Value Chain Analysis of Healthcare Industry

Healthcare Industry focuses on performing diagnosis, treatment, curing, and prevention of illnesses, injuries, and many other physical and mental diseases and illnesses. Doctors, health professionals, and allied health areas provide healthcare services in the healthcare industry. Today, we’ll discuss the value chain analysis of Healthcare Industry supply chain analysis; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

Synonymous terms for healthcare services in Healthcare Industry

• Public health service
• Tertiary care services
• Primary care services
• Secondary care services

Health Professions in the Healthcare Industry

• Athletic training
• Physical therapy
• Occupational therapy
• Psychology
• Audiology
• Optometry
• Nursing
• Midwifery
• Pharmacy
• Dentistry
• Medicine

The Value chain analysis of Healthcare Industry supply chain analysis would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s the supply chain analysis of Healthcare value chain analysis company example as follows;

Value Chain Analysis of Healthcare Industry

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of Healthcare Industry supply chain analysis. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of Healthcare Industry

Some of the five main primary activities in the value chain analysis of Healthcare Industry supply chain analysis are as follows;

Inbound Logistics of Healthcare Industry

I-Pharmaceutical Companies

Pharmaceutical companies are the top suppliers of medicines, supplements, and many other over-the-counter medicines for customers in the Healthcare Industry. They play a key role in sourcing raw materials and supplies for the production of medicines; manufacturing medicines, and supplying medicines to pharmacies, hospitals, and customers across the world. However, some of the top pharmaceutical companies are as follows;

• AstraZeneca
• Novartis
• AbbVie
• Merck & Co
• Novo Nordisk
• Johnson & Johnson
• Eli Lilly
• Pfizer
• Abbott

II-Research Facilities

Medical research facilities play a critical role in healthcare. Often, their work and role comprises performing medical research on various diseases; finding out their causes and signs; creating research literature, conducting studies, and distributing literature worldwide. The medical labs perform tests and experiments based on their research literature and findings. Some of the main medical research facilities are as follows;

• Columbia University Irving Medical Center
• Southwestern Medical Center, University of Taxes
• Duke University Hospital
• Michigan Medicine
• UC San Diego Health Sciences
• Biomedical Ethics Research Programs
• Cardiovascular Disease and Outcomes Research Program

III-Medical Equipment Manufacturers

Medical equipment, devices, and surgical tools are highly significant for providing healthcare services. Medical equipment manufacturing companies are the main suppliers of tools, equipment, and devices. However, some of the main medical equipment manufacturing companies are as follows;

• Henry Schein
• Ownes and Minor
• Cardinal Health
• AmerisourceBergen
• Medline Industries
• McKesson Corporation

Outbound Logistics of Healthcare Industry

I-Distributors & Wholesalers

There are various medicine wholesale and distribution companies that focus on providing distribution services to pharmaceutical companies. They procure mass quantities of medicines from various pharmaceutical companies; store them in their warehouses; and then distribute them to various pharmacies, hospitals, and other healthcare units based on their required orders.

II-Hospitals

Hospitals and healthcare units distribute healthcare services, medicines, and doctor consultations to patients and sick people. They deal with both tangible (medicine) and intangible (consultation and checkup) products and services to the patients and resolve their problems.

Operations of Healthcare Industry

I-Research Labs

Medical research laboratories study and analyze the research literature of various medical institutes. Based on the theoretical research studies, they perform tests and experiments on a small scale to develop medicines for the diseases. After developing the medicine, they test it on animals and human beings under careful examination to study the results and reactions of the medicine. Before the mass-scale production and distribution of the medicine, it goes through various stages of tests and trials to receive approval from the FDA.

II-Manufacturing Companies

Medicine and medical device manufacturing companies face different types of challenges while producing medical products on a mass scale. They have to source materials from various suppliers worldwide; and carefully manufacture the medicines on a mass scale.

III-Packaging & Labeling

Packaging and labeling of medicines is a highly important operational area in the healthcare industry. Misleading and false labeling and claims would cause millions of dollars of defamation lawsuits against the company. They need to write the right effects and reactions of the medicines without making any false claims.

Marketing & Sales of Healthcare Industry

I-Medical Reps

Medical reps work for various pharmaceutical companies to market and promote their medicines medical devices and equipment. They approach various doctors and healthcare service providers to prescribe their medicines to the patients. Often, they give commissions and expensive gifts to the doctors for prescribing their medicinal products.  

II-Pharmacies & Medical Stores

Pharmacies and medical stores also market and promote the medical products and medicines of various pharmaceutical companies. It is because they directly engage with the end consumers; place the promotional supplements on the counter; and recommend the complimentary products to the patients.

Services of Healthcare Industry

Healthcare industry offers a wide range of services to patients and sick people. Some of them are as follows;

• Diagnosing the diseases
• Offering relevant medicine
• Thorough physical examination
• Performing surgery
• Performing various types of tests
• Consultation and recommendation

Supporting Activities of Healthcare Industry

Some of the main supporting activities in the value chain analysis of Healthcare Industry supply chain analysis are as follows;

The infrastructure of Healthcare Industry

Healthcare Industry has established a very large infrastructure of medical institutes, research facilities, medicine manufacturing companies, medical equipment-producing firms; distribution companies, and supplier networks. Well-organized and developed infrastructure of healthcare companies ensures the smooth flow of various activities and operations from sources, manufacturing, and distribution to the retail of medicine.

HRM of Healthcare Industry

The Healthcare Industry has employed millions of people performing different roles in various countries across the globe. They could be doctors, nurses, cleaning staff, surgeons, medical reps, pharmaceutical manufacturers, technical staff, HR, financial staff, researchers, pharmacists, and many other roles and professionals. Collectively, they play a key role in treating patients directly or indirectly.

Technological Development of Healthcare Industry

Healthcare units and pharmaceutical companies invest billions of dollars in research and development for finding the cure and treatment of various diseases; and producing medical devices. The objective is to serve patients, gain a competitive edge, and earn revenue and profitability. However, it is mutually beneficial for both companies and patients.

Procurement of Healthcare Industry

Healthcare facilities and pharmaceutical companies are highly cautious about ethical sourcing and procurement of the right medicines for customers. They have to follow strict protocols and regulations of the medical industry and the government. In case of non-compliance with ethical practices, would cause a lawsuit, heavy fines, and prison time.

Conclusion: Healthcare Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of healthcare industry; we have realized that Healthcare Industry plays a critical role in serving patients. If you are learning about the Healthcare value chain analysis example company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.