Latest on Blood Supply Chains

This has been an amazing day, with not only the solar eclipse taking place,

 

and we had a wonderful turnout to view the solar eclipse, organized by Finance Professor Ben Branch of the Isenberg School,

but we also had two papers published today: Supply Chain Network Capacity Competition with Outsourcing: A Variational Equilibrium Framework, Anna Nagurney, Min Yu, and Deniz Besik,  which was published in the September issue of the Journal of Global Optimization (JOGO):

and Mergers and Acquisitions in Blood Banking Systems: A Supply Chain Network Approach, Amir H. Masoumi, Min Yu, and Anna Nagurney, which was published in the November issue of the International Journal of Production Economics (IJPE).

There has been much going on in the blood services industry in the United States and in January I had an article on the topic published in The Conversation: Uncertainty in Blood Supply Chains Creating Challenges for the Industry, which was reprinted in many news outlets.

Our IJPE article provides not only a new blood supply chain network model that incorporates frequencies of activities such as collection, testing, and distribution, but it also introduces three synergy measures to determine whether or not a merger or acquisition in this industry would be effective.  The case study examines a recent pending merger uner both status quo and disaster scenarios. The IJPE article is already garnering attention and was featured in a news post at the Pamplin School of Business at the University of Portland, where one of my co-authors, Professor Min Yu, is a faculty member.  Below is a photo of the three authors of this paper, with the lead author being Professor Amir H. Masoumi of the School of Business at Manhattan College. Both Dr. Masoumi and Dr. Yu are Isenberg School of Management UMass Amherst PhD alums (and they were also my doctoral students, with whom I continue to collaborate through the Supernetwork Center).

And, I am very excited that I will be delivering a semiplenary talk: Blood Supply Chains: Challenges for the Industry and How Operations Research Can Help  at the International Conference on Operations Research in Berlin, Germany, September 6-8, 2017.  It is an honor to be on the list of semiplenary speakers at this conference, and great to see several friends on the list!

I have been hard at work on my conference presentation, which will describe the latest on blood supply chains from network optimization models to game theory models since this healthcare sector is faced with increasing competition.

Hope you can make it to the conference and, if not, I will be posting my presentation closer to the conference date.

Mr. Jeff Meyer, CEO of Red Cross Blood Services for MA and CT at the Isenberg School

Bringing expert speakers to share their practical know-how and experiences is fabulous for students' education!

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!

 I was very impressed that he multiple times spoke about the importance of network optimization, since this is what we have been learning in the class for the past 2 weeks.

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.

Mr. Jeff Meyer brought out so many interesting research questions today in his brilliant lecture that we will be kept very busy.

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.