American Red Cross: Blood Center

Bus Adm 786 Spring 2013

A Lubar School Supply Chain Student Project

Hongping ZhuFadia Ahlat

Erik WrolstadAwais Mazhar

Unmesh Deshpande

Scope

• Company Profile

• Blood Supply Chain

• Problems Faced

• Improvement opportunities & method

• Proposed solution

• Inferences & Closing Remarks

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Company Profile

• A humanitarian organization, not a government agency

• The American Red Cross is a network of-– More than 600 locally supported chapters– 36 Blood Services regions and 7 Blood Services divisions– Nearly 20 International Offices

• What we do--disaster relief, supporting America’s military families, health and safety training & education, life saving blood and international services

• Mission vision of ARC – to fulfill the needs for the most safe, reliable and cost-effective blood,

plasma and tissue services

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Blood Supply Chain• Life cycle of blood products

– Platelets: the longest shelf life is 7 days. – Red Blood Cells: 35-42 days at refrigerated temperatures – Plasma: can be stored frozen for up to one year

• Whole blood donation– occurs at a blood bank but they are often set up at a location in the

community such as a shopping center, workplace or school– usually stored in a flexible plastic bag that also contains certain

chemicals

• Blood inventory management– The optimal inventory level for a specific blood is found as a

compromise between the shortage rate and the outdate rate– Time availability and careful preservation of blood

• Blood banking and distribution system

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Problems Faced

• Excess Inventory

• Shortage in supply

• Distribution network problems

• Supply chain strategy options

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Improvement opportunities & method

• Excess Inventory:– Short life of some blood products

– More accurate forecasting

• Shortage in Supply– Reduce Lead-time

– More donations

– More accurate forecasting

• Distribution network problems– Root Cause

– 6 Hospitals making up 40% of inventory availability

– Inaccurate & unreliable forecasting: Contingencies

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# Business Aspect Description # Parameter Table Remark

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A

• Template used for brainstorming

Proposed Solution

• Making appointments for the 85% of repeat donors

• Increase the integration of information about the Hospital blood banks demand

• Competitive pricing of blood products – ensure efficient distribution and minimize outdating.

• Collaborate with the Centers for Disease control and Prevention (CDC)

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Looking ahead

• Increasing number of paid employees over volunteers

• Developing a phone/online scheduling system, also onsite scheduling

• Contingency planning for excess demand

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• Inventory Sufficiency and Increasing Fill Rates

• Reduction of costs incurred from shortage rates and outdate rates: lower shortage and outdate rates

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Benefits Anaysis

Benefits Analysis

• Commit to a Better Pricing Strategy:

• Have a more organized and stable distribution network system:

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• Recap:– Inventory management problems– Current inventory policies– Suggestions– Pricing policy

• Concluding statement:

The ARC in Cleveland should create a plan that combines a rolling quarterly inventory plan that also takes into account season trends or needs.

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Inferences & Closing Remarks

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Thank You!