A PRACTICAL FRAMEWORK OF INDUSTRY-UNIVERSITY FOR SUPPLY CHAIN MANAGEMENT OF HEALTH-CARE INDUSTRY WITH USING DISTANCE HEALTH-CARE ICT PLATFORM

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1 International Journal of Electronic Business Management, Vol. 7, No. 4, pp (2009) 241 A PRACTICAL FRAMEWORK OF INDUSTRY-UNIVERSITY FOR SUPPLY CHAIN MANAGEMENT OF HEALTH-CARE INDUSTRY WITH USING DISTANCE HEALTH-CARE ICT PLATFORM Wei-Shuo Lo Department of Public Finance and Graduate Institute of Business and Management Meiho Institute of Technology PinTung (912), Taiwan ABSTRACT Healthcare has became a popular issue as its scope involves different sciences, people, and knowledge including medicine, patients, nursing, doctors, various life controlling systems, and information technologies. Healthcare industry connects different complicated events from inputs to outputs of the healthcare system, these events escalate in different situations, and thus they become problems in healthcare supply chain management (SCM). The industry and the university have an opportunity to cooperate with each other to find an effective way to respond to industrial problems on supply chain management. This paper describes how to build an effective partnership between industry and the university on the use of a distance healthcare information communication technology (ICT) platform to provide a practical framework for industry-university cooperation based on healthcare supply chain. Keywords: Industry-University Cooperation, Healthcare Industry, Information and Communications Technology (ICT), Supply Chain Management (SCM) * 1. INTRODUCTION Information and logistics are two main problems in supply chain management (SCM). Information flows from customers to distributors, manufacturers, and suppliers (downstream to upstream). On the other hand, logistics flows from suppliers to manufacturers, distributors, and customers (upstream to downstream). Efficient management of information and logistics in a supply chain is very important in running a company. Management information systems and simulations tools have been commonly used to control information on logistics in recent years. They help reduce paperwork and human errors in everyday tasks and can assist managers in handling important information and predicting and setting different parameters to simulate different situations, helping them make good business decisions. They also provide an efficient and effective electronic business environment. Healthcare connects different complicated events from inputs (medicine, nursing, doctors, various life controlling systems, and information technology) to outputs (after healthcare patients obtain good health) of healthcare. This process is very similar with SCM in the way suppliers support * Corresponding author: x2134@meiho.edu.tw different materials for each healthcare patient (customer). When these events escalate, they become problems in healthcare SCM. The healthcare industry has similar problems on information and logistics. It also deals with the challenge in efficiency such as on how to deliver information and materials at the right time, in the right way, and at the right place. This is not easy to do. Thus, healthcare SCM is attracting more researchers to conduct more researches in this field. The healthcare ICT system is highly related to multidisciplinary knowledge including medicine, nursing, biomedical engineering, and information technology. Such interdisciplinary training for engineering students, especially in information technology (IT), is a significant challenge from the viewpoint of engineering education. A feasible way to fulfill knowledge demand from both the IT and healthcare fields in the usual four-year college education is to make students learn from practical projects by developing a healthcare ICT system for the industry. This can be done through the so-called learning-by-doing method. M. Inc. is a well-known large-scale system integration company located north of Taiwan. In 2009, the chairman of the company was invited as a keynote speaker at a forum of players from industry and the university in Meiho Institute of Technology. His topic was on the Relevance of the IT industry in

2 242 International Journal of Electronic Business Management, Vol. 7, No. 4 (2009) the Healthcare industry. After his speech, he said that M. Inc. can provide a distance healthcare platform for Meiho. This can become a platform suitable for industry-university cooperation. Meiho followed what the chairman suggested and began to organize a project team to pave the way for the cooperation between the industry and the university. Meiho then worked on this cooperation project and commenced on practicing engineering education (information technology) with the view of training students in real cases. The main goal is to merge engineering education with information technology. Meiho believed that engineering education cannot be learned simply in classrooms and through textbooks, but it also needs practical approaches to learning to allow students to practice and simulate methodology. This industry-university cooperation is then considered effective, and this is why Meiho and M. Inc. initiated this cooperation. The industry can obtain academic resources from the university such as those from professors and students conducting R&D. These works can assist the industry in solving and improving product or service problems. The Industry and the university can then obtain a win-win strategy to reach their respective goals. This paper is organized as follows. Section 2 describes healthcare and how it applies ICT. Section 3 describes how the healthcare industry uses the concept of SCM to understand the problems in the industry. Section 4 discusses a practical framework for industry-university in healthcare supply chain. Finally, Section 5 gives the conclusions. 2. HEALTH CARE WITH INFORMATION AND COMMUNICATIONS TECHNOLOGY In recent years, healthcare and ICT have been gaining significant attention as healthcare processes deal with important information, particularly those related to the different treatments being applied to patients. This paper reviews some of the related research works on healthcare and ICT. Hospital information system (HIS) plays an important role in the healthcare industry. HIS allows healthcare institutions to record all clinical procedures done on patients as well as their medical records. Such a system then makes it possible to generate, transmit, analyze, and store data in one hospital or clinic [5]. Some researchers have already discussed information system and the successful experiences of medical practitioners using it. However, [3] attempted to construct a socio-technical network around an executive information system in healthcare. Doolin [3] not only discussed IT but also looked into the human factors affecting the system s implementation phase. The problems eventually caused project failures due to different human and non-human factors. IT was accompanied by the advent of the" World Wide Web, "which also led to the development of new applications. This is very important for the healthcare industry because using web and IT technology will impact the method of cooperation in the future. For example, in [1], a common interface to communicate and access medical records embedded in a smart card is proposed. This highly mobile health management system allows medical practitioners to access their patients medical records even if they are on the move. ICT has gained a critical role in the healthcare industry, and security is a crucial consideration. In [6], the relationship of healthcare management and information systems security is discussed. According to [6] his research, hospitals deal with huge data regarding patients treatments, and they do not really have a close-network environment. Managers can access the internet and intranet without guarantee of security. It is then important to build a secure data environment as well as train managers in healthcare establishments. Despite the different issues that have been discussed on how IT could be applied in the healthcare industry, they [4] carried out a different research work by conducting a literatures review. In [4], they proposed some useful key points for reference in The following are their suggestions for research work: Patient-centered recording and use of medical data for cooperative care Processes-integrated decision support through current medical knowledge Comprehensive use of patient data for research and healthcare reporting This paper then reiterates that ICT plays an important role in information delivery and serves as an effective communication tool that can bridge different roles in the healthcare industry and even in SCM. This paper also reviews some research works on healthcare supply chain for the deeper understanding of the problems in the healthcare industry. 3. SUPPLY CHAIN MANAGEMENT IN HEALTH CARE This paper refers to several research works for the better understanding of the relationship between SCM and the healthcare industry. 3.1 Supply Chain Management Logistics plays an important role in a supply

3 W. S. Lo: A Practical Framework of Industry-university for Supply Chain Management 243 chain. It can be divided into two types: inbound and outbound logistics. Inbound logistics represents the purchase process for raw materials of a company, while outbound logistics represents the distribution process of products. Copacino [2] defined the problems emerging in logistics as an integrated pipeline. Figure 1 shows the three main activities: supply, operation, and distribution. They are described as follows: 1. Supply is concerned with the tasks of sourcing, purchasing, inbound-transportation, raw materials, and past inventory. 2. Operation refers to the actual carrying out of business processes. Its tasks include production planning, scheduling, and work in process inventory. 3. Distribution focuses on satisfying the requirements of customers. Its tasks include forecasting, customer service, finished goods inventory, warehousing, and outbound transportation. Information Logistics SUPPLY -Sourcing -Purchasing -Inbound Transportation -Raw Martial and Part Inventory OPERATION -Production Planning -Production Scheduling -Work in Process Inventory DISTRIBUTION -Forecasting-Customer Service -Finished Goods Inventory -Outbound Transportation Figure 1: The problems appearing in logistics as an integrated pipeline 3.2 Healthcare Supply Chain Management SCM has become an important strategy that assists businesses in improving their competitiveness. In [8], the researchers believe that the supply chain of business should not only face the problems on information flow but also issues in product flow. More and more businesses are now considering the use of integrated concepts in improving the processes of information and materials from the upstream and downstream of business areas. This applies to the SCM in the healthcare industry as hospitals are also businesses. Hospitals have their upstream components (e.g., pharmaceutical manufacturers acting as suppliers) and downstream components (e.g., patients or small clinics acting as customers). IT can then be viewed from an SCM perspective as a tool, which can connect the different roles associated in SCM. ICT can also approach this same goal like any other IT. In [9] investigated Australia s healthcare industry as an example to explain the IT and the telecommunications industry s application of e-commerce strategies to improve their services as well as ensure cost-effectiveness. The researchers also showed that the pharmaceutical industry supply chain connects manufacturers, wholesalers, suppliers, and hospitals. In [10] pointed out that as far as inventory management is concerned and in using the hybrid pilot project at Eastern Hospital as a case study, the health sector supply chain can derive benefits from integration. According to their research, the stockless method is important, and the improvement in healthcare quality should be extended to the current supply chain and to the patient care units. In [7] also proposed another viewpoint for healthcare industry in Singapore. Their research discussed that costs in logistics and in the SCM of medical supplies can be reduced. This can be done through process reengineering, which can reduce activity costs by eliminating non-value added activities. 4. A PRACTICAL FRAMEWORK OF INDUSTRY-UNIVERSITY FOR HEALTHCARE SUPPLY CHAIN It is difficult to simulate and learn from all the scenarios occurring in the healthcare industry if we want to take the point of view of the university because SCM in the healthcare industry is highly related to multidisciplinary disciplines including medicine, nursing, biomedical engineering, and IT. Setting up an industry-university-oriented cooperation is then necessary. This paper refers to a real-case experience from which we can draw a practical framework for building an effective partnership between the industry and the university. 4.1 Cooperating Requirements of Health Industry The problems in the industry are usually complicated and difficult to understand. The business environment is quite unpredictable; sometimes business is good, while in other times it is bad. For instance, the last two years have shown that the business environment has been badly affected by the financial crisis ongoing in many countries. This problem has led to decreasing benefits. The features of the healthcare industry are quite different from those of other industries, although some characteristics are the same nevertheless. 1. B2B problems in health care industry We know that the supply chain faces problems

4 244 International Journal of Electronic Business Management, Vol. 7, No. 4 (2009) on information and logistics. It is easier to describe B2B problems in the healthcare industry through an illustration. Figure 2 shows these Businesses to businesses (B2B) problems in the healthcare supply chain. Figure 3: B2C problems in healthcare supply chain Figure 2: B2B problems in healthcare industry Figure 2 illustrates the normal cycle in hospital cases. For instance, when a hospital or healthcare center would like to care for or treat different patients, it applies medical care according to observed symptoms and uses different equipments (such as x-ray, CT scanner, information system), instruments (such as stethoscope, electrocardiogram, syringe), and medicines, as well as gives proper nursing care and doctor s treatments. We should remember that such equipment and instruments are also like the usual materials supplied by different suppliers. Therefore, B2B problems in the health care industry also include sourcing, purchasing, inbound-transportation, raw materials and inventory management. 2. B2C problems in health care industry Figure 3 shows the Businesses to Customers (B2C) problems in the healthcare supply chain. Here, the customers (patients) are contacted directly. When B2B connects with suppliers, which are related to managerial problems, dealing with patients is more important and complicated than B2B problems. Patients not only face managerial problems but also issues in treatments as well as legal or policy-related problems. For instance, legal disputes arise from medical malpractice. Patients should then be treated as customers who require excellent care, correct treatments, and even services with a personal touch. All these lead to customer (patient) satisfaction. B2C problems in the healthcare industry also include production (healthcare) planning, production (healthcare) scheduling, and work-in-process quality in healthcare. 3. SCM problems in health care industry Understanding B2B and B2C problems in the healthcare industry will allow us to integrate them. This is a good starting point for tackling SCM problems. Figure 4 shows the healthcare supply chain. Normally, the SCM path is from the customers (patients) to the suppliers, as well as from the suppliers to the customers (patients). Figure 4 is only a simple diagram, and thus it is important to remember that problems in the healthcare industry can be more complicated or difficult. SCM in the healthcare industry includes B2B and B2C supply chains. Cooperation is then clearly important to facilitate a better and more efficient healthcare SCM. Figure 4: The healthcare supply chain 4.2 Cooperating Requirements of University Teaching in the university is a challenging task. Teachers set learning goals for their students such as those covering concepts, skills, and knowledge. They then develop instructional designs, which allow students to learn under different teaching activities. Moreover, the teaching and learning process is also like a production system. It contends with different inputs to achieve learning purposes. Figure 5 shows the teaching and learning process.

5 W. S. Lo: A Practical Framework of Industry-university for Supply Chain Management 245 Figure 5: The teaching and learning process Figure 5 presents the inputs that include the system designer, instructors, students, internet, software, hardware, and syllabus. The teaching process uses a communication approach that is interactive and cooperative to achieve the goal of learning concepts, skills, and knowledge. It may be as simple as assuming that with proper teaching and learning (as inputs), we can also expect to generate good outputs. However, this is not always so because teaching and learning also require more practical experiences. The university then faces different challenges, particularly on how to provide practical experiences for teachers and students. 4.3 Framework and Functions of Cooperation A practical framework can address this need for cooperation between the industry and the university. The bridge can be created through the use of a distance healthcare ICT platform. We believe that that need for a practical environment for education can be offered through learning modules that can provide learning by doing experiences. Figure 6 shows an effective partnership based on a practical industry-university framework. It shows the key in the center of the figure (note the links between M. Inc. and our university, including the interaction between the two functions of supply and demand). These two functions are represented in the goals of industry-university cooperation Function of Supply M. Inc. represents the industry, which as a supplier can provide industrial experiences for the university. This is very important for the university because M. Inc. provides real-case experiences from their customers. The consumers of a distance healthcare ICT platform by M. Inc. are the hospitals, which represent as a practical healthcare environment. A practical healthcare environment includes many healthcare operating processes. Figure 6: Building effective partnership based on a practical framework of industry-university with using distance health-care ICT platform Doctors need to prepare clinical processes for each patient thoroughly. In the case of nurses, they also need perform excellent nursing care for each patient. Different diseases require different approaches in nursing care. Meanwhile, patients also have to prepare themselves psychologically, particularly because when they arrive in the hospital, they usually spend time with their doctors who need to assess their clinical procedures. Hospitals also deal with different healthcare operating processes, and thus we can understand that healthcare also includes a systemic framework. The healthcare environment is like a supply chain system. For example, treatment for a patient needs inputs from different medical personnel such as doctors, nurses, laboratory staff, anesthetists, and other service providers. These professionals require suitable places and equipment for the treatment of each patient. Therefore, building an institute of medicine is not easy. It is also impossible for each university to build such institutions if they want to train students on IT. It is then imperative for the university to connect with the industry Function of Demand Meiho Institute of Technology represents the university, and thus it is a source of demand. Meiho requires influence from the industry because sometimes these influences can become a requirement of technology. This project shows Meiho as part of the industry-university project, which is anchored on the concept of cooperation. The project requires M. Inc. to provide their distance healthcare ICT platform for free to Meiho. Through this cooperation, Meiho s teachers (professors) will have the opportunity to access the practical healthcare ICT platform, allowing them to use the platform and helping them understand the functions of the system design. The knowledge will then enable them to create projects for training

6 246 International Journal of Electronic Business Management, Vol. 7, No. 4 (2009) students. The inherent characteristics of education in IT do not allow students many opportunities for real-life case studies or opportunities where they can try their capabilities in problem solving. This industry-university project based on using a distance healthcare ICT platform can provide an appropriate and useful education module for students. The traditional form of education in IT is mostly classroom-based. Our framework in this industry-university cooperation will provide students and professors not only teaching and learning opportunities in the classroom but also experience in dealing with a hospital setup. This will enable them to understand the problems in and requirements of healthcare, thus allowing them to understand better the healthcare supply chain. 5. CONCLUSION This paper describes how to build an effective partnership between the industry and the university by using a distance healthcare ICT platform. We provide a practical framework for industry-university cooperation based on an understanding of the healthcare supply chain. The first part deals with the university. We describe how the university can plan for and conduct learning-by-doing methods for students and teachers. We believe that this cooperation project between the industry and the university can create good impacts. The second part relates to the industry. We introduce our partner M. Inc. and show how they can operate the distance health care ICT platform for hospitals (their customers) and provide their e-services. The third part shows the end users (hospitals) of the distance healthcare ICT platform. We describe the problems they could encounter in healthcare and how they could benefit from the use of a distance healthcare ICT platform. This paper then proposes a practical framework for industry-university cooperation in SCM in the healthcare industry using a distance healthcare ICT platform. REFERENCES 1. Chan, A. T. S., 2000, WWW+smart card: Towards a mobile health care management system, International Journal of Medical Informatics, Vol. 57, pp Copacino, W. C., 1997, Supply chain management (The Basi and Beyond), The ST. Lucie Press/APICS Series on Resource Management, USA. 3. Doolin, B., 1999, Sociotechnical networks and information management in health care, Accounting, Management and Information Technologies, Vol. 9, pp Haux, R., Ammenwerth, E., Herzog, W. and Knaup, P., 2002, Health care in the information society: A prognosis for the year 2013, International Journal of Medical Informatics, Vol. 66, pp Ishida, Y. and Sakamoto, N., 1998, A secure model for communication of health care information by sub-division of information and multiplication of communication paths, International Journal of Medical Informatics, Vol. 49, pp Katsikas, S. K., 2000, Health care management and information systems security awareness training or education? International Journal of Medical Informatics, Vol. 60, pp Kumar, A., Ozdamar, L., and Zhang, C. N., 2008, Supply chain redesign in the healthcare industry of Singapore, Supply Chain Management: An International Journal, Vol. 13, pp Lo, W. S., Hong, T. P. and Hsu, H. J., 2006, A case study for global supply chain management in Vietnam, International Conference on Logistics and Supply Chain Management (LSCM2006), Hong Kong. 9. More, E. and McGrath, M., 2002, An Australian case in e-health communication and change, Journal of Management Development, Vol. 21, pp Rivard-Royer, H., Landry, S., and Beaulieu, M., 2002, Hybrid stockless a case study lessons for health-care supply chain integration, International Journal of Operation & Production Management, Vol. 22, pp ABOUT THE AUTHOR Wei-Shuo Lo is an assistant professor and director at department of public finance, and also is an assistant professor at institute of business and management in Meiho Institute of Technology. He received his MS degree in Industrial Engineering and Management Department at Chaoyang University of Technology in 1997, and received his Ph.D. degree in Information Engineering Department at I-Shou University in His current research and teaching interests are include data mining and supply chain management. He is a member of Chunghua Association of Public Finance, Taiwan Logistics Management Association, Taiwan Fuzzy Systems Association (TFSA), Electronic Business Management Society. (Received August 2009, revised October 2009, accepted November 2009)

7 W. S. Lo: A Practical Framework of Industry-university for Supply Chain Management 247 使 用 遠 距 健 康 照 護 ICT 平 台 之 產 學 合 作 實 務 架 構 於 健 康 照 護 產 業 供 應 鏈 羅 偉 碩 美 和 技 術 學 院 財 政 稅 務 系 與 經 營 管 理 研 究 所 屏 東 縣 內 埔 鄉 美 和 村 屏 光 路 23 號 摘 要 健 康 照 護 目 前 已 經 變 成 一 個 熱 門 的 主 題, 主 要 是 因 為 它 的 範 圍 涵 蓋 不 同 的 科 學 人 與 知 識, 包 含 : 醫 學 病 人 護 士 醫 生 不 同 的 生 命 控 制 系 統 與 資 訊 科 技 健 康 照 護 產 業 連 結 不 同 的 複 雜 事 件, 從 健 康 照 護 系 統 的 輸 入 與 輸 出, 這 些 事 件 逐 漸 發 生 在 產 業 上 不 同 的 位 置, 因 此 這 些 事 件 也 變 成 健 康 照 護 產 業 供 應 鏈 上 的 問 題 因 為 這 些 問 題, 大 學 與 健 康 照 護 產 業 有 產 學 合 作 的 機 會, 學 校 並 且 提 供 了 有 效 的 方 法 來 回 應 健 康 照 護 產 業 上 供 應 鏈 的 問 題 本 研 究 描 述 健 康 照 護 產 業 與 大 學 之 間, 如 何 建 立 一 個 有 效 的 夥 伴 關 係, 並 且 透 過 使 用 遠 距 健 康 照 護 資 訊 溝 通 技 術 (Information Communication Technology,ICT) 的 平 台, 提 供 一 個 基 於 健 康 照 護 供 應 鏈 之 產 學 合 作 的 實 務 架 構 關 鍵 詞 : 產 學 合 作 健 康 照 護 產 業 資 訊 與 溝 通 技 術 ICT 供 應 鏈 管 理 (* 聯 絡 人 :x2134@meiho.edu.tw)