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e Business Strategy - Hospitals

Dinesh Pradeep (MS08A018)Ramakrishna krishnaswamy (MS08A036) | Sunayan Pal (MS08A053) | Karthikeyan P (MS08A028) |

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1. Introduction

2. Hospital to supplier linkage

3. Hospital to Customer linkage

Contents

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Health care value chainIndia

USA

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Value Chain Inefficiencies• The ‘traditional’ procurement cycle for hospitals especially in

pharmacy, diagnostics harbours many inefficiencies that lead to sub-optimal unit prices, long order fulfilment cycles, high inventory levels and high processing costs

Supplier – Hospital Value Chain Inefficiencies

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Hospital procurement is often treated as a single amorphous cycle, there are actually three distinct cycles: sourcing, order management and payment. An e-procurement strategy should address opportunities for minimum of 20% savings across all cycles & increase efficiency by 25% in all the sectors .It also enable to share all type of resources in different group hospitals.

Supplier – Hospital Value Chain

Procurement – The 3 Cycle Model

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Supplier Relationship Management in Health Care

Management oriented view

Technology focused view

Main Focus Proactive development of relationship between Enterprise and suppliers.

Design, implementation and control of cross organizational relationship to suppliers

Exchange of improvement ideas between buyers and suppliers

Coordinate of procurement process and monitor the quality of different suppliers.

Automate all the procurement activities between the supplier and the enterprise.

Integration of the suppliers in the procurement process.

Key Objectives

Enhancement of co-operation and quality of information flow

Continuous improvement with suppliers by encouraging innovation.

Compliance with contract and negotiation

Better risk control through better information flow

Reduction of cycle time, process cost, better value(TCO)

Lean processes and consolidation of suppliers base

Improvement of process quality

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Matrix

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Supplier Relationship Management

•Regulatory setting: The health care market is completely administered by government agencies•Market structure: Health care shows, in contrast to other industries, a typical seller’s market structure.•Technological advancement: Technology is advancing quickly. New possibilities for cooperation (e.g. vendor managed inventories, JIT ordering and delivery, collaborative procurement planning). However, health care is rather underdeveloped in terms of its IT infrastructure.

Factors influencing cooperative relationship with suppliers

Information Systems for SRM

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eHospital - ProcurementSchematic Representation of the core procurement functionality

Client Vendors/Trading Partners

Raise RFQ in SAP View RFQ

Raise Quotation againstRFQView Quotation in SAP

Negotiate Quotation in SAP Negotiate Quotation

Generate QCF in SAP

Raise PO in SAP View PO

Raise PO amendment in SAP View PO amendment

Raise Material Return Slip in SAP View Material Return Slip

Update Payment details in SAP View Payment Details

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eHospital

Vendor/ Supplier Functionality: Key Features enabling transaction with Client Company

• Vendor views the RFQ on the web• Vendor raises a Quotation on the web• Vendor can make changes to Quotation• Vendor receives the PO on the web• Vendor can view the amended POs on the web• Vendor can view the Material Return Slips on the web• Vendor can view the payment details on the web

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Logistics• In June 2006, Purdue Pharma upgrade and

expand their Electronic Product Code™/Radio Frequency Identification (EPC/ FID) & serialisation programmes.

• This effort established RFID serialisation for bottles, to case, to pallet data relationships, to support item level track and trace, through the supply chain.

• By 2007,Purdue Pharma was manufacturing and shipping bottles & cases, placing them ahead of the curve in complying with the customer & regulatory requirements and laying the foundation for addressing problems such as diversion and counterfeit drugs.

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Reverse Logistics

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Automated Point of Use SystemsThese devices are placed in the various wards

throughout the hospital Only authorized users can pull inventoryPull transactions are inputted directly on

monitor or by pressing a “take” button located on the appropriate bin.

Systems keep perpetual inventory records and automatically place orders based on the established reorder and order-up-to points.

reduce shrinkage and increase cost capture.

APU systems allow for visibility into the entire hospital’s inventory.

A shortage in one ward can be mitigated with excess inventory from another ward until the next replenishment arrives

data collected by APU systems can be used to automatically generate 14 statistical appropriate inventory policies

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Consumption Support

• Cardinal brought together a cross-functional team to create an over-arching customer service excellence strategy and other initiatives that would drive growth.

• Team members included representatives from the customer service centre, credit department, IT, inventory, upper management & any unit involved in affecting customer interactions.

• mySAP CRM integrates customer, product & pricing information for customer service and credit agents, giving a single, efficient and consolidated view of information to answer customer queries.

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Hospital - Customer

Health Care Value System

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Health delivery system in India

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Expectations

• Satisfying and effective clinical experience

• Positive experience with doctors

• Empowerment• Hassle free claims

process• Transparency• Safety and privacy• Cost effective

• Facilities• Incentives• Knowledge

• Operational efficiencies• Brand advancement• Improved employee

productivity and morale• Competitive advantage

by lowering costs, new business, new markets etc.

• More referrals from existing customers

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Identifying opportunities

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Wireless sensor network

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KM – Value creation

• Foster innovation• Streamlining

response time• More patient turn

outs and improved bed occupancy

• Enhance employee retention

• Streamline operations and reduce cost

• Accessing remote information and expert opinion online

• Increase productivity through reuse of knowledge

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Healthcare information system

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Apollo hospitals

• Integrated hospitals chain• Hub and spoke model• Pioneer in telemedicine• Healthcare Hiway• IT driven services

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Telemedicine

• Minimal patient displacement for quality treatment• Decrease in the relocation of medical specialists to

the patient • Cost effective method of health care delivery• More efficient and effective use of medical and

technological resources • Enhanced diagnostic and therapeutic quality of care • New possibilities for continuing education or training

for isolated or rural health practitioners

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