Today we had the honor and privilege of hosting Mr. Jeff Meyer, CEO of Blood Services for the Red Cross for MA and CT, in my Humanitarian Logistics and Healthcare class at the Isenberg School of Management.
He was fabulous. First some background: Jeff received his undergrad degree at Babson and his MBA from UCLA's Anderson School of Management, where he focused on (bravo) operations management. How can you not love a speaker who comes in and starts talking about linear programming models and how in many of the team projects at UCLA students wanted to work on Red Cross projects because of the challenging problems.
Mr. Meyer drove almost 2 hours from Dedham to speak to my class and we kept him overtime for about 40 minutes because his knowledge of blood supply chains is vast. He has worked for the Red Cross for 16 years and, would you believe, he was a consultant for the Red Cross and was offered a job with this organization the day before 9/11. He accepted the job since after the terrorist attacks (and he was in DC and could not get back home for a week) since he decided he wanted to help humanity.
He had worked in California for Red Cross blood services and was responsible for managing the construction of a $41 million facility for blood services in southern CA.
Mr. Meyer had the class (and me) on the edges of our seats informing us of how the demand for blood in the U.S. has declined since 2008. He spoke of negative drivers and positive drivers and the consolidation of blood centers. The Red Cross now supplies about 40% of the blood in the US and has closed 3 of its 5 testing centers. He spoke about that there are "wet" surgeons and "dry" surgeons, with the former liking more transfusions whereas the latter utilizing fewer in their surgeries. He stated that in studies, more transfusions do not yield better outcomes.
He showed us a map of the US marking where there was Red Cross coverage and presence and as Mr. Lou Wigdor, our Isenberg School writer and editor noted, the white parts corresponded to the oil states!
He also emphasized how efficiencies can be gained from having a bigger collection site (fewer vehicles needed and there is greater potential for good service and more spread out and comfortable service as donors arrive). He noted that, although some perceive blood as being a commodity, it is not and there are many differentiated "products" that it provides.
The challenges of this supply chain are immense because of the perishability - with red blood cells having a shelf life of 42 days and platelets only 5 days. Platelets are needed to treat cancer patients and the demand for platelets is growing because of the aging population.
From 2008 and prior there were many cases of blood shortages in the U.S. but the scenario has changed due, for example, to the recession and fewer elective surgeries, more individual blood banking, and medical advances that result in less loss of blood.
He even described a Red Cross blood app which has been very successful - 80% of those who elect to give blood through the app show up for appointments whereas among those who call for an appointment only 50% do. Clearly, there are also challenges with supply meeting demand and risk associated with donors not showing up.
Interestingly, he also shared with us that different hospitals may have different preferences even as to the kinds of testing that is done on the blood which can cost $200 per pint.
Out of $3billion in annual costs of the Red Cross, $2billion of that is for blood services.
I had done research on blood supply chains with my former doctoral students, Amir H. Masoumi and Min Yu:
- Supply Chain Network Operations Management of a Blood Banking System with Cost and Risk Minimization, Anna Nagurney, Amir H. Masoumi, and Min Yu, Computational Management Science 9(2) (2012) pp 205-231,
- Supply Chain Network Design of a Sustainable Blood Banking System
Anna Nagurney and Amir H. Masoumi, in Sustainable Supply Chains: Models, Methods and Public Policy Implications, T. Boone, V. Jayaraman, and R. Ganeshan, Editors, Springer, London, England (2012) pp 49-72.
I'd like to thank him for sharing with the class such illuminating insights about this life-saving supply chain, for which logistics plays a fundamental role.