Introduction
Supply chain management is an integral component of operation management and has a
direct effect on how successfully organizations function. The purpose of supply chain
management is to remove communication barriers and eliminate redundancies by
coordinating, monitoring, and controlling processes within an organization. Identifying the
components of the supply chain, facilitating better decision-making, creating improved
communication, and identifying weak links in the chain causing bottlenecks in an
organization are crucial to supply chain integration. There are three principle elements of
supply chain integration: management of information and financial flows, inventory
management, and management of relationships of trading partners (Power, 2005).
“œModern businesses are dynamic in nature and to stay competitive (organizations) need
to optimize their business processes by understanding and reacting to the rapid changes in
their environment (Banavar, Black, Caceres, Ebling, et al, 2005). Dialysis, a specialized
field in the healthcare industry, is a major business entity with penchant for a rapidly
changing environment. Dialysis is a medical treatment for individuals with limited or no
kidney function and without this specialized therapy these unfortunate individuals would
not survive. In dialysis, supply chain management is crucial from all aspects in providing
comprehensive and adequate patient care. The constant changing needs of patients and the
organizational environment can cause disruption in a well managed supply chain within a
clinic operation resulting in inadequate patient care. Lack of inventory, inadequate staffing,
and poor supplier relationships can all contribute to compromised customer (patient)
service.
Identified Supply Chain Process
In any organization the inventory control process is a very important part of the supply
chain process. Inventory control is concerned with minimizing the total cost of inventory.
The three main factors in inventory control decision-making process are:
The cost of holding the stock;
The cost of placing an order or the set-up cost of production;
The cost of shortage, i.e., what is lost if the stock is insufficient to meet all demand.
Inventory control is not just a materials management issue. The purchasing, receiving, and
accounting departments all contribute to the accuracy of the inventory methods and
records. Inaccurate inventory data will contribute to shipment delays, production
stoppages, purchasing of the wrong items, and stocking too much inventory. Inventory
management and inventory control must be designed to meet the dictates of the
marketplace and support the companys strategic plan. The many changes in market
demand, new opportunities due to worldwide marketing, global sourcing of materials, and
new manufacturing technology, means many companies need to change their inventory
