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Question

Your efforts with MLD Hospital have paid off. The corporation has hired SMP and your staff to provide supply chain management consulting services. Your team has begun analyzing the existing processes, and you have been tasked with developing the purchasing policies and procedures with focus on ethics in the supply chain.

 

Remember: From a supply chain management perspective, a company produces services or products. Clearly, MLD Hospital produces a service. This means that sourcing analysis must consider the raw materials necessary for producing this service (e.g., bandages, needles, blood, and medical equipment).

 

Using course materials and other resources, develop a paper for the hospital management consisting of the following sections:

1.Discuss the importance of identifying the best suppliers by explaining the impact of source selection on supply chain performance.

2.In conjunction with number 1, discuss whether the hospital will insource or outsource its sourcing needs.

3.Develop a high-level ethics policy for the purchasing department at MLD Hospital, identifying general responsibilities and prohibited behaviors.

 

RETURN FLOW AND TECHNOLOGY

Introduction

The supply chain sustainability is progressively recognized as a key section of corporate obligation. This paper seeks to examine the development of purchasing policies and procedures with focus on ethics in the chain of supply. It will discuss on the significance of identifying the best suppliers by explaining the impact of source selection on the performance of the supply chain. It will also investigate if the hospital will outsource or insource its sourcing needs. Further, it will develop a high-level ethical policy for the department of purchasing at MLD Hospital by identifying general responsibilities and prohibited behaviors.

Importance of identifying the best Suppliers by explaining the impact of Source Selection on Supply Chain Performance

The award choice is based on assessment factors and substantial sub factors that are custom-made to the procurement. The evaluation factors and momentous sub factors should denote the key areas of significance and emphasis in the MLD source selection decision. It should fund important contrasts and discriminations between contending proposals. The evaluation factors should also consider the price of the commodities and the quality of the hospital supplies. To get the best supplier the company should choose a company that is reliable, have good quality of supplies, they have value for money, they are financially stable, and have clear communication systems.

In conjunction with number 1, discuss whether the hospital will outsource or insource its sourcing needs.

The company can outsource its sourcing needs. The outsourcing will aid in improving performance if they get the right kind of service providers (Govindan, K. et al. 2014). The decision looks beyond cost savings to consider expediency and quality as well as the long term goal of the company. Thus, the enlargement of healthcare industry is a wakeup call that calls for the hospitals to reconsider their strategies as pertaining to outsourcing and insourcing. The MLD Company should partner with external firms to provide IT services and a revenue cycle management corporation.

However, the outsourcing of services and the capabilities of partnering is done on the basis of value. The MLD management should ensure that every service that is outsourced brings the perceived value to the company (Grob, S. et al. 2014). For example, the hospital should ensure that they get IT services from people who have previously used it. To achieve the best, they should set the threshold of wining contracts and tenders through a competitive process.

Develop a high-level Ethics Policy for the Purchasing Department at MLD Hospital, identifying General Responsibilities and Prohibited Behaviors.

Ethics is the moral principles that governs or influence the conduct of behavior. It is based on the principles that relates to procurement such as integrity, fairness, and transparency. It is necessary to check on areas of hazard in the procurement cycle. The areas of risks consists of budgeting, perceived need, financial approval policy, specification development, evaluation criteria, pre-qualification, sourcing or invitation to tender, negotiation, offer evaluation, contract award, goods receipt, post award changes to specifications, invoice certification, and decentralization procurement organization.

The company should have a potential warning signs of unethical practices such as missing files, poor keeping of records, overcharging by the supplier, deviations from correct procedures, and confrontation to audit, unwarranted secrecy, supplier cartels, and overcharging by the suppliers. However, the management has tools to detect and prevent the unethical practices. First, the management has a responsibility of maintaining utmost standards of integrity in their dealings. Secondly, they should advance a code of ethics for all staffs to follow. Thirdly, the company should laydown procedures so as to avert fraud. Fourthly, the firm should ensure that there is fairness in policies and procedures so as the activities that expose the organization to fraud. Fifth, the company should have a strong internal control system and accounting controls.

The stakeholders in the MLD hospital should commit to behaving honorably in professional activities and all aspects of job (Marshall, D. et al. 2015). They should conduct themselves in a custom so as to uphold self-confidence and trust in the veracity of the acquisition process. They should punish any person that tries unscrupulous methods intended to cause undue advantage of others. Also, they should avoid any conflict of interest in the process of procurement. Lastly, they should ensure that they uphold the association’s legislation, standards and policies.

Ethical principle and concepts include due diligence, transparency, confidentiality, integrity, fairness and impartiality, and respect to all regulations and rules of the company. The prohibited behaviors include avoiding short-term or emergence orders or procurement. They should also avoid cost-plus contracts. In a situation that they cannot avoid the contracts, special care should be exercised to verify the supplier’s expenses.

Conclusion

The supply chain sustainability is gradually recognized as a key section of corporate obligation. The paper has examined the development of purchasing policies and procedures with focus on ethics in the chain of supply. It has also discussed on the significance of identifying the best suppliers by explaining the impact of source selection on the performance of the supply chain. It has investigated the benefit of outsourcing its sourcing needs. Further, it has developed a high-level moral policy for the department of purchasing at MLD Hospital by identifying general responsibilities and prohibited behaviors.

References

Govindan, K., Kaliyan, M., Kannan, D., & Haq, A. N. (2014). Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, 555-568.

Grob, S., & Benn, S. (2014). Conceptualising the adoption of sustainable procurement: an institutional theory perspective. Australasian Journal of Environmental Management, 21(1), 11-21.

Marshall, D., McCarthy, L., Heavey, C., & McGrath, P. (2015). Environmental and social supply chain management sustainability practices: construct development and measurement. Production Planning & Control, 26(8), 673-690.

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