve
optimisation, and thus raising the workforce talent even
higher is essential to focus on leading edge challenges
and solutions.
Stefan Sickel:
The talent is certainly available but in a young and
volatile market it is important that all the stakeholders
in the supply chain align and communicate better to
improve the overall maturity of the system.
Samer Ellahham:
The region has plenty of talent. Organisations should
learn from international experiences and appreciate the
local needs.
Excellent dialogue and sharing of experiences and best practices.
Clendon Raines, Senior Director Supply Chain, International Medical Centre, KSA
Q4 Which key performance indicators do you utilise to monitor suppliers
effectively in the GCC?
Dr. Nipit Piravej:
The shift from traditional volume-based healthcare
towards value-based healthcare model will also change
the way suppliers are assessed and rewarded. The
performance measures include three groups of KPIs,
namely safety, outcome (medical, financial, satisfaction)
and cost (in this case, non-labour related expenses).
Each group consists of a number of indicators relevant
to the healthcare context from macro to micro levels,
and for short, middle and long term measurement.
Two important points here (1) bringing all relevant
stakeholders on-board before actual implementation, (2)
HSCM decision is not the end point but the starting of
continuing assessment process to measure the outcome
for future improvement.
Karima Ajhar Hakim:
§§ Supplier’s on time or lead time variability
§§ Supplier’s fill rate
§§ Accounts payable days
§§ Supplier’s retention of inventory in time and value
§§ Percentage of order compliance
§§ Compliance with contract terms and conditions
Stefan Sickel:
§§ Service level
§§ Product price
§§ Product quality
§§ Stock availability
§§ Product range
§§ Competent and friendly staff
Fahad Al-Melafekh:
This depends on the organisation's strategy and focus
which in healthcare runs around four main attributes:
reliability; responsiveness; agility; and cost. But the
prioritisation and focus is different.
© Informa Middle East. All rights reserved 2015
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Q5 Which demand planning, forecasting and inventory management
strategies are you implementing to mitigate the risk of critical stocks outs?
Dr. Nipit Piravej:
There is no doubt that in any complex hospital and
healthcare environment, a fully integrated hospital
information system (clinical and non-clinical; EMR
and ERP) as well as a close-to-real time, closed-loop
operational automation system are critical tools for
achieving the balanced quality and efficiency HSCM
goals.
Fahad Al-Melafekh:
The occurrence and scale of demand uncertainty in the
GCC is high, which has created an enormous need to
establish collaborative supply chain activities among
its network. Partners need to cautiously plan the order
throughout the system. They should decide together
where, when, and in what amounts the inventories
should be available. They have to set up the response
system for when unexpected events arise. Therefore,
collaborative planning will be a part of the partners’
tactical and strategic plans to achieve the maximum
process efficiency.
Karima Ajhar Hakim:
§§ Stock management automated system for increased
visibility
§§ Integrated planning and forecasting
§§ Contracts management with suppliers
§§ Safety stock based on daily product usage and
product lead time with suppliers
§§ Efficient collaboration, communication and defining
accountability
§§ Continuous performance assessment, tracking and
auditing
Stefan Sickel:
§§ Tenders (including annual and multiyear forecasts
and purchase commitments)
§§ Establish and maintain excellent supplier relations
and communication
§§ Establishment and implementation of alternate
procurement models and import routes when stock
outs occur
§§ ERP system reports (IT) for planning
§§ Par level system (in-house)
§§ 2-bin system (in-house)
Informative, a good platform to share the knowledge
and experience among attendees.
Mohammad Kamal Khan, Materials Controller, Sheikh Khalifa Medical City, UAE
Q6 You are speaking at the Healthcare Supply Chain Strategies Forum.
How important is your topic to HSCM transformation for improved
patient outcomes in the GCC and why would you recommend that your
peers attend the Forum?
Dr. Nipit Piravej:
I will be speaking on Inventory and material
management best practice at the Forum.
Healthcare supply chain is a complex system involving
the production, distribution and storage (outside and
inside a care delivery unit) of thousands of products and
services to be consumed via complex healthcare processes
driven by multi-disciplinary healthcare professionals and
that will finally create direct impact on patient safety,
health outcome and cost of patients-providers-payers.
Effective management of healthcare supply chain is just
impossible without relevant information or data sets made
available to providers, suppliers and payers, in accurate
and timely manner as well as across the care continuum
of the patients. This has been the greatest challenge in
HSCM for long time. But with an advanced information
© Informa Middle East. All rights reserved 2015
and communication system, multi-dimensional data
can be easily and/or automatically captured from target
healthcare process or transaction along any clinical
workflow. Then, a new generation of powerful analytics can
process the captured “big data” to generate meaningful
information for management decisions and/or to trigger
clinical-operational-business automated responses. Health
information and communication technology (H-ICT) will
surely become the key enabling tool for integrating HSCM
with the rest of healthcare management functions to realise
value-based healthcare.
It is my great pleasure to be a part of this exciting event
and would like to encourage others to come to learn from
experts, share best practices and strengthen the GCC
community of HSCM practitioners for future collaboration.
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Fahad Al-Melafekh:
I will be speaking on supply chain master data
management optimisation at the Forum.
Being able to reach the level of perfect order is very
challenging and Master Data Management Optimisation is
the key for that. Being able to build a network and linkage
for all healthcare related data will not just improve patient
outcomes, but also will drive value to those organisations
through streamlining supply chain processes and reducing
errors.
Karima Ajhar Hakim:
I will be speaking on procurement as an integral part of the
supply chain.
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Procurement as a key role in supporting the delivery of
quality, innovation, productivity and prevention.
Value based purchasing whereas any purchasing practice
is aimed at improving the value of the health care service
– where the value is a function of both quality and cost.
Sustainability of the health care organisation through
effective procurement to deliver immediate efficiency
and productivity gain.
Respond to challenges through quality
procurement performance and recognise areas for
improvement to ensure value for money is delivered
through its procurement activity and partners.
Clinical engagement in the procurement of medical
devices and supplies to improve patient outcomes
at reduced cost through clinical procurement review
partnerships.
Suppliers’ engagement channeling to collaborative
procurement hubs reflecting significant differences in
performance outcomes and processes.
Identification of critical supplies and suppliers to mitigate
risks of failure and to deliver quality care.
Transparency through availability of data and information
Review of procurement processes to be patient centered
through a lean and efficient process.
It is evident that health care supply chain is a highly evolving
sector and the summit will be an ideal platform to have
practitioners within this field come together to share
successes and concerns. Synergy is highlighted since there
is great power from people seeing possibilities in the face of
adversity. We can pledge to move forward, hold ourselves
accountable and form mastermind sessions to keep up with
the merging logistics of supply chain. The summit can also
© Informa Middle East. All rights reserved 2015
provide opportunities to discuss challenges and discuss
best practices by overseeing the future trends. We would be
able to identify various programs and initiatives that can be
implemented but moreover what organisational restructuring
is needed to sustain supply chain efficiency based on tangible
experiences within the countries in the area.
Stefan Sickel:
I will be speaking on the evolution of supply chain models
in the region and learning from developed markets.
We are living in the UAE, a region that has a multitude of
talent and expertise from all over the world. It includes
professionals with vast experience in the healthcare supply
chain from many different markets. Yet in reality we find
ourselves in a nascent healthcare supply chain with constant
stock-out situations and product shortages. Therefore, I will
be addressing at the conference questions about how we can
develop this supply chain and take its maturity to the level of
first world countries and what they are doing differently.
Samer Ellahham:
I will be speaking on Supply chain and the C-Suite:
managing the interface to achieve supply chain excellence
at the Forum.
Supply chains provide service to patients and consume
money. The sector is currently facing unprecedented
demands due to a number of factors like globalisation,
changing consumer sentiment, digital transformation,
market uncertainty, legacy systems, and limited talents. By
managing supply chain interdependencies and adopting
a full view of service and cost, supply chain executives can
amplify their organisational scope and heighten their financial
contribution. The C-Suite Interface is key here. As healthcare
organisations look for ways to improve revenues and
positively impact supply chain costs and working capital, their
corporate leaders need to start thinking about the critical role
that supply chain management plays in transforming their
organisation’s top line and bottom line. The C-Suite needs to
gain real value through revenue improvement, cost reduction,
working capital improvement, and risk mitigation as well
as make long-term improvements in customer service and
increased customer loyalty.
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ABOUT
#HealthSupply
Our panel of experts will be elaborating on these topics as well as other key themes in the industry at the
Healthcare Supply Chain Strategies on April 19-22.
Please visit www.healthcaresupplychainme.com for more information.
Who Will You Meet?
DELEGATE BREAKDOWN
20%
30%
Supply Chain Directors/
Heads
15%
Material Management
Directors/Heads
10%
10%
Operations
Directors/Heads
Procurement Directors/
Heads
5%
10%
CFOs
CIOs
Other
END – TO – END SUPPLY CHAIN ATTENDANCE
50%
15%
15%
10%
5%
5%
Healthcare
Providers
Distributors
Manufacturers
Technology
Providers
Consultants
Others
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