**3.3 Healthcare value chain capabilities model**

Though the supply chains are widely used in manufacturing industry to start with, subsequently the supply chain concepts and practices have been applied in other sectors including healthcare industry, pharmaceutical, food and agriculture, ecommerce, humanitarian, disaster relief etc. Healthcare is changing at an unprecedented pace, due to the impacts of technology, cost pressures from both payers and patients who are seeking quality care. Healthcare organizations including providers, retailers, distributors and wholesalers, manufacturers. Some of the organization who have adopted supply chain practices include Johnson and Johnson, Cleveland Clinic, Mercy, CVS Health, McKesson, Novo Nordisk, Medtronic, Stryker, Roche, Pfizer, Owens and Minor etc. For example, Mayo Clinic has improved the care delivery and reduction in cost by collaborating with its suppliers and adopting digital technologies in its operations. **Figure 8** shows the framework suggested by Gartner in respect of healthcare organizations with a main objective of improving the human life at sustainable costs as well as quality. This model has five major processes viz., patient focus, collaboration, network visibility, cost to serve and change management supported by fundamental capabilities covering all the processes [11].

#### **Figure 8.**

*Healthcare value chain capabilities model [11].*

*Supply Chain Management and Restart of Economy in Post COVID-19 DOI: http://dx.doi.org/10.5772/intechopen.94207*

## **3.4 Sectoral specific supply chains**

Due to inherent advantages and capabilities of supply chains, many organizations across different industry/business verticals have adopted supply chains and benefited immensely. Some of the major sectors include automobile, food and agriculture, e-commerce, healthcare including hospitals, pharmaceuticals, diagnostic services, medical devices etc., defense and government, energy and power, oil and gas etc. Supply chains of e-commerce, food and healthcare is briefly explained in this section.

#### **3.5 Electronic commerce supply chains**

Electronic commerce (e-commerce) supply chains have gained significant importance due to ability of supply chains in meeting the customer service and low cost. Many companies like Amazon, flipkart, Alibaba etc. have demonstrated the power of supply chain in their business operations. **Figure 9** shows typical supply chain network of e-commerce supply chains. **Figure 10** shows a macro view of supply chain management at Amazon [Amazon.com]. e-commerce supply chains are more robust compared to others mainly due to its ability to manage the disruptions during crisis like COVID-19. Particularly during COVID-19 crisis, Amazon, flipkart and other e-commerce companies were able to maintain the continuity of supply in spite restrictions like lockdowns, social/physical distance and limited time operations, shortage of manpower etc. These companies are able to recover fast due to its resilience and responsiveness capability. This can be seen from the latest trend in the share price of e-commerce and food supply chain companies.

#### *3.5.1 Food supply chains*

A typical food supply chain with food safety information system and quality assurance system is shown in **Figure 11** [14]. The food supply chain includes farm/

**Figure 9.** *E-commerce supply chain [12].*

**Figure 10.** *Amazon supply chain [13].*

**Figure 11.** *Food supply chain [14].*

farmer, distributor, factory, distributor/retailer and final customer. In case of food supply chains the most critical issue is food safety across the supply chain. These supply chains focus very heavily into food safety and traceability at each stage of the supply chain mainly at interfaces. Food supply chains uses information and communication technology widely. Quality and Compliance of standards across food supply chain is very critical and makes use of advanced technologies like RFID, temperature controls, GPS enabled systems for tracking and traceability. It follows standards like good manufacturing practices, ISO standards and TQM etc. [14].

*Supply Chain Management and Restart of Economy in Post COVID-19 DOI: http://dx.doi.org/10.5772/intechopen.94207*

**Figure 12.** *Elements of healthcare supply chain [15].*

#### *3.5.2 Healthcare supply chains*

Healthcare supply chains are more complex than other supply chains due to presence of many stakeholders and responsiveness requirements. A typical healthcare supply chain is shown in **Figure 12**. Healthcare supply chains poses several challenges due to stringent regulatory requirements, safety and security and quality requirements. In spite all these challenges, many healthcare organizations benefited by adopting supply chain management approaches. According to Gartner study [11] on top 25 healthcare supply chains, top 5 organizations include Johnson and Johnson, Cleveland Clinic, Mercy, CVS health and Duke University Health system. Many of these organizations are using best practices like collaboration, digitalization, robust processes that are aligned with the overall objective as well as the elements listed in healthcare value chain capabilities model. The major strengths of healthcare supply chains include agility, alignment, adaptability, resilience and responsiveness. These organizations follow people, process and technology solutions in the care delivery. Of late, many healthcare organizations particularly using AI and Blockchain technologies for personalized care in large scale. Telemedicine and home care is growing very fast due to COVID-19 crisis where supply chain is very critical. Some of the organizations are using drones for delivery of medicines, pathology samples, food and equipment. Many start-ups also emerging in healthcare by bridging the gap predominantly through digital technologies and supply chains.

#### **3.6 Supply chain configurations (hub and spoke model, centralized vs decentralized SC)**

Supply chain network structures and its configuration is very important in achieving the performance of supply chains. Predominantly used supply chain structures in the practice include centralized and decentralized [2] or Hub and spoke model. **Figure 13** shows typical structure of centralized and decentralized supply chains. Centralized systems are more efficient and are generally used for

**Figure 13.**

*Centralized and decentralized supply chain system [2].*

**Figure 14.** *Hub and spoke model of a healthcare start-up [16].*

high volume low value commodities like steel, cement, automobiles, computers etc. where cost is important. Whereas decentralized systems are predominantly used in e-commerce, healthcare and other services where responsiveness is most important. Hub and spoke models are predominantly used is both product and service organizations. A typical hub and spoke model of a Start-up delivering health services in Rural areas in India is shown in **Figure 14**. Generally, the Hubs are equipped with more resources that can help serving the customers located spoke level. Typically, these share many resources and innovate through collaborative mechanism and employ multi skilled people and technology to improve the efficiency and reach.
