Developing a Strategic Competitive Advantage Eugene S. Schneller (School of Health Administration and Policy at W. P. Carey School of Business)

This research is funded by the National Science Foundation under the auspices of the Center for Health Management Research. This research is analyzing the supply chain within health care with the primary focus being on hospitals and IDNs. Progressive practices will be identified and described as they related to four general areas: (1) information technology and flow, (2) organizational dynamics including physician relationships, leadership and culture, (3) metrics including cost measures and (4) supply chain relationships among providers, manufacturers, GPOs and distributors.

To extend the recent supply chain management research funded by the Center for Health Management Research (CHMR) and develop specific implementation guidelines, four research questions will be addressed.

Research Question One: What are the characteristics of the more progressive hospital and Integrated Delivery Networks’ (IDNs) supply chains.

Research Question Two: What conditions pre-disposed these organizations to have leading-edge supply chain structures and practices?

Research Question Three: What are the enablers and barriers to progressive supply chain management practices in hospitals and IDNs?

Research Question Four: What progressive supply chain practices can hospitals and IDNs managers use from leading practices in manufacturing and retail supply chains?

These research questions will first be addressed by means of a Delphi process to identify health care providers with progressive supply chain practices. This will be followed by in-depth case studies of approximately 12 hospitals or IDNs to determine the enablers and barriers to these progressive practices. During the case studies, five general characteristics will be investigated: product differences, market conditions, organizations characteristics, environmental conditions and supply chain variables.

In addition to the case studies, supply chains from manufacturing and retail industries will be compared and contrasted to hospital and IDNs’ supply chains. The results will enable health care managers to determine if effective supply chain practices from other industries are functional in health care and how they can be implemented. Emphasis will be placed on such practices as e-Commerce, total cost of ownership and alliance formation.

R. Lawton Burns will serve as a consultant to the primary researchers to maximize the opportunity to extend the previous research on health care value chains funded by CHMR. In addition, an advisory team of cross functional high level administrators from CHMR member systems will serve as a management advisory team. Finally, a team of five researchers and consultants will provided assistance as research advisors to assure that all perspectives of the supply chain are investigated and the results can be immediately implemented by member systems. To complete the research in a timely manner, Dr.Larry Smetlzer will take a leave from Arizona State University beginning in November 2002 and complete the research by June 30, 2003.

The research will result in a written report discussing each of the case studies as well as a set of guidelines and a model for implementing progressive supply chain practices in hospitals and IDNs.In addition, a two-day management symposium will discuss these practices in depth.