Supply Chain Maturity in Healthcare: Achieving Best Practices with SCOR-based Models

Supply chain management is a crucial component of healthcare operations, and it is taking on more significance as the sector deals with issues like rising costs, more stringent regulations, a clear strategy for advancing telemedicine, and a consequent shift in patient expectations. Healthcare organizations must be able to efficiently manage their supply chains and continuously enhance their operations if they are to meet these challenges. Following ample evidence from other industries, one way to achieve this is by using maturity models based on the Supply Chain Operations Reference (SCOR) framework and using them to evaluate and improve supply chain management processes by providing a common language and structure for describing, analyzing, and improving supply chain operations.

This article will explore the use of maturity models based on SCOR in healthcare. It will go over the advantages that these models can offer, including increased effectiveness, cost savings, and improved decision-making. The article will also provide examples of healthcare organizations that have successfully implemented SCOR-based maturity models and discuss some of the challenges that organizations may face during the implementation process. The article will also offer advice on how healthcare institutions can modify the SCOR framework to suit their particular requirements and achieve best practices in supply chain management.

Supply chain management has emerged as a crucial component of healthcare operations in the modern, fast-paced healthcare sector. Healthcare organizations must be able to successfully manage their supply chains and constantly enhance their operations due to the mounting pressure to control costs, adhere to regulations, and satisfy the ever-changing needs of patients. Utilizing maturity models based on the Supply Chain Operations Reference (SCOR) framework is one way to accomplish this.

What is SCOR?

SCOR is a widely recognized framework for evaluating and improving supply chain management processes. Developed and maintained by the Supply Chain Council (SCC), it provides a common language and structure for describing, analyzing, and improving supply chain operations. The framework is divided into two levels of processes. Level-0 processes are strategic, and SCOR defines orchestrate as the only Level-0 process. Level-1 processes are influenced by the orchestrate process and have been defined as the following six categories of processes: plan, order, source, transform, fulfill, and return. The framework offers a thorough methodology for examining and enhancing the various distinct processes that fall under each category. Each Level-2 process contains elements from a Level-3 process, and each Level-1 process takes into account three or more Level-2 processes. This provides a very structured analysis of supply chain operations.

SCOR is acknowledged as a leading framework for supply chain management and has gained widespread adoption in sectors like manufacturing and retail.

SCOR model as proposed by the ASCM

The SCOR DS framework seeks to help supply chains by assisting them in resolving operational issues and enhancing performance. This objective will be accomplished by SCOR using four main strategies.

However, the healthcare supply chain is intricate and special, posing a number of particular difficulties like legal requirements, product expiration dates, and the requirement to handle vast amounts of private data. The healthcare supply chain also includes a variety of other actors, including hospitals, health systems, manufacturers and distributors of medical devices, insurance providers, and governmental organizations. These actors have different needs, goals, and expectations, and it requires a different approach for proper and efficient supply chain management. As a result, healthcare organizations might need to modify the SCOR framework to suit their unique requirements.

Healthcare organizations may benefit from a structured method for assessing and improving their supply chain operations by using SCOR-based maturity models. By assessing their current level of maturity and identifying areas for improvement, organizations can set clear goals and objectives for their supply chain operations and develop a roadmap for achieving best practices. These maturity models can also help healthcare organizations benchmark their performance against industry standards and identify areas where they can achieve cost savings and improve efficiency.

The SCOR framework was created to assist supply chains in resolving operational problems and improving performance through the application of four key methods.

1. PROCESSES: The first is to aim for continuous supply chain improvement by carefully analyzing, mapping, and determining whether business processes and activities make sense. This means that when they are measured, they perform according to predefined expectations.
2. PERFOMANCE: The second method involves benchmarking like-for-like measures and comparing supply chain performance to that of other supply chains at all levels. Supply chains can identify performance gaps and plan strategies to surpass competitive performance by benchmarking performance.
3. PRACTICES: The third method is to assess current supply chain procedures and identify all procedures and technological advancements that significantly improve performance. SCOR offers a simple analytical framework for determining whether the current supply chain is competitive with others.
4. PEOPLE: The final method is to create performance-driven organizations that engage in ongoing learning and skill development.

What is a maturity model?

A maturity model (MM) is a framework for analyzing and optimizing supply chain management procedures. It can be based on the SCOR framework, a well-known supply chain management model. A MM offers a methodical way to evaluate a business's current state of supply chain operations maturity and pinpoint areas that require development.

Each stage or level of an MM typically corresponds to a different level of supply chain management maturity. An MM, for instance, might have stages like basic, managed, optimized, integrated, and innovative. To be considered at a given level of maturity, certain requirements for that level must be satisfied. For instance, a company might only have a few systems in place for managing inventory and logistics at the basic level, but at the innovative level, they might have adopted cutting-edge technologies like blockchain, IoT, and AI to streamline logistics processes.

AnMMis used to assist organizations in identifying areas for improvement in their supply chain operations and creating a strategy for implementing best practices. By assessing their current level of maturity, organizations can set clear goals and objectives for their supply chain operations and develop a roadmap for achieving best practices. Organizations can use SCOR maturity models to benchmark their performance against industry norms and find opportunities for cost- and efficiency-saving measures.

What specifically would each MM expect?

Based on the SCOR methodology, the following is a proposed MM for supply chain and logistics strategy in healthcare:

Level 1: Basic

• At this level, the healthcare organization is primarily focused on managing day-to-day operations with little to no strategic planning or coordination.
• There may be limited systems in place to track and manage inventory and logistics, and they are likely to be manual and disconnected.
• The organization is likely reactive rather than proactive in addressing supply chain and logistics issues, resulting in inefficiencies and potential stock-outs.

Level 2: Managed

• At this level, the healthcare organization begins to implement more formal systems and processes for managing supply chain and logistics.
• Inventory management systems are put in place, and there is improved coordination and communication between departments.
• The organization begins to focus on cost control and improving efficiency in supply chain and logistics operations.

Level 3: Optimized

• At this level, the healthcare organization has mature systems and processes in place for managing supply chain and logistics.
• There is a strong focus on data analysis and using this information to make strategic decisions.
• The organization has implemented a formal process for supplier management, which includes supplier evaluation and performance measurement.
• There is a high level of coordination and collaboration between departments, and the organization is able to quickly respond to changes in demand.
• The organization has implemented initiatives such as Lean or Six Sigma to optimize logistics operations.

Level 4: Integrated

• At this level, the healthcare organization has fully integrated supply chain and logistics operations with the overall strategic goals of the organization.
• There is a high level of collaboration and integration with external partners and suppliers.
• The organization is able to leverage technology to optimize logistics operations and make data-driven decisions.
• The organization has implemented advanced analytics, such as predictive analytics, to anticipate and respond to changes in demand.

Level 5: Innovative

• At this level, the healthcare organization is a leader in supply chain and logistics strategy and is continually looking for ways to improve and innovate.
• The organization has implemented cutting-edge technologies such as blockchain, IoT, and AI to optimize logistics operations.
• The organization has implemented sustainability initiatives in the supply chain and logistics operations.
• The organization is able to anticipate and respond to disruptions in the supply chain, such as pandemics or natural disasters.

It’s important to note that not all healthcare organizations will reach level 5, but it’s a good reference point to aim for. Also, this MM is a general one that can be tailored to specific healthcare organizations' needs.

Are there examples of SCOR MMs used in Healthcare?

The use of maturity models is relatively widespread in the healthcare industry, despite being less common than in some other sectors. The healthcare supply chain is intricate and distinct, and it faces many particular difficulties like legal requirements, product expiration dates, and the need to handle vast amounts of private data.

SCOR can be useful for healthcare organizations because it provides a common language and framework for describing, analyzing, and improving supply chain operations. It can also provide a benchmark for performance and a roadmap for improvement. However, it’s important to remember that the healthcare supply chain is complex and unique, and organizations may need to tailor the framework to meet their specific needs.

A recent study looked into MMs that have been used in healthcare. In particular, it identified 68 different MMs with significant practical implications for (a) identifying problems and offering suggestions for improvement in health care contexts and (b) enhancing effectiveness, performance, efficiency, and productivity.

Aspects proposed in MM implemented in Healthcare (Source)

As shown in the above figure, most of the MM implemented were related to the use and development of technology, business processes, or people in healthcare, with other aspects such as work culture, strategy, governance, leadership, interoperability, and data. The full detail of models indetified in this study can be accessed here.

Starting the implementation process

It is necessary to have a clear understanding of the organization's goals and objectives as well as a well-thought-out plan for achieving them in order to implement a maturity model in a healthcare organization. Some of the key strategic requirements for implementing a maturity model include:

• Executive support: It is important to have buy-in and support from the organization’s leadership team, as they will play a critical role in driving the initiative forward and allocating the necessary resources.
• Clear goals and objectives: The organization should have a clear understanding of what it wants to achieve through the maturity model, and the goals and objectives should be aligned with the overall strategic direction of the organization.
• Process and technology focus: The maturity model should be focused on specific processes and technology areas that the organization wants to improve, and should be tailored to the specific needs of the organization.
• Metrics and measurement: The maturity model should be based on clear criteria and metrics that allow the organization to evaluate the current level of maturity and track progress over time.
• Continuous improvement: The maturity model should be viewed as a continuous process of improvement, rather than a one-time initiative. The organization should regularly review and adjust the plan as needed to ensure that it is on track to achieve its goals.
• Communication and engagement: It is important to communicate the progress and results of the maturity model to all stakeholders, including staff, management, and external partners, to ensure buy-in and support for the initiative.

Once these strategic requirements are in place, a MM can be implemented by following these steps:

1. Identify the specific processes and technology areas that the organization wants to improve, such as patient registration, electronic medical record (EMR) systems, or revenue cycle management.
2. Develop a set of criteria or metrics to evaluate the current level of maturity for each process or technology area. These criteria should be based on industry best practices and standards, and should be tailored to the specific needs of the organization.
3. Assess the current level of maturity for each process or technology area using the established criteria. This can be done through self-assessments, surveys, or interviews with staff and stakeholders.
4. Develop a plan for improving the maturity of each process or technology area. This plan should include specific goals, timelines, and a list of activities and resources needed to achieve those goals.
5. Implement the plan and track progress. Regularly review the progress and make adjustments as needed to ensure that the organization is on track to achieve its goals.
6. Continuously monitor and evaluate the maturity level of the processes and technology, and adjust the plan as needed to maintain a high level of maturity.
7. Communicate the progress and results of the maturity model to all stakeholders, including staff, management, and external partners, to ensure buy-in and support for the initiative.

References

Kolukısa Tarhan, A., Garousi, V., Turetken, O., Söylemez, M., & Garossi, S. (2020). Maturity assessment and maturity models in health care: A multivocal literature review. Digital health, 6, 2055207620914772.