Production and Operations Management

MBA (Division-A)

Group Assignment

On

“Healthcare Supply Chain”

Submitted by: Group No. 5

Sameet Dhedhi (2038)

Appa Vatsal (2004)

Rohan Khurana (2028)

Lakshya matalia (2010)

Makwana Nihal (2023)

Submitted to: Prof. Jitendra Nenavani

Som-Lalit Institute of Management Studies

Date of Submission: 13 June, 2022

Table of Contents
1. Introduction of industry ............................................................................................................... 1
1.1 Market Size .................................................................................................................................. 2
1.2 Road ahead .................................................................................................................................. 2
1.3 Current Trend of healthcare industry ................................................................................ 3
2. Introduction of topic ..................................................................................................................... 5
3. Literature Review ......................................................................................................................... 7
3.1 The Ailing Healthcare Supply Chain: A Prescription for Change ......................................... 7
3.2 Paradigm of IoT .......................................................................................................................... 7
3.3 The application of Kano model in the healthcare industry ..................................................... 8
3.4 Application of artificial intelligence-based technologies in the healthcare industry ............ 8
3.5 Wearable device implications in the healthcare industry ....................................................... 9
3.6 Data mining in healthcare .......................................................................................................... 9
3.7 Big Data for Healthcare Industry 4.0 ...................................................................................... 10
3.8 Hidden big data analytics issues in the healthcare industry ................................................. 10
3.9 Supplier selection criteria in the healthcare industry ............................................................ 11
3.10 Management issues in the pharmaceutical industry ............................................................ 11
4. Challenges & opportunities ........................................................................................................ 12
5. Bibliography ................................................................................................................................ 14
1. Introduction of industry

Healthcare has become one of India’s largest sectors, both in terms of revenue and
employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing,
telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare
sector is growing at a brisk pace due to its strengthening coverage, services and increasing
expenditure by public as well private players.

India’s healthcare delivery system is categorised into two major components public and private.
The government, i.e., public healthcare system, comprises limited secondary and tertiary care
institutions in key cities and focuses on providing basic healthcare facilities in the form of
primary healthcare centres (PHCs) in rural areas. The private sector provides majority of
secondary, tertiary, and quaternary care institutions with major concentration in metros and
tier-I and tier-II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals. India
is also cost competitive compared to its peers in Asia and Western countries. The cost of
surgery in India is about one-tenth of that in the US or Western Europe.

As of March 21, 2022, more than 181.52 crore COVID-19 vaccine doses have been
administered across the country.

India's healthcare system is divided into two main components: public and
private. Government, i.e., H. The public health system focuses on providing
basic health facilities in the form of primary health centres (PHCs) in rural areas, including
secondary and tertiary health facilities limited to major cities. The private sector
provides most of the secondary, tertiary, and quaternary healthcare facilities that are primarily
concentrated in metropolitan areas and Tier I and Tier II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals. India
is also cost competitive compared to Asian and Western European countries. The cost of
surgery in India is about one-tenth that in the United States or Western Europe.

As of March 21, 2022, more than 181.52 million COVID19 vaccines have been
administered nationwide.

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1.1 Market Size

India's healthcare sector is expected to triple and grow at a CAGR of 22% between 2016 and
2022, reaching $ 371.9 billion in 2022 from $ 110 billion in 2016 to 349.1 billion. Reach the
dollar.

As of 2021, India's healthcare sector is one of the largest employers in India, with a total of 4.7
million people employed. The sector created 2.7 million additional jobs in India during
201722, creating more than 500,000 new jobs annually.

According to the 2022 economic survey, India's public health spending was 2.1% of GDP
in 2021, 1.8% in 20221 and 1.3% in 201920.

The increase in the middle class, coupled with the increased burden of new illnesses, is
driving the demand for health insurance coverage. With the growing demand for affordable,
high-quality health care, health insurance penetration will increase over the next few years. In
2009, the total amount of direct insurance premiums of health insurance companies increased
by 13.3% from the previous year to rupees. 58,572.46 million dollars (7.9 billion dollars). The
health segment accounts for 29.5% of the total premiums earned in the country.

India's medical tourism market is valued at US $ 2.89 billion in 2020 and is expected to
reach US $ 13.42 billion by 2026 in India in 2019. India was ranked 10th out of 46 destinations
by the Medical Tourism Association in the 2020 Medical Tourism Index (MTI) 21.
The eHealth market is estimated to be US $ 10.6 billion by 2025. As of January 2022, the
number of medical colleges in India was 595.

According to information provided by Minister of Health and Family Welfare Lok Sabha, Dr.
Bharati Pravin Pawar, the national physician population ratio is 1: 854, assuming 80%
availability of 12.68 lakh registered allopathic doctors and 5.65 lakh AYUSH doctors.

1.2 Road ahead

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India is a country full of opportunities for players in the medical technology industry. The
country has also become one of the major destinations for high-end diagnostic services due to
its huge capital investment in advanced diagnostic facilities that serve more
segments of the population. Also, consumers of medical services in India are
becoming more aware of their medical needs.

India's healthcare sector is highly diversified and there are many opportunities
in each segment, including providers, payers and healthcare technologies. As competition
intensifies, companies are looking for the latest dynamics and trends that will have a positive
impact on their business. The Indian hospital industry is expected to rise to the rupee. From 4
trillion rupees (US $ 61.79 billion) in 2017 to 8.6 trillion (US $ 132.84 billion) by 2010,
the CAGR was16-17%.

The Government of India plans to increase public health spending to 2.5% of national GDP by
2025. India's competitive advantage is also in improving the success rate of Indian companies
in obtaining ANDA (New Drug Application) approval. India also
offers tremendous opportunities in R & D and medical tourism.

1.3 Current Trend of healthcare industry

Getting Social is advancing it's true that this industry is far behind other industries
in this respect, but there are some big advantages to catch up with. Not only are healthcare
providers and brands becoming more active on social channels, but 60% of doctors report that
social media helps improve the quality of care, and organizations reach the community. We
are also starting to use the tools to do this.

Small things can have a big impact on your overall health. Therefore, if an organization can
reach out to people at their level, take the medicine properly, and make sure they
are eating healthy, everyone wins.

Do you remember the old days when you had to wait an hour for your doctor to meet you?
They will appear 10 minutes early due to your 12 pm appointment and will wait until
12:45 pm before they put you in the room. It may not always be the case, but it used to be

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more standard than it is now.

Today's healthcare is more consumer-centric than ever. Patients can compare doctors and
hospitals as easily as browsing restaurants on Yelp. This trend has made everyone in the
industry excited about the game.

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2. Introduction of topic

In the age of competition, no industry can survive without pondering much about reducing
expenditures wherever possible. The same is true for health care industry, which is witnessing
sharp rise in price in almost all its products and services. The alarmingly high pace of upward
movement of cost is making the produce of the industry beyond the reach of the mass. Supply
chain in this industry being a significant driver of cost is therefore grabbing all the attention
from industry stakeholders.

This study focuses on discussing the basic nature and components of supply chain of health
care industry with considerable attention on future scopes along with present trends. The supply
chain in this industry is believed to be inherently complex and as a result it is quite a tough task
to recognize any magic button that will help remove the inefficiencies to drive down costs. As
part of the research for this paper we have done extensive studies of literatures and tried to gain
insight on the complexity of health care supply chain management (SCM). The current trend
shows that the industry struggles to meet on-time delivery. The major drawback remains in the
fact that each part of the supply chain works independently, creating misaligned activities that
prevents it from working as a system. We have also analysed the health care supply chain in
Malaysia to have a better understanding of the current scenario in developing countries. The
literature review throws light on issues like redesigning of inventory management systems in
hospitals, aggregation of suppliers and their products through electronic catalogues, use of ERP
system to address another bottleneck in the supply chain, namely: inefficient information flow
in the system.

Finally, the paper addresses certain new strategies emerging in the sector that are contributing
towards efficient SCM practices. They are: RFID, Supply Utilization Management, Virtual
Centralization of the Supply Chain and Vendor Managed Inventory. The RFID helps attaining
inventory visibility and accurate counts at every stage of the supply chain and also helps
reducing shrinkage and shipping errors. Supply Utilization Management helps reducing
wastages, value mismatch and misuse through standardization and proper specification. Virtual
centralization of the supply chain on the other hand helps improving level of cooperation in
hospitals thereby helping them controlling costs and improving services. How virtual
centralization works is explained with the help of an example of

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CSC: this is jointly owned and managed by multiple hospitals and healthcare units. CSC brings
together geographically dispersed healthcare units together and allows them to work together
to attain maximum efficiencies in procurement, contracting and customer service.

Presently hospitals are looking for new sources of competitive advantage and cost cutting
measures wherever possible. It is imperative to look into the supply chain management aspects
and identify areas in which they can improve the quality of service for efficient patient care.
Supply Chain Management in healthcare should ensure complete endto-end visibility of
information among suppliers, manufacturers, distributors and customers.

The healthcare supply chain involves the flow of many different product types and the
participation of several stakeholders. The main purpose of the healthcare supply chain is to
deliver products in a timely manner, in order to fulfil the needs of providers. Based on their
functions, stakeholders in the healthcare supply chain.

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3. Literature Review

3.1 The Ailing Healthcare Supply Chain: A Prescription for Change

Despite well-documented evidence of significant competitive advantage and cost reduction
resulting from supply chain management (SCM) practices, the healthcare industry has been
extremely slow to embrace these practices. This article, through literature review and case
studies within the healthcare industry supply chain, explores the barriers to implementation of
SCM practices. These barriers include: lack of executive support; misaligned or conflicting
incentives; need for data collection and performance measurement; limited education on supply
chain; and inconsistent relationships with group purchasing organizations and other supply
chain partners. Practical recommendations are made for hospitals and supply chain partners
struggling to implement workable SCM solutions. (Arshia Kaul, Anindo Bhattacharjee, 2022)

3.2 Paradigm of IoT

Health informatics and telematics have been drastically influenced by big data of IoT devices.
In this paper, we conducted a review of scientific literature and mapping of research trends on
IoT Big Data Analytics paradigm (IoT BDA) in healthcare industry. The goal is to identify
how the IoT BDA paradigm has impacted the design, development, and application of IoT
based innovations in healthcare services. We conducted a qualitative and quantitative review
of 46 papers on IoT BDA, and a quantitative review of 84 papers on fog computing in the
healthcare industry. This study shows that IoT BDA has impacted the acquisition, storage,
retrieval, and use of information in healthcare industry. Consequently, three derivers of IoT
BDA convergence are identified. The first driver is computing; which is emerged as a response
to reduce data congestion and inefficiencies of emergency systems. As the co-word analysis
shows, issues such as security, privacy and data transfer are dominant scientific topics within
the domain of fog computing. The second driver of convergence is the storage of IoT big data.
This has led the researchers to classify IoT data to critical and non-critical data; while the
critical data is sent to fog systems; non-critical data is sent to centralized cloud systems. The
third driver of convergence is data abstraction. The study shows that IoT BDA has sparked the
emergence of novel health applications and systems. This paper extends the literature on health
informatics and telematics and our understanding of everyday practice of these systems in
healthcare contexts. Since IoT BDA and fog computing in healthcare are new fields, findings

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of this study can act as a basis for future studies to determine novel research opportunities on
IoT BDA. Saheb, T., & Izadi, L. (2019).

3.3 The application of Kano model in the healthcare industry

The critical determinant of success in any industry is the customers’ perception of the products
and services offered. Hence, organisations focus on customer satisfaction for service quality
improvement, business growth, and sustainability. Although the Kano model has been used
widely to elicit customers’ service quality requirements and improve customer satisfaction, the
implementation of the Kano model in healthcare remains in its infancy and there is ambiguity
in customer needs related to healthcare services. This paper provides a review of the literature
on implementing the Kano model in healthcare through a systematic search of databases related
to service quality improvement in the healthcare sector. The objective of this paper is to detail
how the Kano model can be employed and integrated with other quality methodologies to
obtain customer requirements and improve healthcare service quality. It is evident from this
systematic review that customer needs and preferences vary with the type of care acquired and
services offered by healthcare providers. The findings allow healthcare providers to
comprehend customer needs related to service quality and develop sustainable improvement
strategies. This article intends to propel further research in service quality improvement of the
healthcare industry. Materla, T., Cudney, E. A., & Antony, J. (2019).

3.4 Application of artificial intelligence-based technologies in the healthcare industry

This study examines the current state of artificial intelligence (AI)-based technology
applications and their impact on the healthcare industry. In addition to a thorough review of
the literature, this study analysed several real-world examples of AI applications in healthcare.
The results indicate that major hospitals are, at present, using AI-enabled systems to augment
medical staff in patient diagnosis and treatment activities for a wide range of diseases. In
addition, AI systems are making an impact on improving the efficiency of nursing and
managerial activities of hospitals. While AI is being embraced positively by healthcare
providers, its applications provide both the utopian perspective (new opportunities) and the
dystopian view (challenges to overcome). We discuss the details of those opportunities and
challenges to provide a balanced view of the value of AI applications in healthcare. It is clear
that rapid advances of AI and related technologies will help care providers create new value

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for their patients and improve the efficiency of their operational processes. Nevertheless,
effective applications of AI will require effective planning and strategies to transform the entire
care service and operations to reap the benefits of what technologies offer. Lee, D., & Yoon,
S. N. (2021).

3.5 Wearable device implications in the healthcare industry

This manuscript analyses the impact of wearable device technology in the healthcare industry.
The authors provide an exploration of the different types of wearable technology that are
becoming popular or are emerging into the consumer market and the personal health
information and other user data these devices collect. The applications of wearable technology
to healthcare and wellness are discussed, along with the impact of these devices on the industry.
Finally, an analysis is provided, describing the current regulations in the US and UK that
govern wearable devices and the impact of these device regulations on users and healthcare
professionals. Erdmier, C., Hatcher, J., & Lee, M. (2016).

3.6 Data mining in healthcare

The knowledge discovery in database (KDD) is alarmed with development of methods and
techniques for making use of data. One of the most important steps of the KDD is the data
mining. Data mining is the process of pattern discovery and extraction where huge amount of
data is involved. Both the data mining and healthcare industry have emerged some of reliable
early detection systems and other various healthcare related systems from the clinical and
diagnosis data. In regard to this emerge, we have reviewed the various paper involved in this
field in terms of method, algorithms and results. This review paper has consolidated the papers
reviewed inline to the disciplines, model, tasks and methods. Results and evaluation methods
are discussed for selected papers and a summary of the finding is presented to conclude the
paper. Jothi, N., & Husain, W. (2015).

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3.7 Big Data for Healthcare Industry 4.0
The innovative technologies emerged with the industrial revolution “Industry 4.0” as well as
the new ones on the way of advanced digitalization enable delivering enhanced, value-added
and cost-effective manufacturing and service operations. One of the first areas of focus for
Industry 4.0 applications is operations related to healthcare services. Effective management of
healthcare resources, clinical care processes, service planning, delivery and evaluation of
healthcare operations are essential for a well-functioning healthcare system. Yet, with the
adoption of technologies such as Internet of Health Things, Medical Cyber–Physical
Systems, Machine Learning, and Big Data (BD), the healthcare sector has recognized the
relevance of Industry 4.0. The concept of BD offered numerous advantages and opportunities
in this field. It changed the way information is gathered, shared and utilized. Hence, in this
study our main ambition is to provide readers with a review of publications which lie within
the intersection of Industry 4.0, BD, and healthcare operations and give future perspectives.
Our review shows that BD constitutes an important place on the technologies Industry 4.0
provides in the healthcare domain. It helps design, improve, analyze, assess and optimize
operations in the domain. Karatas, M., Eriskin, L., Deveci, M., Pamucar, D., & Garg, H. (2022).

3.8 Hidden big data analytics issues in the healthcare industry

The goal of the study was to identify big data analysis issues that can impact empirical research
in the healthcare industry. To accomplish that the author analyzed big data related keywords
from a literature review of peer reviewed journal articles published since 2011. Topics,
methods and techniques were summarized along with strengths and weaknesses. A panel of
subject matter experts was interviewed to validate the intermediate results and synthesize the
key problems that would likely impact researchers conducting quantitative big data analysis in
healthcare studies. The systems thinking action research method was applied to identify and
describe the hidden issues. The findings were similar to the extant literature but three hidden
fatal issues were detected. Methodical and statistical control solutions were proposed to
overcome the three fatal healthcare big data analysis issues. Strang, K. D., & Sun, Z. (2020).

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3.9 Supplier selection criteria in the healthcare industry
As healthcare costs have risen, increased attention has been focused on the role of purchasing
within hospitals. This article reviews the attributes traditionally used by purchasing managers
in supplier selection and then examines the attributes currently being used within a health care
setting. The conclusion is that even though the government and insurers have placed
considerable pressure on healthcare providers to reduce costs, low price has not become a more
important attribute in supplier selection than product quality, delivery, or service. Further, the
research team found that, on average, suppliers are not meeting customer requirements on key
supplier selection attributes. Lambert, D. M., Adams, R. J., & Emmelhainz, M. A. (1997).

3.10 Management issues in the pharmaceutical industry

This paper aims to present a review of literature to assess the progress of research on managerial
issues in the pharmaceutical industry globally. Literature from peer‐reviewed journals
available on online databases was collected for the last decade, using the keyword search
technique, and then classifying it according to major managerial issues, research methodologies
used and geographical zones. Behavioural issues at the consumer/physician level and non‐
behavioural issues in pricing and medical expenses are studied the most, followed by supply
chain management, research and development and manufacturing and services operations
management. There is scope for conjunction of research efforts across themes and players. The
studies focus on the developed nations through the application of field research and
mathematical modelling techniques. The studies in the American region focus more on
development and marketing while studies in Europe are aligned towards manufacturing and
distribution in the industry. Studies in the developing nations are mostly exploratory in nature
and require more focus on issues of research and development and marketing in addition to a
substantial increase in overall research efforts. More trans‐continental studies are needed to
consolidate research efforts globally. Narayana, S. A., Pati, R. K., & Vrat, P. (2012)

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4. Challenges & opportunities

Innovative elements: Well-realized innovation benefits from execution of Additive

Manufacturing incorporate end of tooling and fixturing, plan alteration for adaptability and
capacity, lower material wastage and stock and so forth. Anyway, it is likewise fundamental
that the execution of Additive Manufacturing is performed with an unmistakable
comprehension of the limits like restricted material choices, moderately high machine and
material expenses, greatest fabricate size constraint and somewhat low cycle speeds. The
execution of Additive Manufacturing underway is likewise hampered because of the absence
of specialized principles.

Authoritative variables: Implementation of new assembling innovation can at some point be

reliant upon the size of an association. It has been contended that little undertakings can't
necessarily in all cases be filled in for downsized renditions of bigger ones. This could be on
the grounds that the functioning society and approaches demonstrated in enormous ventures
are not generally reasonable for little business. It is consequently, logical that the way to deal
with executing Additive Manufacturing in a SME would vary from that in an enormous global
organization. Hierarchical construction of an organization, frequently characterized by its size,
is the key element to fruitful execution of new assembling innovation and along these lines it
very well may be fundamental for an association to first re-plan hierarchical designs and cycles
prior to taking on another assembling technology. It ought to in this way be perceived that an
adjustment of work practices and design and subsequently a change in occupations and
undertakings would be essential for the effective execution of Additive Manufacturing. A
critical prerequisite from planners and designers in an association would be their capacity to
figure out the cycle and as needs be revaluate the idea of plan for assembling (DFM). This
hence requires the planners to coordinate item plan with process capacities. Subsequently a
critical variable in AN execution is the labour force insight and skill.

Functional elements: Operational and regulatory designs are frequently impacted because of
a difference in innovation or process. The impact on the plan of items and the plan philosophy
itself has been a vital viewpoint for the execution of Additive Manufacturing. The exceptional
qualities of Additive Manufacturing processes require new plan instruments and practices to
be created. There is certainly not a flat-out mathematical opportunity and in light of the
particular process, various contemplations must be considered while planning items. Activities

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like creation arranging and quality control are additionally prone to be impacted with the
reception of Additive Manufacturing. Store network factors: An implementer of Additive
Manufacturing commonly manages two stock chains; first the merchant inventory network
including machine producer and material provider. Second, the implementer inserts the AM
innovation in the item and structures a production network to their clients and providers. It is
exhorted that for the innovation to be completely valued, critical authoritative changes like the
rebuilding of joint effort with merchants and clients are required. The degree of progress in the
execution of a perplexing innovation development is frequently related to the degree of client
provider interaction. It accordingly requires that for the fruitful execution of Additive
Fabricating advances, producers increment their cooperation with providers and clients. Seller
support is viewed as a key variable following implementation. For complicated and new
Additive Manufacturing processes like Laser Beam Melting and Laser Metal Deposition, it is
important that a steady correspondence with the sellers is kept up with uncommonly on account
of assembled disappointments and surprising outcomes. Machine makers and other Additive
Producing innovation organizations can frequently assume a part in successful execution of the
innovation by prompting on functional and hierarchical changes to the client.

Research philosophy: Some of the complicated Additive Manufacturing processes are as yet
thought to be generally new. Albeit marketed, the central comprehension of some Additive
Manufacturing processes is frequently absent. What's more, a consistent exploration exertion
is fundamental for their actual appreciation. Contextual analyses are utilized to examine the
achievability of an Additive Manufacturing process under a characterized research
framework21. It is often found in the Additive Manufacturing industry, that the organizations
with the most adaptable examination philosophy are much of the time the ones to have the most
advancing applications and items. College research organizations assume a double part in
innovation appreciation by giving a middle for cooperative exploration for the business on one
hand and empowering the stockpile of gifted labor utilizing its instructive exercises on the
other.

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5. Bibliography

1. Ibef

2. IJERPH | Free Full-Text | Application of Artificial Intelligence-Based Technologies in the

Healthcare Industry: Opportunities and Challenges | HTML (mdpi.com)

3. Narayana, S. A., Pati, R. K., & Vrat, P. (2012). Research on management issues in the
pharmaceutical industry: a literature review. International Journal of Pharmaceutical and
Healthcare Marketing.

4. Saheb, T., & Izadi, L. (2019). Paradigm of IoT big data analytics in the healthcare industry: A
review of scientific literature and mapping of research trends. Telematics and Informatics, 41,
70-85.

5. Wamba, S. F., Anand, A., & Carter, L. (2013). A literature review of RFID-enabled healthcare
applications and issues. International Journal of Information Management, 33(5), 875-891.

6. Materla, T., Cudney, E. A., & Antony, J. (2019). The application of Kano model in the
healthcare industry: a systematic literature review. Total Quality Management & Business
Excellence, 30(5-6), 660-681.

7. Lee, D., & Yoon, S. N. (2021). Application of artificial intelligence-based technologies in the
healthcare industry: Opportunities and challenges. International Journal of Environmental
Research and Public Health, 18(1), 271.

8. Erdmier, C., Hatcher, J., & Lee, M. (2016). Wearable device implications in the healthcare
industry. Journal of medical engineering & technology, 40(4), 141-148.

9. Jothi, N., & Husain, W. (2015). Data mining in healthcare–a review. Procedia computer
science, 72, 306-313.

10. Lambert, D. M., Adams, R. J., & Emmelhainz, M. A. (1997). Supplier selection criteria in the
healthcare industry: a comparison of importance and performace. International Journal of
Purchasing and Materials Management, 33(4), 16-22.

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11. Strang, K. D., & Sun, Z. (2020). Hidden big data analytics issues in the healthcare
industry. Health informatics journal, 26(2), 981-998.

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