Investigation into current supply chain practices at a private healthcare provider in South Africa

Erwin Bauernschmitt, William M. Conradie


As primary objective this descriptive research established to what extent a South African private healthcare provider in the metropolitan province of Gauteng, has contemporary knowledge and understanding of supply chain practices. In addition, the study investigated to what extent the selected private healthcare provider has adopted and applied such knowledge as recognised practices and concepts defining integrated supply chain management. To facilitate this, a generic supply chain model was defined for the private healthcare provider. This supply chain model–based on the private healthcare provider's value chain–provided a roadmap for testing and benchmarking the selected organisation's knowledge and application of supply chain practices. In terms of repeatability and objectivity of assessment, the defined approach lends itself for future comparative investigations of, either other primary healthcare providers' relative performances on a defined supply chain continuum, or to determine knowledge levels and application competence of supply chain practices in different industries.

Research was conducted to measure the level of assumed or explicitly attributed knowledge of supply chain practices in relation to the companies' ability for the application, implementation and utilisation of industry best-practices as pertaining to supply chain management. This component of specialised expertise can be viewed as a niche area of knowledge management and knowledge application from both strategic and operational perspectives, in the context of competitive operations in the Southern African private healthcare industry. Output of the analysis was subsequently plotted on a supply chain evolution matrix postulated as part of this study. This model measures and depicts the respective maturity levels of selected supply chain practices (within the specific industry). This allowed the investigation to establish the exact supply chain fit as a study output–in terms of the postulated supply chain matrix and evolution model–for the participating private healthcare company.

Based on study findings, the critical importance of knowledge and application of current supply chain management practices in terms of strategic positioning was confirmed by the private healthcare provider. The company's view on its operational performance was also validated, with the selected organisation regarding the management of its overall supply chain as a potential source of strategic and operational advantage, e.g. attracting capital, fostering investor confidence and in bringing new projects to realisation in an accelerated manner. Based on the collated findings, the study concluded that the particular private healthcare provider demonstrated good levels of knowledge of current supply chain practices covering a relatively large portion of its own supply chain, whilst applying current supply chain practices (incl. the proper management and application of this knowledge) to a large extent across its own supply chain.

Notwithstanding the progressive level of supply chain practice utilisation at the selected organisation, the study concluded that significant monetary savings of between 10 – 20 % still existed in potential total operating cost reduction, specifically in terms of further adoption and application of supply chain practices at the participant’s private healthcare operations. Adapting current integrated supply chain management practices into the South African private healthcare industry therefore holds the potential for increased shareholder value creation. This in turn, could translate into substantial amounts being made available annually for continuously increasing healthcare and service provision requirements, as well as enabling advances in the search for continued innovation. Thorough knowledge, understanding and application of these principles will therefore not only improve the participant’s competitiveness and success in local markets, but could indeed prove to be one of the kingpins for success and sustainable operations in an increasingly competitive market and changing economic landscape.



Integrated supply chain practices, Private healthcare provider, Knowledge awareness and knowledge application, Knowledge management, Implementation, Supply chain evolution matrix.

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