The NHS was recently involved in two high profile supply chain fiascos. First, it failed to order enough flu vaccine to immunise patients who needed it. Then a report revealed that it overspends £500m a year on supplies, including nurses’ uniforms, bandages and paper clips.
Although the NHS is a public sector organisation, the symptoms of its supply chain problems are also familiar to many companies trading in the private sector. These symptoms often point towards poor supply chain management.
The NHS could do well to take heed of how some companies have avoided nightmare scenarios by adopting a more efficient IT approach to supply chain management. Alliance Healthcare is an excellent example.
It uses web-based software as a service (SaaS) to manage its supply chain and now as a direct result, more accurately forecasts supply and demand. It can confidently forecast what purchase orders to place and has reduced stock holding costs. Alliance Healthcare has also seen its volumes increase by 30% without having to add any extra resource to manage it.
Web-based supply chain management software brings a number of benefits. Using it can cut costs, waste and lead times. Having a centralised web service to access information from a number of suppliers often leads to efficiently sourced, quality products and improved services.
To achieve these benefits you need visibility; an accurate, up-to-date, tactical view of your supply chain partners’ operations, along with the capacity to make sensible decisions based on what you see. SaaS for supply chain management lets you track and manage your supply chain from specification through to sign-off and production. It brings together all of the people in your supply chain – buyers, merchandisers, technologists, agents and suppliers. With access to real-time business intelligence all parties can work together to meet your commercial needs.
The volumes of flu vaccine that the NHS ordered earlier this year were based on estimates from recent years. Of course, the seasonal peaks and troughs in demand for some products and medicines can be difficult to predict. I would contend that those organisations with the clearest, most visible pictures of their supply chains are the best equipped to accommodate these spikes in demand.
With supply chain management software, an organisation can see exactly what is happening to its shipments and manage them in real-time. If demand for a specific product is high, having the right software makes it easy to identify and fast-track that product.
Supply chain management software can help organisations to keep spending under control and it could have provided the insight that the NHS needed to achieve this. Having a clear view of your supply chain means that you can monitor the performance of all of your suppliers – you can see how much each charges, how quickly each delivers and what value each adds to your business. Acting on this information, and being selective about suppliers, can help a business to improve the quality of the products or services that it offers to its customers.
It would be beneficial to have a supplier portal that lets the people in your supply chain communicate and share information, so that suppliers, buyers, merchandisers and supply chain managers can collectively make the right decisions about producing and shipping the goods that contribute to the success of your business.