Chloe Kim, Catherine Gao, Amba Gujral, Willa Ni, Ashley Wright, Felipe Caro.
Blood and blood products (such as plasma and platelets) have a unique and challenging supply chain because of three major reasons. The supply of blood fully relies on human donations and is not a product that can be manufactured. Blood is a perishable product, especially platelets must be used within 5 days of donation, and red blood cells can only be stored for 42 days [1]. Lastly, inaccuracies of supply and demand can become a matter of life and death as blood is a critical input into a wide range of medical procedures and services, including surgeries, trauma care, and therapeutic intervention.
The supply chain for blood should ideally operate as a fully responsive network that can react to uncertain demand with a short lead time. However, the current blood supply chain in the US is rather fragmented including a diverse layer of stakeholders. The main stakeholders involved are: donors, blood banks such as the American Red Cross (ARC), hospitals, and patients. Figure 1 is a simplified diagram of each player’s role and the processes involved.
Figure 1. Blood supply chain in the US
Large blood banks such as the ARC have distribution centers where they can pool supply before it is shipped to hospitals. Smaller blood centers such as the UCLA Blood and Platelets Center (BPC) operate a more localized system. The UCLA BPC is one of the main blood centers in the greater Los Angeles area but it struggles to meet its daily demand. The UCLA hospitals share a weekly forecast with the UCLA BPC, which is usually able to satisfy 75% of the daily demand from its own stock and must source the remaining 25% from the ARC. The two entities (ARC and UCLA BPC) don’t have a shared IT system and communication takes place via emails and phone calls. The UCLA BPC also has a partnership with UC Irvine in order to share any excess supply or demand.
In contrast to the US, the UK's blood supply chain has transitioned to a centralized and demand-driven (i.e., pull) model. The pull approach starts with digital information that communicates real-time demand from hospitals, which is then passed on to distribution, collection, and finally supply as shown in Figure 2. The National Health Services (NHS), UK’s healthcare organization, calls it a comprehensive “vein-to vein” model [2]. The implementation relies on a vendor managed replenishment system that monitors stock levels every 30 minutes from 70+ participating hospitals. The system enables the NHS Blood and Transplant service to identify the optimal stocking levels and it automatically generates replenishment orders. Such optimization of inventory and replenishment has improved the utilization of fridges and freezers, whilst reducing the level of shipments required to rebalance stock across the network. The transition to the new supply chain has brought savings in excess of £50m per year [3].
Figure 2. The UK vein-to-vein system.
There are several lessons the blood supply chain in the US can learn from its counterpart in the UK. On the demand side, pooling inventories should be the first step to reduce donor recruiting cost, inventory holding cost, and wastage. For instance, hospitals around the greater Los Angeles area could integrate their blood supply chains to benefit from aggregation. According to the UK example, reducing the number of hospitals holding inventory can achieve a 20% reduction in delivery cost and 30% less wastage. On the supply side, a centralized supply chain would create opportunities to improve forecasting at the hospital and blood group level and would allow consolidating donor records and quality monitoring. Finally, the supply chain could be complemented with a unified mobile app to increase user acquisition and retention and dynamically incentivize registrants based on blood types needed. Donate now!
[3] https://nhsbtdbe.blob.core.windows.net/umbraco-assets-corp/1652/blood-2020.pdf
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