Video Case: Arnold Palmer Hospital’s Supply Chain
Arnold Palmer Hospital, one of the nation’s top hospitals dedicated to serving women and children, is a large business with over 2,000 employees working in a 431-bed facility totaling 676,000 square feet in Orlando, Florida. Like many other hospitals, and other companies, Arnold Palmer Hospital had been a long-time member of a large buying group, one servicing 900 members. But the group did have a few limitations (Heizer & Render, 2011). For example, it might change suppliers for a particular product every year (based on a new lower-cost bidder) or stock only a product that was not familiar to the physicians at Arnold Palmer Hospital. The buying group was also not able to negotiate contracts with local manufacturers to secure the best pricing (p. 411). Effective supply-chain management in manufacturing often focuses on development of new product innovations and efficiency through buyer/vendor collaboration. However, the approach in a service industry has a slightly different emphasis. How does this supply chain differ from that of a manufacturing firm? Manufacturing firms focus on development of new product innovations and efficiency and at Arnold Palmer Hospital, they focus on supply chain innovation and accomplishing service and their economic goals (Heizer & Render, 2011). What are the constraints on making decisions based on economics alone at Arnold Palmer Hospital? The vendors were buying products that the staff did not necessarily prefer and the vendor cancelled some of the products that the medical staff found useful in the hospital. They would change suppliers for a particular product every year. The buying group was not able to negotiate contracts with local manufacturers to secure the best pricing (p. 412). What role do doctors and nurses play in supply chain decisions in a hospital? How is this participation handled at Arnold Palmer Hospital? Doctors and nurses usually...
References: Heizer, Jay H., and Barry Render. Principles of Operations Management. Boston: Pearson Education, 2011. Print.
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