7:29 LTE a drive.google.com DF CUHK Medical Center.pdf Page 2 W25013 TRENDS IN HEALTH CARE LOGISTICS In mid-2019, it was widely predicted that the health care service industry would become increasingly digitized. Real-time data on drug usage and demand would allow manufacturers and distributors to streamline their supply chains and enhance efficiency. With such data, pharmaceutical companies could identify trends in treatment of the same illnesses for different patients, thus planning production with greater accuracy and enabling hospitals to better predict the demand for drugs, Cloud computing would support secure information exchange across borders and rapid data analysis. Digitalization could further enable prompt responses to changes in demand, and falling costs of tracking technologies would enhance reliability and safety in drug distribution." On the international scene, 3PL had become more popular for handling medical supplies among hospitals and clinics, while pharmaceutical companies were exploring the feasibility of sharing production and distribution capacities to lower capital expenditure and improve asset utilization. Another emerging trend was the integration of separate supply chains for pharmaceuticals, medical devices, and health care supplies into one streamlined delivery channel. with primary and secondary care providers such as hospitals or community care centres assuming a prominent role in defining service requirements. SUPPLY CHAIN MANAGEMENT OF HEALTH CARE IN HONG KONG " Northin College of Applied Arts and Technology taught by Shewhat Karit from $92023 9 0142023 Hong Kong's health care services were predominantly funded by the government, with the Hospital Authority (HA) managing 43 public hospitals out of a total of 55 hospitals in the city. There were altogether 40.434 hospital beds in the city, with 71 per cent of them located in HA institutions. The 12 private hospitals provided 4,657 beds, 12 per cent of the city's total capacity, The remaining 17 per cent was located in 65 nursing homes and 21 correctional institutions " In managing their supply chains, the hospitals of Hong Kong sought to provide their staff and patients with pharmaceuticals and consumables effectively and efficiently. The hospitals faced challenges with the cusice these panimeton is a cepysped violation designing and maintaining the integrity of supply chain workflow, forecasting the needs of users, keeping track of individual items to reduce loss, avoiding theft and spoilage, controlling delivery and storage costs. minimizing stock-out risks, and scheduling deliveries. HA had never engaged 3PL. providers, preferring to run its own internal supply chain processing. which handled delivery of over 200,000 items per day. Each of the 12 private hospitals also managed its own manual-based logistics system In the fiscal year ending March 30, 2018, HA managed 28 355 beds at an occupancy rate of 88.8 per cent." Annual procurement of pharmaceuticals amounted to HK$6.66 billion (US$854 million).' representing 10.4 per cent of HA's annual expenditure, medical consumables were $2.97 billion (US$381 million), representing 4.6 per cent of annual expenditure* At the end of fiscal year 2017-18, HA's total inventories amounted to over $1 34 billion (USS172 mallion), with 84 per cent of the inventories in pharmaceuticals and 14 per cent in medical consumables.' Every day, on average, HA's pharmacies served 56,000 patients, using up 234,000 items of over 1,600 stock-keeping units (SKUs), and the pharmacies made 845 purchase orders worth $36 million (US$4.6 million), dealing with 60 suppliers. HA's supply management unit had two tiers. At the head office level, five procurement teams, Authorized for we only it the course Supply Chain Manag specialized in different categories of supplies pharmaceutical, medical devices and supplies, services and laboratory supplies, nursing care, and operating theatre supplies-were responsible for formulating policies and guidelines, setting standards, providing tendering support, and managing supplier relationships." At the hospital level, the public hospitals were grouped into seven regional clusters, each of which had a procurement unit that managed a number of outpatient pharmacies. Each pharmacy managed its own inventory and activities, such as requisitioning orders, replenishing stock on hospital wards or in sub-stores, and controlling stock and storage control. Chui Ping Lee, a senior lecturer with the CUHK's School of Pharmacy, commented, "This approach demonstrates high efficiency in maintaining uniform practice standards across clusters and optimizes the utilization of expertise and resources. Meanwhile, it allows flexibility at the individual hospital pharmacy level, so that specialized services can be developed to cater to local clinical needs." Papo 3 W25013 As far as Fung knew, th Fare industry was Quality Healthcare Medical Service Cut CODEMS), a mines medical care ponder with 120 clinics across Hong Kong that specialis Page " 20 / 18 EndS outsourced its logistics to Bidder 1" on a vendor-m stock remained with the vendors until ordered by QHMS I OHMS Hime rider macoutical and medical consumables from any of its more t andus were routed through a single, off site warehouse, where Bidder I managed the packing and delivery to the clinics, took stock (manually), and managed + 117:29 LTE a drive.google.com CUHK Medical Center.pdf IVEY | Publishing CUHK W25013 CUHK MEDICAL CENTRE: ESTABLISHING A LOGISTICS SERVICES SYSTEM Wainas Chaurig Hong Fung, Hugh Thomas and Keith Chl He Wang wrote mis cage solely to provide material for clams Buticuddion, The sumcan do not intied to various wilbe arealive or ins' clive harding of a managing situation, The sottors mity have didguide cada names and offer identifying itfor than to protect could That publication may not be bandmined photocopied digitued or otherwise reproduced it any form or by any moare without the permission of my copyright bowen Reproduction of this maternal is not covered under sumnarration by my meproduction rights organization To order coping or request permission to pep oduce materials. contact ivey Publishing, Ivey Business School tat Northem College of Applied Arts and Technology bought by Shower Kamal from 59/2082 to WAR032 Wasfum University, London, Cuffario, Canada, NOG ONI, / 819 831.3208 fot crass@ ver ca www anycases.com Our goal a to poblet materials of the highest quality submit ary smite to publineatestwey ca Version: 209 1-08-34 Dr. Hong Fung, the chief executive officer of CUHK Medical Centre Lid. (CUMC) reviewed the analysis of tenders prepared by Jessie Lam, CUMC's chief hospital administrative officer. CUMC's tender board was meeting at the end of June 2019, and Fung needed to recommend to the board how the hospital's logistics services should be provided. The tender board, a body composed of senior faculty and administrators of the Chinese University of Hong Kong (CUHK), would most likely endorse Fung's recommendation, but not before they closely questioned him on the tender process, the analysis of the bids, and the reasons for his recommendation. Scheduled to commence services in 2021, CLIMC was to be the first private teaching hospital in Hong Kong wholly owned by a university. The new hospital's mission was to bring quality, affordable, and price-transparent, private health care to Hong Kong's citizens. CUMC would become the first smart hospital in Hong Kong with an electronic and paperless medical record system, mobile information and communication technology with real-time data would support patient journeys, and the management system would be fully integrated with the Internet of things (loT). Its logistics management needed traceability in the storage, transportation, and delivery of pharmaceutical supplies and medical consumables, each supported by a warehouse management system (WMS) and integrated into CUMC's enterprise resource planning (ERP) system to handle procurement, Starting over a year and a half earlier. Fung and his team had visited state-of-the art hospitals. interviewed potential logistics suppliers, visited their warehouses, hired a consultant, and invited third- Authortied for we only in the course Supply Chan Mar party service logistics (3PL) providers to bender. Fung hoped that the 3PL providers would supply off- and on-site warehouse storage, manage physical stock, and design and implement all the logistics- related information technology (IT) systems for pharmaceuticals and medical consumables more efficiently than CUMC could. The response to the invitation, however, had been disappointing Only six valid JPL beds had been received from four separate bidders, and none were fully compliant with the tender requirements. It was up to Fung to decide which bids, if any. to recommend Page 2 W25013 TRENDS IN HEALTH CARE LOGISTICS In mid-2019, it was widely predicted that the health care service industry would become increasingly digitized. Real-time data acturers and distributors to streamline their supply chat With grech doin, p accutical companies could identify trends in treatmnem greater accuracy and enable Page 18 planning production with 's Cloud computing would support secure information Digitalization could flarther mable prompt responses to cam tracking technologies would enhance reliability and safety in drug distribution + 11