The healthcare business is a mature industry providing a variety of products and services such as medical consumables, pharmaceuticals, catering, laundry, waste management, home-care products, information technology, vehicle fleet management and general supplies to their customers. Analysis of the healthcare industry indicates that the supply management system is one of the potential areas where cost reductions are highly possible since the healthcare industry has historically viewed itself as being operationally different from other businesses.

This is due to healthcare providers’ myth that, unlike managers in manufacturing industries, they cannot control or project their production schedules which is not true in today’s context. As a result, healthcare supply chains not only end up with poor inventory control arising from years of outdated supply chain strategies, but also from inefficient delivery of healthcare.

Traditionally, the suppliers meet the purchasing department in each hospital
individually to determine their replenishment needs or emergency needs. After confirming the purchase order, items and equipment are dispatched to nurse stations, operating rooms and wards by its staff. Meanwhile, the staff also takes back recycled items such as surgical instruments.

The role of hospital supply has been transformed in some countries due to a reduced need for storing goods between supplier delivery and internal delivery to departments. A more efficient hospital would receive items from its supplier and deliver them directly to the appropriate unit. A central distribution centre provided by a 3PL could be built to store materials from suppliers, and sterilise and pack soiled medical instruments for each of the hospitals.

The central distribution centre can be reorganised into a single contact point for suppliers and the number of suppliers will decrease eventually due to consolidation. This will result in the elimination of supplies delivery at a loading dock in each hospital. Instead, staff can deliver orders directly to the hospital corridors from the distribution centre, dropping them to the stock supply closets in the nursing stations, operating rooms and wards. This creates a “stockless inventory” effect or just-in-time delivery for the hospital’s warehouse and result in reduced storage space and personnel.

In the new system, labour utilisation increases while inventory levels and fill rates diminish. The linkage between hospitals is strengthened by a common network that allows for the sharing of expensive life-critical supplies and medical staff. Such partnerships will help healthcare facilities to manage limited resources, resulting in savings and the possibility of encouraging other hospitals to join the network. This can be considered a good move because with the bulk purchase of common and standardised items on a regular basis, economies of scale can be achieved. However, due to the specific nature of service provisions in hospitals, the purchasing of non-common items and small items are left to the individual hospitals so that quality control can be better assured by the respective hospitals.

Hospitals can also outsource some activities such as cleaning, security, cafeteria, food and laundry, in order to cut costs. A study conducted in Singapore recently showed that outsourcing logistics activities such as housekeeping and repair is pretty prevalent. Three hospitals reported outsourcing of information system services and two hospitals reported outsourcing of linen and warehousing services. Only one hospital outsourced food service, while other hospitals showed concern about food supply and quality when it is outsourced. Some managers believed that although outsourcing did not reduce the logistics costs significantly (there have been some reductions), the maximum benefits were obtained in terms of expertise held by the outsourced companies. In the long run, due to the need to focus on core competency and to reduce the costs, hospitals may outsource more logistics services to the service providers.

Traditionally seen as a bastion of male workers, the logistics sector is gradually opening up to women. But a ‘glass ceiling’ that limits opportunities remains to be removed

Demographic trends suggest that businesses will increasingly be faced with the challenge of managing a more diverse workforce as the twenty-first century progresses.

Among of the most notable manifestations of such diversity is the growing number of working women, some of whom have fashioned highly successful business careers. In 1965, women held only 15 per cent of management and executive positions compared to approximately 40 per cent today in some developed countries. Furthermore, an increasing number of women are starting their own businesses.

The growing number of women in the workforce has highlighted a number of key human resource issues, including pay inequality, sexual harassment and unpaid maternity leave.

One of the most significant human resource issues affecting working women involves the so-called ‘glass ceiling’ – the notion that women have great difficulty in advancing into top management positions.

In this regard, logistics appears to present an intriguing paradox. While it is considered to be one of the most lucrative careers for women in developing countries, the ‘glass ceiling’ limits opportunities for them. According to Martha Cooper, a logistics professor at the Ohio State University: “Getting hired doesn’t seem to be a problem; but getting promoted does.” Indeed, it has been estimated that only slightly more than 10 per cent of director-level logistics positions are currently occupied by women.

There have also been a number of recent empirical studies dealing with employment opportunities and issues facing women in logistics in the USA. For example, several studies indicate that women are generally satisfied with their current positions and hold favourable views regarding their future in logistics. At the same time, several other studies reveal concerns regarding opportunities in the profession, with women likely to find fewer openings than those available for men. In addition, women are more likely than men to perceive the existence of gender discrimination in the sector.

WOMEN LOGISTICS MANAGERS AND CAREER BARRIERS

THE EFFECTS OF RESTRUCTURING ON WORKING PRACTICES- SENIOR AND JUNIOR WOMEN

A survey conducted by the Institute of Logistics in the UK of women transport managers through the Women’s Transport Network, has shown interesting results on the impact of restructuring on work conditions and work cultures; the impact of work practices and the implications for women’s experience of career barriers. Restructuring, in this case, referred to changes in middle management positions through delayering as the organisation takes on a more competitive position. Senior women working in the logistics field are more likely than women in junior positions, to identify the positive effects of increased promotion prospects, autonomy, team working and job security after restructuring. Despite the fact that they were also more likely to experience increased hours and work in the evenings due to de-layering, women in senior positions placed greater emphasis on increased motivation and loyalty to the company.

In terms of career barriers, as the table below illustrates, women logistics managers tend to experience attitudinal barriers, as evidenced by the relatively high proportions of women who identify the men’s club, prejudice of colleagues, and sexual discrimination. However, lack of career guidance was also seen as an important barrier. Senior women were more likely than junior women to complain of these attitudinal barriers. For example, sexual discrimination was experienced by 30.1 per cent of senior women but by only 9.1 per cent of junior women.

The fact that disadvantages associated with restructuring are less pronounced may point to greater opportunities for training in a changing organisation, more
challenges and a higher probability of new posts and positions, as older managers retire or as proverbial “dead-wood’” is shaken out. Perhaps more importantly, however, the climate of change may help to “unfreeze” and challenge entrenched attitudes detrimental to women and to create a new atmosphere of meritocracy, in which women can compete on a more equal footing with men, especially in the Middle East region.

As society demands higher environmental standards from the corporate sector, the drive towards a greener supply chain gains momentum.

In a recent survey by consulting firm McKinsey & Co., of 391 CEOs of companies around the globe, 95 per cent of respondents acknowledged that society now has higher expectations of how companies will meet their ‘public responsibilities’ than five years ago, and more than half said those expectations will rise further in the next five years.

“Many of the CEOs we interviewed observed that satisfying the shareholders is no longer good enough. Consumers will punish companies that don’t fulfill their public responsibilities, causing their market shares to decline,” wrote Debby Bielak, Sheila M.J. Bonini and Jeremy M. Oppenheim, in an article about the survey in the October 2007 issue of The McKinsey Quarterly.

Yet, while the drive toward a greener supply chain appears to be gaining momentum, the companies that are actually taking steps in this direction remain in the minority. While 59 per cent of CEOs in the McKinsey survey said they believed their companies ought to incorporate environmental, social and governance considerations into how they manage their supply chains, only 27 per cent said they currently do so. The primary obstacle, as the CEOs saw it, was the difficulty in changing practices at their companies’ suppliers.

Most supply chain managers are only now adding green to their ‘To Do’ lists and some initiatives are already on the drawing board. Big retailers, such as Wal Mart and Tesco, are beginning to ask their suppliers for information about their carbon footprint and the greenhouse gas emissions of the products they’re selling but these companies realise they don’t have the answers because they don’t know what their supply chains do.

So how should a company develop a green supply chain? The United States Environmental Protection Agency (EPA) has written a guide called the ‘The Lean and Green Supply Chain: A Practical Guide for Materials Managers and Supply Chain Managers to Reduce Costs and Improve Environmental Performance’. This is an outstanding guide that provides a systematic approach to implementing a Green Supply Chain. It favours a four-step decision making process.

• Step 1 – Identifying environmental costs within a process or facility.
• Step 2 – Determining opportunities that will yield significant cost savings and reduce environmental impact.
• Step 3 – Calculating the benefits of the proposed alternatives.
• Step 4 – Deciding, implementing and monitoring improvement solutions.

The manual also gives several great examples of what companies have done to ‘green’ their supply chains.

In addition, with the introduction of ISO 14000, it is hoped that companies will be more concerned about their environmental performance, not only with respect to gaining market advantage, but also in terms of the green supply chain.

Organisations are required to improve their environmental performance in order to be eligible for the ISO 14001 certification and are including environmental issues in their negotiation with suppliers to maintain their market share and, sometimes, even just to survive. However, in most Asian countries, environmental protection has also been treated as an additional cost to companies, particularly SMEs, who do not have the resources to improve their environmental performance. Companies are realising they can use their purchasing power to influence the suppliers for ISO 14001 compliance and some companies are providing training and technical support to their suppliers to improve environmental performance.

Green supply chain management (GSCM) provides companies with a means to enhance their productivity and quality and improve environmental performance. GSCM will assist organisations in improving their environmental performance by first reducing the waste at the source, and then reusing, recovering and recycling waste. Any residual waste will be treated by the end-of-lifecycle system. GSCM, therefore, could improve profitability of organisations, and create an advantage on competitiveness by reducing the costs of production and operation.

The chart below shows what a green supply chain looks like within a company. Sustainability can be a significant means for companies to reduce costs and there are several facets of the supply chain that can be improved by looking at them from a sustainability standpoint. The first issue that sustainable companies are focusing on is the design and manufacture of the product.

There are a lot of other ways to create value with green thinking. In the future, this is going to include the gathering of more environmental data that a company can package for its business customers and the information movement in this area is going to be profound. The problem, of course, is figuring out where a company can look to get the data that will allow it to measure its environmental impact.

One software provider has recently added a module to its solution that models a supply chain network for carbon emissions. Once the supply chain network is defined, including transportation lanes and modes, along with the size and location of each manufacturing plant and distribution centre, the system can very quickly come up with the current carbon footprint.

Take that concept one step further and the solution can simulate the optimal network design to achieve reduced emission targets. The system also has the ability to allow companies to model ways to reach a target emission level using carbon off-sets.

The ability to measure the greenness of a supply chain is going to be a competitive advantage in the future, according to the software provider. “We created this because one of our European clients was required to provide this type of information and didn’t know how to get it,” he says. “As we talk to our other clients in the CPG industries, they’re telling us that green is on their shortlist of goals for the year.”

In the future, companies will be moving to a sustainable supply chain. The harsh reality is that the industry needs to change what it is doing from a supply chain standpoint in order to ensure that future generations will have resources to use in their lifetime. The benefit of implementing a green sustainable supply chain is that businesses can improve their profitability and help the environment. Thus, green is not just the right thing to do but it can also be profitable.

Business Process Reengineering, or BPR, is changing the way companies conduct their core businesses by ‘revising’ the business process using Information Technology as a key enabler.

By and large, many business organisations today tend to assign individual employees focused tasks. The summation of such tasks is then taken into consideration by the management team to determine the resultant impact on business performance.

However, with each individual’s contribution, there are likely to be some undesirable risks such as inefficiencies, wastages, hidden costs and bottlenecks. These risks, when compounded, could also pose a significant threat. With BPR, the objective is to minimize these risks, while reaping the benefits to produce greater business value.

BPR is proving attractive to businesses, especially in the manufacturing and supply chain management environments. This is because by authorising line employees to monitor in-process real-time helps solve problems faster and with more confidence. This results in faster turn-around time to decision bottlenecks, increased productivity, and a more skilled and motivated workforce. In addition, it increases customer satisfaction and business confidence as well. Software solutions, which help manage these processes, are termed Business Process Management (BPM) software.

Ideally, BPR should focus on crossfunctional processes that belong to a supply chain to maximise its benefits. These benefits can be especially seen in one or more of the following engagements:

Relocating work to suppliers or customers. Let suppliers manage your inventories while having customers transmit orders using internet technologies. This reduces duplication of in-house work and data redundancy, thereby increasing focus on the core of your business specialisation.

Delaying the final product as late as possible. Building a standardised generic product at the initial phase of the process not only reduces your cost of production but also increases the accuracy of forecasting. Keeping any customised configuration to the end of the process minimises wastages and improves process agility. Enterprise Resource Planning, or ERP, systems increase the flexibility and agility in the business process by allowing replication of such configuration across multiple sites and, in return, bring about better visibility of work-in-progress.

Engaging in concurrent rather than sequential processing. As time is money for businesses, collaboration among different functional teams within a supply chain eliminates bottlenecks and minimises time wastage. Having Product Data Management (PDM) software is the ideal way to enable the building of complex products as it is possible to share product data simultaneously among marketing, procurement, research and development teams, while managing document version control and release.

Assigning case managers to deal with customers. Accountability for order fulfilment using Customer Relationship Management (CRM) software means better accountability by one person to the customer organisation, leading to increased visibility on customer delivery, improved communication, and higher customer satisfaction.

Reengineering is an essential tool to achieve ambitious supply chain goals. Other techniques that companies use to improve performance, from incremental improvement through reorganisation to restructuring, though valuable, do not have the power to create breakthrough results. Only reengineering can do that.

At first, some companies reengineering their supply chain thought it would be a one-time event, a radical treatment that would overcome decades of inertia and transform obsolete processes into ones suitable for a highly competitive world. Little did they suspect that reengineering would still be going strong well into the 21st century.

The hallmark of the modern age is constant change, and no sooner do companies finish one round of reengineering than they discover they must embark on another to respond to new challenges, capitalise on new technologies and cope with new circumstances. Far from being a thing of the past, reengineering is here to stay.

Albert Tan is Assistant Professor at the University of Wollongong in Dubai. He teaches courses in Supply Chain Management and Operations Management.