Blood Supply Chains, Risk Minimization, and Healthcare Operations

Blood is a life-saving "product" and, at the same time, it is highly perishable. Its delivery is also time-sensitive. In addition, since blood is not manufactured, there is risk associated with the supply side of the blood supply chains; that is, the blood drive sites.

Blood service operations are a key component of the healthcare system all over the world. According to the American Red Cross, over 39,000 donations are needed everyday in the United States, alone, and the blood supply is frequently reported to be just 2 days away from running out. Of 1,700 hospitals participating in a survey in 2007, a total of 492 reported cancellations of elective surgeries on one or more days due to blood shortages. While for many hospitals, the reported number of blood-related delays was not significant, hospitals with as many days of surgical delays as 50 or even 120 have been observed. Furthermore, in 2006, the national estimate for the number of units of whole blood and all components outdated by blood centers and hospitals was 1,276,000 out of 15,688,000 units.

Considering also the ever-increasing hospital cost of a unit of red blood cells with a 6.4% increase from 2005 to 2007 further highlights the criticality of this perishable, life-saving product. The New York Times reported in 2010 that this criticality has become more of an issue in the Northeastern and Southwestern states in the United States since this cost is meaningfully higher compared to that of the Southeastern and Central states. Moreover, hospitals were responsible for approximately 90% of the outdates, with this volume of medical waste imposing discarding costs to the already financially-stressed hospitals.

In the paper, "Supply Chain Network Operations Management of a Blood Banking System with Cost and Risk Minimization," my doctoral students, Amir Masoumi, and Min Yu, and I, developed a network optimization model for the complex supply chain of human blood. In particular, we considered a regionalized blood banking system consisting of collection sites, testing and processing facilities, storage facilities, distribution centers, as well as points of demand, which, typically, include hospitals.

Our multicriteria system-optimization approach on generalized networks with arc multipliers captures many of the critical issues associated with blood supply chains such as the determination of the optimal allocations, and the induced supply-side risk, as well as the induced cost of discarding the waste, while satisfying the uncertain demands as closely as possible. Indeed, since it may be difficult to predict the demand, it is essential to capture the uncertainty associated with the demand in an appropriate modeling and computational framework.

This research we will be presenting at the POMS Conference in Reno, Nevada, as well as at the Northeast Regional INFORMS Conference at UMass Amherst.

The supply chain network model for the optimization of blood supply chains is part of our growing body of research on healthcare-oriented supply chains with applications even in disasters. For example, results in the study, "Supply Chain Network Design for Critical Needs with Outsourcing," co-authored with Min Yu and Dr. Patrick Qiang, can also be applied in disaster relief.

It is especially gratifying to see students so engaged in research that can have a positive societal impact!