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Business-Driven Approach for Healthcare Supply Chain Systems

Business

Nov 9, 2020 - 10 minutes read

1214 Healthcare Supply Chain 400X300
Objectivity Innovative leader in technologies

Our specialty is designing, delivering, and supporting IT solutions to help our clients succeed. We have an ethical framework that underpins everything we do. Our underlying philosophy is that every client engagement should result in a Win-Win and this is supported by our four values: People, Integrity, Excellence, and Agility. Our clients are at the heart of our business and we are proud to form long-lasting working relationships, the longest of which is 29 years. Our goal is to continue to grow our business whilst remaining true to the ethical framework and values on which we are founded.

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Today’s world, as we know it, is organised in a specific way. Unfortunately, certain events may have a strong impact on many different areas of our lives. The worldwide COVID-19 pandemic has revealed numerous weaknesses in multiple business sectors.

We all know that business these days strongly relies on the technical solutions that are at the basis of many products and services. We’ve learned that reacting to such events after they occur isn’t good enough. Acting proactively and following the rule: “Pray for the best, prepare for the worst, and expect the unexpected”, may prevent worldwide crises in the future. Technical solutions are here to help us operate efficiently and be better prepared for future uncertainties. With that in mind, let’s have a closer look at the healthcare supply chain.

Supply Chains in Healthcare

A healthcare supply chain can be viewed from two different angles:

  • The perspective of healthcare organisations (HCOs) like hospitals or infirmaries.
  • The perspective of medication and equipment providers.

HCOs require a sustainable supply chain which is ready to respond to their unexpected requirements and follow their tight schedules driven by numerous factors. Such factors as patients’ conditions and needs, drug expiration dates, treatment plans or drug storage conditions. On the other end, there are medical providers who need to secure the availability of the medicine, which effectively means they need to establish an efficient supply chain for the necessary components.
Let’s imagine that scientists have finally invented a vaccine for COVID-19. How difficult would it be to manufacture and deliver it worldwide? Would it even be possible? According to the chair of the UK vaccine task force, just in the UK, around 30 million people will have to be vaccinated. Hence, while designing and constructing your IT system, you have to make sure that it won’t create technical limitations, but will instead boost the entire delivery process.

The diagram below presents an example of a supply chain for a healthcare organisation.

an example of a supply chain for a healthcare organisation

Business First Approach in Supply Chain Management

We build IT systems to support business operations. Therefore, the first stage of the project is not technical at all. We recommend starting with a discovery phase which lets the technical team members understand the business problems and challenges. Having a clear idea of the needs of all the people who will interact with the system is an important step. Such an approach applies to healthcare specialists, staff in charge of processing orders, people responsible for the production and every other party that may be involved in the process.

At this point in the project, certain key questions concerning the roles of the healthcare specialists should be answered:

  • What are their tasks?
  • What’s the environment they work on?
  • What’s important to them?
  • How to make their work efficient and free of obstacles?
  • What are their biggest challenges today?

It’s crucial to take an approach where the technical solutions address business problems. To achieve this, the healthcare software must be built to fit the business, and never the other way round. It’s extremely important to always follow this approach, but at the same time, it’s very easy to deviate from it.

The distortion of the business goal can be caused by many factors, such as:

  • Letting the technical team drive and affect business requirements.
  • Selecting overcomplicated tools and solutions to solve business problems.
  • Investing too much effort into the enterprise-class technical solutions early in the project.
  • The lack of proper feature prioritisation and the definition of a Minimum Viable Product (MVP).

Unfortunately, such a distortion strongly affects the ability of the business to adapt to any unexpected situations which may occur. The gathering of business domain knowledge and building a domain-specific vocabulary is a crucial part of the software creation process. It simplifies communication with the business stakeholders and increases the productivity of the entire project.

It’s also important to be aware that the process of software development doesn’t end when the technical work is done. When estimating the cost of the project, the investor has to include certain hidden expenses like:

  • Licensing
  • Training
  • Data migration
  • System monitoring
  • System maintainability

Very often, rolling out the new system to production is the most challenging part of the project. However, if that step is thought-through and taken into consideration at an early stage of the project, it’s often possible to deliver the new system with zero-downtime, which is a key goal. If there’s a possibility of launching a new supply chain without interrupting care delivery, this should definitely be one of the project’s objectives.

Apart from the above, there might be a need to introduce a process which controls the way in which the software changes are enrolled to production. That’s related to the specifics of the goods that are produced in a pharmaceutical manufacturing plant. The responsibility level is very high as the interactions between software and employees result in medications that are later given to patients. In this case, having a control process in place helps to ensure that the recently implemented changes don’t have unexpected side effects.

Implementation

The IT ecosystem should be designed in a modular manner. Each part of the system should contain a limited amount of functionality and it should fulfil the well-scoped requirements. The modularity of the IT ecosystem brings a lot of advantages to the business, for example:

  • Reducing the cost of maintenance.
  • Adding flexibility when introducing future changes.
  • Increasing the reliability of the entire system.
  • Increasing the availability when promoting changes to production systems.
  • Increasing the efficiency of turnaround time.

The modularity of the system can often be achieved by implementing microservices.

The implementation of an IT ecosystem also has to be viewed from two different angles, because the two perspectives simply have very different needs and expectations.

The Healthcare Organisation Perspective

When considering the HCO’s perspective, it’s crucial for the IT ecosystem to focus on availability, security, and reliability with near real-time data accessibility and integration. This allows the HCO’s end users to operate in-line with up-to-date information regarding, amongst others, the availability of drugs and the history of a given patient's treatment.

The key elements of the ecosystem for the HCO’s employees are presented in the diagram below:

The key elements of the ecosystem for the HCO’s employees - diagram

Ordering System

The ordering system allows the healthcare staff members to order specific drugs and equipment based on real-time availability. Such a system should be separated from the manufacturing process and has to be large enough to meet the organisation’s needs. However, it should be as small as possible, so the number of potential issues is reduced.

The ordering part of the ecosystem should be as portable as possible, so it doesn’t hold back any HCO organisational changes. Moreover, it should be accessible from various sorts of devices.

Patient Data System

The ordering system should be integrated with the central patient data source (e.g. in the UK, this kind of system is usually called an Electronic Health Record (EHR)). This way, we can ensure that the necessary patient context is available to support the decision-making process. In the healthcare domain, access to the latest information is crucial, as it can help clinicians amend decisions regarding treatment.

Order Monitoring System

Once the order is confirmed inside the system, it should be tracked. This way, we can monitor the progress and immediately notify the owner in case of any unexpected issues in the production or dispatch process.

The order status should be delivered with technical tools that provide high reliability. The cloud queueing systems can be considered for that purpose, due to their asynchronous processing capabilities. We would recommend working with a cloud provider, as the data on the queues is guaranteed to be safely stored and delivered. Moreover, a solution like this is flexible and allows for building receivers of the notifications on a variety of different systems and devices.

The Medication and Equipment Provider Perspective

The manufacturing system is a key component from the pharmaceutical provider’s perspective of the supply chain management. To make sure that the production branches are able to cover the demand coming from HCOs, the providers have to maintain an appropriate stock level. In this case, appropriate means that the demand is met and the losses caused by expiration periods are optimised/limited. This challenge can be addressed by making the production system just a component of a bigger solution.

The medication and equipment providers should utilise components shown in the diagram below:

The medication and equipment providers - diagram

Manufacturing System

The Manufacturing System handles the incoming orders created by the HCO’s employees. Depending on the type of order, it can either be collected directly from a shelf or fridge and sent to another component for dispatch, or it may need to go through the production process first.

The system should also control the production flows and the procedures used in the manufacturing process. Usually, such an application is required to store a full history of the changes that applied to every order, for future audit purposes.

In some organisations, there is a various set of manufacturing devices that can be integrated with a system. The technical solution shouldn’t be a limitation for any devices that could smooth out and speed up the manufacturing process.

Warehouse System

The production system has to retrieve the stock levels from the ERP class system. This ensures that the production system can be focused on the production itself, not on the stock level management. Besides, there is a need to support interoperability. There has to be the possibility of assigning the order to another production location at any time so that, in case of unforeseen errors or issues, the order can still be delivered on time to the HCO. The allocation components, like a pure warehousing system, are commonly used also outside the healthcare domain. They should employ AI and Machine Learning to support the production planning team by predicting the demand for specific components in time. Additionally, the allocation components should offer manual calibration of allocation parameters to ensure that they’re flexible enough to support business actions during any unexpected circumstances, like for example the COVID-19 crisis.

Financial System

Like many other businesses, companies that produce pharmaceuticals have to manage losses and earnings. The cost can be understood as a price a company must pay to get the raw materials on site and manufacture the products. Earnings are the money that’s received when produced items are being sold to the end customers. No business can be driven without a clear indication of financial balance, and companies should use the benefits of the existing IT components that are capable of handling financial operations. The already mentioned ERP systems are a perfect example of that.

Wastages of raw materials in the manufacturing plants are a big part of the financial equation. Let's not forget about monitoring the wastages to improve the organisation’s internal processes to decrease the potential losses in the production process.

Reporting System

Apart from the already mentioned production system and ERP class system, the supply chain should be supported by reporting services. This way, the drug providers can get insight into the performance, accuracy, and reliability of the supply chain. Hence, the IT ecosystem should also include a BI reporting system which would make this insight understandable and actionable. The key data from the ERP and production component has to be available for the reports to be generated. We recommend using BI systems like Tableau BI or Power BI. The reporting system needs to be implemented in a way that doesn’t affect production databases. For large data sets, data warehousing should be considered.

User Management System

In order to operate, a manufacturing system usually needs some sort of user management system that handles employees and/or customers. There are multiple ready-to-use technical solutions such as Identity Providers (on-premises or cloud-based) to deliver this functionality with a minimal cost. We’ve implemented integrations like this using the OpenIdConnect protocol in our projects.

Dispatch and Delivery System

It’s the part of the IT ecosystem responsible for dealing with the delivery of products that have been manufactured. This normally involves integrating with delivery companies’ systems.

Monitoring System

In modular, microservice-oriented architectures, monitoring is key to maintain reliability and availability of the entire ecosystem. Luckily, there are tools that provide useful dashboards and alerting features. Examples of these tools include Graylog, Splunk, and TICK Stack. They have the capability to deliver both technical and business metrics.

Summary

Having a sustainable, component-based IT ecosystem built with attention to the availability, scalability and reliability is a key aspect of making the healthcare supply chain management effective and productive. It’s the best way to enable it to work with limited downtime and ensure that orders meet the agreed SLAs. In the healthcare industry, SLAs may affect the success of the patient’s treatment. Even if the production system seems to be hidden away from the end customer at the HCO, its failures and problems will likely affect the entire supply chain. Therefore, they’ll also have an impact on the end customers’ business. In this case, it may result in the inability to provide the necessary medication to a patient.

Both sides can benefit from understanding their perspectives on the process and tailoring the supply system according to their needs. As an effect, HCOs will be continuously provided with the necessary pharmaceuticals. The deliveries will happen on time and in the volumes that match demands. Whereas drug suppliers won't lose their money on wastage of raw materials.

The approach to the IT ecosystem that we described in this article is applicable to organisations of various sizes. Depending on the needs, some of the components may be present from the start, and others can be delivered in phases. The approach has already been implemented in a worldwide healthcare-related organisation and it’s successfully fulfilling their global needs.

We can’t see the future and we can’t predict another situation like the COVID-19 pandemic, but we can prepare our business and our systems to be more capable of handling such an impact. Building a proper IT ecosystem is often seen as a cost but it should instead be seen as an investment into overcoming future challenges.

About the Authors

Kamil Stachowiak
Team Leader Solution Architect

A domain-centric Solution Architect, who views technology as a tool to bring the business value. A proud practitioner of Domain-Driven Design methodologies in his day-to-day work. He’s always looking for bridges between business and tech specialists.

Tomasz Krasnodebski
Programme Business Analyst

An open-minded Business Analyst, always striving to understand the big picture and deliver the services and software that allows the business to grow and maximise the business value.

Data Driven Organisation Blog Ebook 416X300
Objectivity Innovative leader in technologies

Our specialty is designing, delivering, and supporting IT solutions to help our clients succeed. We have an ethical framework that underpins everything we do. Our underlying philosophy is that every client engagement should result in a Win-Win and this is supported by our four values: People, Integrity, Excellence, and Agility. Our clients are at the heart of our business and we are proud to form long-lasting working relationships, the longest of which is 29 years. Our goal is to continue to grow our business whilst remaining true to the ethical framework and values on which we are founded.

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