When we talk about supply chains, we may conjure up images of manufacturing plants, warehouses, trucks and shipping docks. There is another, truly unique supply chain for a product vitally important to health care and life, and it is very volatile at the moment: the blood supply chain.
Human blood, unlike computers, smartphones and cars, cannot be manufactured, and no substitute for it has yet been invented. At the same time, blood, like fresh produce, is a perishable product, with platelets lasting five days and red blood cells 42.
This blood industry is now at a crossroads, due to fluctuating demand over the past decade. Hospitals are now requiring less blood as compared to a few years ago because of changes in medical practices, leading, at times, to a surplus in overall supply. In 2011, a total of 1.2 million fewer units of blood were used in hospitals as compared to 2009, bringing them a US$274 million savings in terms of costs. This has resulted in a relatively strong supply and a weak demand for blood at the blood banks, which gives hospitals the upper hand while negotiating with the suppliers.
