Healthcare Matters

Last Friday, the six-month-old Wharton Supply Chain Organization hosted its inaugural conference, bringing together students, faculty and senior professionals from major companies to talk about managing the journeys of different products from seed to shelf. Senior vice presidents and other leaders from companies such as Google, IBM, Boeing and Amazon.com spoke. With over 700 attendees, the conference marks one of the largest undergraduate-focused Wharton conferences ever. “Until now, supply chains have been taboo in Wharton,” said Wharton and Engineering senior Ridhima Parvathaneni, founding president of the organization. “There was latent interest for operations management, but no way to get involved outside of classes.”

Today, I ran across a follow up story written by Ms. Parvathaneni, the 21-year old conference founding student at Wharton.  And I was pleased to see that it is  yet another powerful endorsement for the numerous potential applications of optimization to SCM; that it calls for what she refers to as the “last majority” to hurry up and “get with it.” The applications of optimization, whether for conducting SCM scenario planning (a.k.a. contingency planning), negotiation/collaborative insights, logistics and distribution mangement, more competitive sourcing, better inventory management, etc., are all potential game changing applications and have been so for close to a decade. Optimization is behind numerous new best practices –and its applications are largely industry agnostic. Why vendors like BravoSolution, Iasta and CombineNet (there are other skilled vendors too) don’t find themselves flooded with inquiries from healthcare providers, manufacturers, GPOs and distributors alike has long been seen as a function of data issues and a set of SCM priorities that says, P2P and compliance management challenges must first be solved. And that’s probably fair. But it’s also fair to say that the pay off for one well-timed application can pay the freight for all of these other tools combined.

Satya Ridhima Parvathaneni is from Hyderabad. As said, she was responsible for coordinating last Friday’s conference at Wharton. I hope you enjoy her guest post.

The supply chain, despite being the backbone of every single corporation, is the best kept secret in the business world. Companies are always written about for their strategic, marketing or legal issues, but hardly do we hear about the phenomenon that is fundamentally responsible for their success (or failure thereof) – the supply chain. No doubt that several C-suite executives have supply chain optimization on their speed dial. But why is such a game-changing business application not effectively publicized to the last majority – leaving its potential largely untapped?

I realized this in my very first year at Wharton. Interactions with business leaders, discussions with top-notch Wharton faculty, and a general knack for seeing beyond the obvious – these helped me learn that the supply chain can give a fitting reply to all the uncertainty, risk, and volatility that companies worldwide are suffering from.

India’s economic growth is consistent with the health of the interconnected supply chain in several key industries. The recent electrical blackouts were due to a dysfunctional power sector supply chain, while the impending boom in medical tourism is made possible by an overall efficient health care supply chain.

Political volatility leads to economic uncertainty. When the decision turnaround rate at the Center slows down or key milestones are not achieved on time, businesses have to adjust their supply chains accordingly to absorb the shocks. Major reforms, including the recent ones carried out by prime minister Manmohan Singh directly affect firms that have to optimize on their supply chain to quickly adapt to the new conditions. For instance, we are busy debating FDI in retail, but time has come to look at how to best integrate the indigenous kirana stores with the new multinational line of service to create synergy (if a particular state implements the reform), or how to improve the existing farm-to-fork supply chain if a state argues that it can achieve the same without implementing the reform. In effect, the final shape of the supply chain is what makes the reform worthwhile. Finally, with the sustainability issue heating up in our country, firms will and already are turning to the supply chain to sow the seeds of a greener future.

I believe in having a strong base to think big and respond quickly to change – which is why I stand by supply chain optimization. It is fundamentally powerful. I hope through this inaugural conference, we have been successful in spreading this crucial message to all the future business leaders out there. In the end, I am confident that this legacy that we started will continue for years to come and will empower us to innovate to thrive.

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Getting all the SCM essentials under control is clearly wise. But it can be unending –right? That’s why it will forever remain short sighted (in my opinion) for SCM leadership to continue to postpone their education and adoption of these applications. The right kinds of optimization tools when applied by skilled vendors are true game changers. They create value(s) that simply cannot be realized any other way.

—Tom Finn

Sources. The Economist, The Pennsylvanian