Benchmarking On Healthcare Supply Chain Transparency and Demand Planning

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    • #292030

      SIG is working to benchmark a definition of healthcare supply chain transparency and would appreciate your insights on the following proposed definition. Additionally, if you have any thought leadership to share on the topic, please include that in your response.

      Do you agree that healthcare supply chain transparency can be defined as follows? If not, how would you define?


      Supply chain transparency in healthcare is visibility to product information from the point of patient care back through the healthcare supply chain through the manufacturer. Information that is visible includes clinical selection criteria, patient outcomes, reimbursement, demand signals, inventory levels, product numbering and uniform product descriptions along with standard classification, clear pricing, and terms related to products utilized in providing patient care.

    • #292642

      I would say generally this is a good definition, however, I would caution against including patient outcomes. There are a multitude of issues that affect patient outcomes not related to the product, that may or may not be known and the effect(s) of which may be impossible to know. Incorporating this as a measure of supply chain transparency could invite plaintiffs’ attorneys by the boatload.

    • #292643

      I’d change the first sentence to read, “Supply chain transparency in healthcare is visibility to information about goods and services and the factors that impact those goods and services from the point of patient care to the manufacturer.”

      In this definition I consider that visibility to the manufacturer includes visibility into manufacturing and purchasing plans and does not just start with the post-production processes at the manufacturer. Those planning and purchasing processes can have as big an impact on the manufacturer’s ability to support the supply chain as the manufacturing and quality control processes.

      I would modify the second sentence to read, “Information that is visible includes, but is not limited to, …” The reality is that the items listed don’t begin to include everything that could or would influence/impact the performance of the Healthcare Supply Chain nor adequately define all of the factors that should be considered if a company really wants to create transparency.

      A wise mentor from my past used to say that transparency in a supply chain means that everyone involved in the supply chain sees or feels everything that occurs throughout the supply chain. He used to say he wanted everyone in the supply chain to see and feel every sale, every order.

    • #292644

      “The California Transparency in Supply Chain Act, signed into law by Governor Schwarzenegger in September 2010 and effective on January 1, 2012, requires retailers and manufacturers doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for goods offered for sale. The disclosure must be posted on the retailer or manufacturer’s website with a conspicuous and easily understood link from the homepage.” (California Requires Retailers and Manufacturers to Comply with Anti-Slavery and Human Trafficking Law by January 1, 2012 by Bryan Cave)

      Who is subject to it? “Covered entities are: (1) retailers or manufacturers; (2) doing business in California; (3) with annual worldwide gross receipts exceeding $100,000,000, and are defined by the entity’s filings with the California Franchise Tax Board (‘FTB’). Covered retailers and manufacturers are those entities reporting their primary business activity on their FTB returns as retail trade or manufacturing. This excludes, for example, wholesalers… Whether an entity has global gross annual receipts in excess of $100 million is determined by the amount disclosed on its tax return.” (California Supply Chain Law Affects Large Retailers and Manufacturers Doing Business in California by Littler)

      How are authorities defining companies “doing business in California”? “A company is doing business in California for taxable years beginning on or after January 1, 2011 if it meets any of the following four conditions:

      The company is organized or commercially domiciled in California.
      Sales in California for the applicable tax year exceed the lesser of $500,000 or 25 percent of the company’s total sales.
      The value of the real and tangible personal property of a company in California exceeds the lesser of $50,000 or 25 percent of the company’s total real and tangible personal property.
      The amounts paid by a company in California for compensation exceeds the lesser of $50,000 or 25 percent of the total compensation paid by the company.”
      (What You Need to Know About the California Transparency Supply Chains Act by Sedgwick LLP)

      What do covered companies need to do? “The [Transparency in Supply Chains Act ] will require certain companies with more than $100 million in annual worldwide gross receipts that do business in California to disclose via a “conspicuous link” on their main website their efforts (if any) to address risks related to slavery and human trafficking in their supply chains.” (New California Disclosure Requirements Regarding Slavery and Human Trafficking in Supply Chains to Take Effect on January 1, 2012 by Wilson Sonsini Goodrich & Rosati)

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