Posted: May 24th, 2022

Supply Chain in the Medical Industry

Supply Chain in the Medical Industry

The ‘customer’ referred to in this case study is the professor with the stomach flu. Dr. Martin and the staff in his office are the ‘company’ or organization that is offering the service to the professor. The doctor’s office provides the service needed. Quality of service has been studied in the area of business management for years because the market is more competitive and marketing management has transferred its focus from internal performance such as production to external interests such as satisfaction and customers’ perception of service quality (Gronroos, 1984) The meanings of “Quality” change based on need. This need in turn is based on product performance or product perception. Maintaining service quality is very challenging as quality is defined from the perception of the customer. In a service situation, the customer is in direct contact with the end product. (Foster, 2003)

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Until that experience, it appears from the case study (the professor was on a first name basis with the nurse in Dr. Martin’s office) that the professor had a cordial and satisfying experience with the staff in the office. The supply chain of the care provided in this case study of the health care delivery system spans from the professor who is the customer, the nurse who is the intermediary between the main service provider (Dr. Martin) and the professor, Dr. Martin (the primary care doctor), the HealthCheck Clinic and the Emergency room. The employees in the Employment Benefits office act as quality checks and monitoring mediums. They are able to monitor the service provided and offer checks and balances to the level of service that is needed.

The service provided by Dr. Martin in this supply chain is seriously flawed. In spite of the professor being in severe pain and discomfort, the doctor did not get back to him. It is understandable that doctors tend to fully book their appointments for the day as every patient in results in a ‘sale’ for the doctor. However, it may appear that there is a poor level of communication between the doctor and the patents that he sees. The nurse, Betty, acting as the ombudsman between the doctor and patient also has display a certain preference for patients not going to the HealthCheck Clinic. Nowhere in the case study is it explained however, as to why the nurse feels this way or if the doctor fears that he may lose patients (customers) to the clinic. The most startling part of the entire scenario however, is that the doctor is also an important part of the clinic system that is operated. The article also clearly states that the clinic is much cheaper than the emergency room and the benefits office prefers that the clinic be used as a first option before the emergency room.

The surprising, or rather the disturbing, part about the service provided in this case study is that the doctor at no point in time contacted the customer to enquire about the service that he could provide. The only interactions in the doctor’s office were between the Professor and the nurse. In an ideal situation, Dr. Martin could have called the professor to follow up at the end of the business day or between patients. In a worst-case scenario, a call could have been made the next day to follow up and enquire about the effect of the medication that was provided.

In an environment such as managed healthcare, it is becoming increasingly clear that doctors and patients are experiencing shorter interaction- and follow up times. This became obvious in the case study described. Another trend is also being observed in the health care industry that is being managed in the form of a production or manufacturing line mentality. Here a prescription was written out for a patient that the doctor that not even seen. Prescriptions and remedies that are doled out often are done with access to limited information that the doctor might have based on the information that is provided by the patient. It is also very strange that Dr. Martin had a major reservation in recommending his patient to another doctor in spite of his inability to meet with the patient.

The experience that the professor had in the HealthCheck Clinic on the other hand identified a treatment method by which the patient (customer) was offer the best available consulting and diagnosis. The professor experienced a minimum wait time. And the service providers at all levels were very courteous and polite. This makes a significant difference to patients who are often in pain and discomfort due to their afflictions. The nurse practitioner ensured that the professor was examined and a detailed blood study conducted to identify the cause of the problem. Even after confirming the primary cause of the problem (a viral infection), the nurse made certain that there was no internal bleeding and all other vital signs were normal.

The perplexing part of the interaction was that the people in the HealthCheck Clinic as well as the benefits office were not really sure as to the reason why Dr. Martin would not give out a referral even though he was one of the doctors in the Clinic’s staff. The main excuse was that the professor would not get the best care, which was obviously not accurate and true in this situation.

The supply chain for this scenario has to undergo significant rework. Poor communication channels appear to be the major problem in this case. It appears that the benefits office, the university’s health care plan and Dr. Martin’s office do not all see the same flow of service or transactions for the same service. Supply chain in any organization is generally identified as a group of organizations or individual departments, upstream (suppliers to the company) or downstream (moving the product produced by the company to the market or the next user), linked together to help move any product from the source to the supplier. (Trent, 2004) It is easy to recognize therefore that a supply chain exists in any organization actively involved in performing a service.

An attempt to run a health service in the most efficient and lean manner requires that all the individual stakeholders and participants be made ware of the requirements for the preferred supply chain. Creating a constancy of purpose towards improvement and strategy planning based on long-term goals of the health services can help enlighten those involved with the operation to problems that they face or might face. Any operation has a set of processes and a pre-defined methodology for completion of any task. In order to keep costs in check while offering the best service possible to the patients, a suitable communication flow should be maintained and all involved in the process should be aware of the method or operating procedures that should be undertaken.

In an industry such as the healthcare industry, it is impossible to plan for every scenario and condition. For Supply chain management (SCM), the first step to be considered is the understanding of all the processes within the industry. How the different situations are handled currently and how they should be handled in keeping with the new cost management structure is also needed. All the stakeholders in the supply chain should also be offered training to introduce them to the reason for doing things a certain way. Critical analysis of the every aspect of “value addition” to the service is needed along with non-value added activity that only increases the final cost of the service but does not provide enhancement or additional benefits to the quality of service provided.

The need to reduce costs and in many cases improve the profitability of the healthcare systems have encouraged measures that many doctors and healthcare personal often do not prefer or even like to practice. In reality, this resistance to accepting the new ideas that are introduced as a result of the changes that any supply management system introduces is probably the most significant reason why the supply chain sees failures and problems. Detailed understanding of the reason why a certain process or procedure has to be undertaken can help alleviate the concerns that might be felt during a change implementation.

Quite a few important ethical issues arise with reference to the healthcare industry. There is growing concern that doctors are being stretched to their limits, with respect to the scope and the range of the services that they can provide. In the case of managed healthcare systems, there is also an increased use of nurse practitioners. These are replacing doctors in areas where critical analysis and judgment calls might not be required. Doctors are statistically therefore treating more significantly sick patients put them at higher risks with respect to malpractice situations and performance results. Unlike many other service organizations, it is also being observed that the healthcare industry’s mistakes and error are more fatal. Mistakes and errors in diagnosis and treatments can result in the death of a patient. In this case, the very act of writing a prescription without seeing a patient could be fatal if there is an interaction and the doctor is unaware of the conditions.

In refusing to give the referral Dr. Martin could have also prolonged the symptoms and the discomfort that was being experienced by the Professor. The failure to treat the problem at the initial stages could have resulted in the professors being subjected to internal bleeding and possible hospitalization for an extended period of time. Referrals are generally made when doctors either have no time or are of the opinion that an expert might be better for the symptoms being displayed. Dr. Martin’s constant refusal, made through his nurse Betty to the professor, also indicated that the Doctor had reservations that might be unjustified. The professor should however not have to be in discomfort due to no fault of his and the nature of the medical industry. Countries where managed health plans are the norm are increasing also observing that patients are not always getting the treatment when they need it the most and this in turn is affecting their quality of life.


Foster, S. Thomas. Managing Quality: An Integrative Approach. 2nd ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2003.

Gronroos, C. “A Service Quality Model and Its Marketing Implications.” European Journal of Marketing 18 (1984): 36-44.

Trent, Robert J. “What Everyone Needs to Know About Scm.” Supply Chain Management Review 2004.

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