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Supply Chain Management in the Healthcare Institution Essay Example

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Supply Chain Management in the Healthcare Institution

Supply Chain Management in the Healthcare Institution. In overcoming challenges in decision making processes regarding purchasing decisions, Toba, Tomasini & Farhan (2008) advise that institutions should disregard the majority rule. This mode of making decisions should be replaced by the consensus method which minimizes the occurrence of misunderstandings and opposition. This also increases the compliance rate from physicians.In 2004, total healthcare spending per person in the United States was $6280. This is representation of 16% of the US gross domestic product (Toba, Tomasini & Farhan, 2008). In regard of the total expenses of the United States government this is a big value that can be cut down by simple arithmetic of reducing the expense incurred by medical institutions.

Analysts have argued that this inflation in the cost of provision of healthcare of healthcare is greatly attributed to the mishandling of medical service sin institutions. For instance, many analysts have pointed out the fact hospitals disregard the need to upgrade their supply management systems has made funding of medical services expensive (Toba, Tomasini & Farhan, 2008). They further argue that this is inevitable since healthcare institution must be supplied with medical appliances and instruments. Efficiency in supply management systems is important in cutting down the cost of running healthcare. Toba, Tomasini & Farhan (2008) point out that 25% to 30% of a hospital’s operating cost are spent on supplies. If the management team of a medical institution is effectively involved in this process the amount spent can be reduced to 15%. The 10 point decrease can provide extra funds to be used in other activities. The application of poor infrastructure in medical organizations makes it difficult to implement quality supply management strategies. Additionally, poor management of inventory creates a lot of waste in organizations. This can be reduced by medical organizations taking responsibility of ensuring their procurement processes are effectively monitored. In the modern corporate environment, many strategies have been developed to aid in cost saving in institution’s procurement processes (Toba, Tomasini & Farhan, 2008). For instance, there is the emergence of Group purchasing organizations which aims to provide medical institutions with cost cutting opportunities.The integrated delivery. Supply Chain Management in the Healthcare Institution.


Moon, S. (2004). “Taking Cost Off Supply Shelf,” Modern Healthcare, Vol. 34(47).

Toba, S., Tomasini, M. & Farhan, K. (2008). Supply Chain Management in Hospital: A Case Study. California Journal of Operations Management 1 (49-55).

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preview essay on Supply Chain Management in the Healthcare Institution
  • Pages: 3 (750 words)
  • Document Type: Research Paper
  • Subject: Management
  • Level: High School
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