Interview with Dr. Mahender Singh, Research Director, MIT Center for Transportation and Logistics

Dr. Mahender Singh will be presenting his views and findings about the impact of changes in healthcare on the supply chain at the Biotech Supply Chain Academy, September 11, 2008 at the South San Francisco Conference Center. A Research Director at the MIT Center for Transportation and Logistics, he is currently leading two multi-year research projects that are focused on the future of supply chains and healthcare supply chains respectively. For over twelve years, he has worked on multiple global supply chain projects to analyze and redesign supply chain planning systems at Fortune 50 companies. For the past four years, he has been researching the delivery challenges faced by different sectors of the healthcare industry and has taught Operations Management at the University of Tennessee, Knoxville, where he received his Ph.D. He also holds a Master of Engineering in Logistics from Massachusetts Institute of Technology.

Q. Can you tell us about your group and the research you are doing with regards to the biotechnology supply chain?

A. The MIT Center for Transportation and Logistics is involved in researching supply chain issues in various industries and one project launched last year was to look at the issues in the healthcare industry specifically. We wanted to determine how to optimize the supply chain for this industry to deliver care more efficiently by taking a holistic point of view, since we are always focused on how to deliver a product from point 'A' to point 'B' most efficiently. For care to be effective and efficient, different elements have to come together in a coordinated manner and available at the same time. So we expanded the scope of the supply chain to focus on delivery of care and took on a very large project.

Q. What are some of the findings from the research you've been conducting?

A. We found that different players in the system were facing different challenges and struggling to define a sustainable business model. However, very few were looking beyond the traditional boundaries and trying something new; instead most were continuing the same practices despite the main reason being structural flaws in the system. The key lesson for us was that if we don't want to perpetuate this behavior in the future, we must start changing the structure now in order to shape the future. One such structural change that we are looking at right now is the change in the care demand pattern. Our research tells us that people are going to hospitals more for chronic healthcare rather than acute care and we are addressing chronic care needs with acute care practices, which is not optimal or efficient. The data suggests that going forward, with new drugs and ailments etc, by 2020, more than half of the population will suffer from chronic diseases representing 80% of health care dollars. This will be the biggest component of healthcare needs from a demand point of view.

Q. How do you see these findings transform the biotechnology supply chain?

A. If we are going to have an optimal and efficient supply chain, then the current system needs to change to accommodate the new demand. We need to think about the role of clinics, doctors, pharmaceutical manufacturers, retailers etc, as well as the role of technology. In the very near future, it will be possible for us to perform a variety of tests at home (blood work, urine, stool etc.) and load the results to a secure website and it will tell you if seeing a doctor is crucial or if your situation can be taken care of without an office visit. Doctors will have a role to play that isn't as immediate as it currently is, meaning they may not automatically be the first line of defense (in a chronic care situation).

Having this personalized care delivered at home is a perfect catalyst for patients to trigger the demand for biotechnology products because of their ability to personalize medicine. As technologies evolve and people get accustomed to personalized care, medicine will become increasingly personal with certain aspects moving into the homes (diagnostic tools etc.). The proliferation of products (due to personalization) and the stringent product handling requirements, the future supply chains will need to be very sophisticated with regards to deliveries to minimize errors, prevent tampering, and ensure quality.

And as the power shifts more to the patient in the future, we need to efficiently accommodate rapidly growing needs of diverse medical products in the home, (ie delivering their drugs, med devices etc.). We also need to focus on the reverse supply chain as well -- how will we best remove hazardous waste etc. from the home?

Q. And how is your research group addressing these issues?

A. Ultimately, the mission of the MEHD Group ((The MIT Efficient Healthcare Delivery Group) is to envision the future of the healthcare system and create new knowledge and innovative business practices that will help improve healthcare delivery everywhere. We assume that transformative innovation in the healthcare supply chain is essential, and that in order to survive and succeed, industry participants must be attuned to new developments and in command of new ways of doing business.