Supply Chain Processes


Supply chains in the healthcare sector are becoming ever more complex as the pressure for growth and flexibility continues.  Introduction of new and complex therapies, joint ventures with partners in other industry sectors or even competitors, increased globalisation of sourcing and the need to effectively manage risk have transformed traditionally vertically integrated supply chains.

In turn, these changes have increased the scrutiny on the performance of supply chains and the processes used to manage them, for example:

  • The need to never miss an order
  • Optimisation of inventory to release tied-up capital
  • Increased responsiveness and agility to changing market dynamics and increasingly tailored therapies
  • Lead-time squeeze from the need for enhanced customer service
  • Pulls on central inventory pools from multiple channels, e.g. simultaneous clinical and commercial demands

Once a back-room activity, multiple recent events have thrust supply chain management into the limelight and companies are increasing reliance on their suite of processes to ensure efficient and effective supply chains.

Introducing and maintaining a comprehensive, fit for purpose suite of processes is therefore a cornerstone of capable supply chain management.

Where to start

There are many different ways to start improving the performance of your supply chain processes.  One end of the spectrum is to focus on a particular ‘pain point’ that needs to be addressed.  At the other end of the spectrum, you may want to take a more holistic view of your overall end-to-end process.  Starting points for either could be:

Improving a particular performance ‘pain point’

You may have identified a specific pain point in your supply chain performance suggesting a certain process performance issue that needs to be addressed.  A deep dive diagnostic assessment of the issue would be in order, to identify the root cause of the problem.

This requires a cross functional and multi-skilled team that brings an understanding of the business context, effective problem analysis and solving skills and best practice knowledge together to ensure a holistic evaluation is undertaken.

Assessing your end-to-end performance

Alternatively, you may require assessment of the end-to-end processes for all or part of your supply chain.  For many organisations this would be a significant undertaking.  In this context, a thorough and effective gap analysis methodology is needed to assess and contrast your processes against industry practice to determine opportunities for enhancement.  This should include a detailed assessment of the comprehensiveness and trends from your KPIs and a systematic walkthrough of each process, each step being supported by detailed analysis of transactional data.

Again, having the correct team is critical, ensuring best practice and business knowledge combines with analytical and assessment skills.

What we've learned

Solutions need to be developed holistically and process variants standardised

Supply chains, by their very nature are an interconnected network of nodes.  Therefore, supply chain management processes need to work effectively across all impacted nodes and so processes are only really effective when they span the relevant scope of the supply chain.  Having multiple variants of any process can result in some nodes having multiple ways of working to deal with other groups.

This is wasteful and causes unnecessary confusion.  However standard processes need to be able to deal with varying scenarios and a ‘plug and play’ world.  Wherever practical, try to rationalise to a single agreed way of working.

Involve all of the key business functions

Effective Supply Chain Management relies upon orchestrating many different nodes and functions to work together in harmony. It impacts other parts of the extended organisation, inside and outside of your company’s boundaries. Therefore, these other partners need to be involved in process execution, decision making and developing your processes, to ensure they flow together and to aid buy-in when you want to effect change. This harmonised approach is the only way to achieve the desired outcome. In many organisations this can involve a large cast of characters, but a failure to involve key stakeholders at the right time will only lead to redesign, rework and resistance later in your implementation.

Make decisions based on facts and data

Improvement projects are often hindered by the concept of ‘solution du jour’ or ‘I know a really cool solution and I am trying to find a problem where I can be allowed to implement it’.  When identifying solutions, first make sure that you really understand the root cause of the problem you are trying to solve. Then make sure that your solution actually solves it.  It is all too common to find the solution didn’t work because it was not the right solution, or even that the solution applied just created a worse problem.  Avoid this trap.