International Journal of Pharmaceutical and Healthcare Marketing

An investigation of healthcare supply chain management and patient

responsiveness: An application on public hospitals
Abdussamet Polater, Osman Demirdogen,
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Abdussamet Polater, Osman Demirdogen, (2018) "An investigation of healthcare supply chain
management and patient responsiveness: An application on public hospitals", International Journal of
Pharmaceutical and Healthcare Marketing, https://doi.org/10.1108/IJPHM-07-2017-0040
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Application on
An investigation of healthcare public
supply chain management and hospitals

patient responsiveness
An application on public hospitals
Abdussamet Polater Received 26 July 2017
Revised 24 January 2018
A.C.Ç. School of Civil Aviation, Erzincan Binali Yıldırım Universitesi, 22 February 2018
Erzincan, Turkey, and Accepted 23 May 2018

Osman Demirdogen
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Faculty of Economics and Administrative Sciences,

Ataturk Universitesi, Erzurum, Turkey

Abstract
Purpose – This study aims to focus on the impact of supply chain (SC) integration, demand forecasting and
supplier performance on patient responsiveness at public hospitals through the mediating role of SC flexibility.
Design/methodology/approach – To measure the above stated correlation, a Likert scale with five
points and 23 items was used and structural equation modeling was applied. The scale was applied to public
hospitals. Statistical software programs (SPSS 18 and LISREL 8.8) were used to analyze the data. The
analysis of reported statistics is based on a sample of 129 logistics and SC specialists at public hospitals in the
cities representing different regions of Turkey.
Findings – The research hypotheses are supported as a result of the analysis. The research reveals that SC
flexibility has a mediation effect between SC integration, demand forecasting, supplier performance and
patient responsiveness.
Practical implications – The increasing number of population, geopolitical position, migration waves,
man-made and natural disasters lead Turkish health-care industry to have effective SC plans to satisfy the
patients’ needs successfully and reduce the effects of these fatal events. In this sense, SC flexibility is an
important factor for health-care industry in responding changing patient demands. At this juncture, the main
point is to bring required resources together in the right place and at the right time. Otherwise, health-care
institutions cannot serve the affected people because of the non-availability of supply. To achieve it, public
health-care institutions should give more importance to the SC principles.
Originality/value – Success in SC flexibility in health care can directly affect patient welfare. Thus, focusing
on the patient responsiveness is an important aim of the health-care industry. However, it was determined that less
attention has been given to understanding patient satisfaction as a result of SC operations. The results indicate
that patient responsiveness improvement should be included into strategic plans, and SC efforts should be used as
a means of satisfying patient needs quickly. To the best of our knowledge, this is the first study investigating the
mentioned relationships at public hospitals. Findings of this paper will have a significant contribution for
researchers and health-care professionals in understanding the impact of SC to patient responsiveness.
Keywords Supply chain management, Supply chain flexibility, Supply chain integration,
Supplier performance, Health-care industry
Paper type Research paper

International Journal of
1. Introduction Pharmaceutical and Healthcare
Marketing
Today’s business environment is more turbulent, complex and uncertain as a consequence © Emerald Publishing Limited
1750-6123
of rapidly evolving technology, disasters, volatile market conditions and increased supply DOI 10.1108/IJPHM-07-2017-0040
 IJPHM chain (SC) complexity. Customers are expecting better quality and delivery conditions,
improving responsiveness, more variety and reliability from their suppliers (Bowersox et al.,
2013).
Health-care organizations are looking for effective methods to improve operational
efficiency and reduce expenditure without disrupting patient care services (Msimangira,
2010). It is regarded that the performance of health-care operations results in life or death of
people, whereas it is only profit or loss in other sectors. In recent years, SC management
(SCM) has become prevalent in the health-care sector because of its impact on minimizing
waste and medical errors, enhancing quality of care, operational efficiencies and customer
satisfaction (Byrnes, 2004; Schneller and Smeltzer, 2011). For example, the Ontario Hospital
Association Task Force saved more than CAD 300m a year as a result of SCM improvement
(Msimangira, 2010).
The basic motivation of a health-care SCM (HSCM) is initiated by the idea that health SC
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(HSC) performance can be achieved by intensive integration between external partners and
internal processes. Therefore, while organizations integrate their internal capabilities to
provide a better service for the patients on the other hand they benefit from their partners’
resources.
Turkey’s health care and pharmaceutical industry has been developing rapidly since
the 2000s, and it is the 29th largest pharmaceutical market in the world and the second
largest in Central/Eastern Europe. In 2016, Turkey spent $39bn on health care or
around 5.5 per cent of GDP and it is projected to reach $50.9bn by 2020 (US ITA, 2016).
Turkey is exposed to a large number of natural disasters such as earthquakes, floods
and storms. Because of Turkey’s geopolitical position, man-made disasters such as
terrorist attacks, migration waves and epidemics have been increasing in addition to
the natural disasters. In addition, health-care sector has been developing and
investments are increasing accordingly. Therefore, SC flexibility is an important factor
for Turkish health-care industry to response changing patient demands successfully
and reduce the effects of these fatal events. At this juncture, the main point is to bring
required resources together in the right place and at the right time. Otherwise, health-
care institutions cannot serve the affected people because of the non-availability of
supply. To achieve it, public health-care institutions should give more importance to
the SC principles. This study focuses on the impact of SC integration, demand
forecasting, and supplier performance on patient responsiveness at public hospitals
through the mediating role of SC flexibility. To capture the fundamental resources,
capabilities of hospitals and their suppliers, we developed an integrative model based
on network theory and the resource-based view. To the best of our knowledge, this is
the first study investigating the aforementioned relationships at public hospitals. In
this sense, the research investigates two specific questions. First, how external partners
have an impact on patient responsiveness? Second, how hospitals’ internal capabilities
have an impact on patient responsiveness? For this purpose, empirical data were
collected from hospitals. To measure the above stated correlation, a Likert scale with
five points and 23 items was used. We believe that the research findings will have a
significant contribution for researchers and health-care professionals.

2. Healthcare supply chain management

The HSC is highly fragmented (Smeltzer Larry, 2006). In HSC, each SC stage tends to behave
independently, and it disrupts the SC operating as an integrative system. For instance,
physicians demand preference items and give little importance to the cost. In contrast,
hospital managements are interested in reducing operating costs. On the other hand,
 manufacturers and distributors want to push their products to increase profit and gain Application on
market share (Hana and Sethuraman, 2005). public
Health-care providers that produce health-care services are considered as central
units in the HSC. The aim is to provide high quality of care at reduced cost (Hana and
hospitals
Sethuraman, 2005). It is estimated that SC constitutes 25-30 per cent of operational costs
for hospitals (Hana and Sethuraman, 2005; Roark, 2005; Nachtmann and Pohl, 2008).
Finding an equilibrium between cost and quality in health care has been a highly
disputed issue for a long time. Elimination of some of the costs in the HSC without
sacrificing health-care quality is considered as a vital element. It is revealed that the
percentage of SC costs among total spending is greater than the retail and grocery
industry SCs (Nachtmann and Pohl, 2008). Although the amount of operational costs
and the fact that many industries have embraced SCM concept, health-care sector has
recently explored its potential rewards (Wigglesworth and Zelcer, 1998; Natarajan,
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2006; Su, et al., 2011).

Every industry has unique SC characteristics. HSC is considered different than those
in other industries from various aspects. For instance, patients’ participation to
operations, high level of uncertainty and customization of services can be given as
examples. The Center for Innovation in Healthcare Logistics’ (CIHL) research identifies
several important characteristics of the HSC: talent rich, information poor, strategic,
collaborative, expensive and immature (Nachtmann and Pohl, 2008). HSCM is regarded
as a more complex system than other sectors. HSCs have to provide adequate and
precise medical products suitable to patients’ needs (Beier, 1995). HSCs are highly
regulated and HSC operations require multidisciplinary collaborative approach (Van
Raak et al., 2005). Moreover, in health-care industry; products are mostly ordered by
frontline health workers such as physicians and nurses; maximizing the availability of
products is seen more important than minimizing the costs of holding inventory;
procurement is based heavily on the clinical preferences of physicians not only on cost-
benefit analysis; patients have an important role in the decision-making process of their
physicians who act as their agents; it is still a fragmented industry with no real
leadership at any stage. All these unique and complex conditions effect hospitals’
prediction of patient mix, demand and control over production schedules. The
sophisticated and dynamic feature of HSCM makes evaluation of performance more
difficult (Burns, 2002).
Although a hospital’s main service is health care, there are other components
accompanying it such as catering, laundry, maintenance, cleaning and patient
transportation (Baltacioglu et al., 2007). Products used in the delivery of health care range
from disposable gauze pads and cleaning materials to cutting-edge technology medical
devices. This complex structure entails the use of a large variety of products in hospitals.
Therefore, HSCs have to be established in a way that they can smoothly manage various
types of products (Kros and Brown, 2013). The variety of products needed entails
sophisticated relationships among SC partners. Despite there are many stakeholders in the
chain, the SC literature generally focuses on four main players: providers, purchasers,
patients and producers (Pitta and Laric, 2004).
In HSC, the role of producer is to manufacture medical components such as implants and
medical devices. Purchasers consist of wholesalers, distributors and group purchasing
organizations (GPOs). They facilitate the delivery of products and payment among SC
members. Hospitals buy goods or services either directly from producers or through GPOs
to fulfill their services (Min, 2015). Patients, who expect effective treatment at the right time,
 IJPHM are the critical stakeholders in the HSC. The performance of the other SC members is a
critical component of their overall medical care experience.
Pharmaceutical sales are expected to grow from $7.6bn in 2015 to $9.8bn by 2020. This
represents an annual growth rate of 5.2 per cent in Turkey. In 2015, Turkey spent $39bn on
health care, or around 5.5 per cent of GDP. Health-care spending is forecast to grow to
$50.9bn by 2020. The increasing population, per capita income, migration and chronic
diseases lead the increase in health-care spending (US ITA, 2016). On the other hand, the
number of medical institutions has increased from 1,156 in 2002 to 1,510 in 2016. While the
total number of beds was 164,471 in 2002, it was 217,771 in 2016. However, the number of
hospital beds per 10,000 population is behind the European countries, and Turkey is ranked
as 22nd country in the Europe with 26.6 beds average. The proportion of total health
expenditure to the GDP (per cent) was 4.7 in 2002, it decreased to 4.6 in 2016 (Health statistics
yearbook 2016, 2017). Turkish Health Services Industry consists of local, regional and
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central management health units; pharmaceutical and medical equipment supplier

companies; health service providers; and health service consumers. The study conducted by
Polater et al. (2014) indicating the model of SC for the Turkish public health sector is
depicted in Figure 1.
The health-care sector in Turkey is primarily managed by the Government through the
Ministry of Health (MoH), universities and other semi-public organizations. In Turkish HSC
setting, the Public Hospitals Administration of Turkey (PHAT) plays a critical role through
the central purchasing system. Because of the highly regulated nature of health-care sector,
providing the requirements necessitates a separate strong management to guarantee
flawless services for health institutions. The largest share of medical device purchases in
Turkey belongs to the public sector and most of these purchases are made by the PHAT
(under the Ministry of Health). Central purchasing organizations (CPOs) buy products and
services from various suppliers to fulfill the requirements of the health-care providers
and hospital departments and patients. In addition to the central purchasing, “negotiated
procedure” and “direct procurement” are the most common ways of supplying required
items for the public hospitals.

Figure 1.
Polater’s Turkish
health-care SC model
 The health transition program in Turkey increased the usage of information systems which Application on
facilitate the dissemination of the data between health-care institutions and suppliers. In public
Turkish health-care industry, information systems such as Turkish Pharmaceutical and
Medical Equipment Information Bank, Medula System and the Pharmaceutical Surveillance
hospitals
System are used as a part of SC integration process. The main aim of this program is to
accomplish the processes such as tender, purchase, shipment, storage and payment
electronically. These systems lead SC integration among public hospitals, CPOs and
suppliers.

3. Literature review and hypothesis development

As mentioned in the previous section, the aim of this paper is to explore the relationships
between SC flexibility, SC integration, demand forecasting, supplier performance and
patient responsiveness. Conceptual model and construct variables development will be
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explained in the literature review.

3.1 The relationship between supply chain integration, supply chain flexibility and patient
responsiveness
Michael E Porter lays out the theoretical foundations of SC integration in “value chain model”.
Value chain is considered as an accumulation of interdependent activities. The value activities
are connected with linkages within the chain to lead competitive advantage through
optimization and coordination (Porter, 1985). SCM particularly includes communications,
coordination, long-term relations and cross-functional teams (Altay et al., 2009). According to
Altay and Ramirez (2010), SC wide action is necessary in especially disaster situations. In this
respect, they point out the importance of integrated effort of SC members to respond
unexpected circumstances (Altay and Ramirez, 2010). Effective SCM requires the integration of
organizational (internal) functions and linking them with external members such as suppliers
and customers to achieve superior SC performance. SC integration is regarded as a complex
task because it entails the coordination among an array of different organizations for the flow
of product, information and finance. The expected contribution stemming from SC integration
is to focus on a firm’s core competencies and establish seamless communication between
upward and downward sides of SCs (Kim, 2009).
Increasing competition for superior customer service makes the SC integration more
important, as it facilitates flexible and responsive SC applications (Frohlich and Westbrook,
2001). According to Droge et al. (2004), there is a relationship between SC integration and SC
flexibility. Successful SC integration enhances product development time, product cycle
time, volume flexibility and delivery speed (Droge et al., 2004). Strategic partnerships among
SC members is a pivotal issue to attain flexibility with the purpose of responding to rapidly
changing market conditions (Simatupang and Sridharan, 2002). Inadequate SC integration
may lead to the longer delivery times and lowered customer service (Lee et al., 1997).
SC flexibility is defined as the firm’s capabilities to configure and manage the SC to
respond to a rapidly changing environment in an effective and efficient manner (Pujawan,
2004). Sourcing flexibility is a crucial element for organization’s SC process. It refers to
availability and accessibility of different suppliers and the capability of procurement
procedure to react to changing conditions to provide required components by customers.
Effective integration with suppliers improves a company’s responsiveness to fluctuating
demand and is concerned as a key determinant of sourcing flexibility (Jack and Raturi, 2002;
Gosling et al., 2010).
SC integration has an impact on customer responsiveness. Narasimhan and Jayaram
(1998) found a positive relationship between SC integration and customer responsiveness
 IJPHM (Narasimhan and Jayaram, 1998). Stank et al. (1999) determined that companies that have
high levels of logistics integration are more effective in terms of meeting key customers’
needs, accommodating special service requests, and new product introductions (Stank et al.,
1999). Frohlich and Westbrook’s (2001) investigation supports Stank’s findings indicates
that high level of performance in delivery time, productivity, customer service and quality is
a result of successful supplier and customer integration (Stank et al., 1999; Simatupang and
Sridharan, 2002).
Responsiveness is considered as “the simultaneous achievement of flexibility and
delivery performance” (Hallgren and Olhager, 2009). While responsiveness was considered
as an achievement of a single company in the past, today it is recognized that more
participants are involved in responsiveness efforts through supplier and customer
integration (Flynn et al., 2010). Based on our literature review on SC integration, SC
flexibility and customer responsiveness, we posit the following relationships:
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H1a. SC integration has a positive impact on SC flexibility.

H1b. SC integration has a positive impact on Patient Responsiveness.

3.2 The relationship between demand forecasting and supply chain flexibility
Demand forecasting is a crucial element of planning and implementing SC operations. It is
considered as a key function that gives firms the ability to determine customer demand and
adapt the SC capabilities accordingly (Croxton et al., 2002). The significance of demand
forecasting in SCM is increasing because of its critical role to identify the direction of the
business strategy in the long term (Lambert and Cooper, 2000).
However, forecasting is regarded as a complex task because of the inter-related nature
of the data series, unpredictability of markets and general economic environment (Fildes
et al., 2009). The complexity of this problem pushes companies to set up a unit
responsible for forecasting. Firms purchase statistical software systems such as
forecasting decision support systems or use simple statistical approaches because of their
excessive costs (Fumi et al., 2013).
The accuracy and quality of forecasts affects all levels of SC from the retailer to the raw
materials supplier. Accurate demand forecasts have a critical role to increase customer
relationships and competitiveness and reduce safety stocks and overall costs. Inaccurate
forecasts may cause imbalances in supply and demand (Zhao et al., 2002).
SCs compete in a marketing environment where demand is very unpredictable.
Therefore, the capability to forecast customer demand accurately is important for retailers
and suppliers which seek greater responsiveness and flexibility to ensure product
availability (Adebanjo and Mann, 2000). In addition, sustainable SC flexibility provides
innovative, high-quality and low-cost products at the right time and in the right place (Gong,
2008).
According to management consulting company PRTM’s 2010 survey, continued demand
volatility is a major barrier against SC flexibility for SCs executives. The survey results
show that more than 74 per cent of respondents think that demand volatility and poor
forecasting accuracy are major challenges to SC flexibility (Mentzer, 2004).
As stated by Rexhausen et al. (2012), determining what consumers exactly want
facilitates companies to plan their SC activities more accurately (Rexhausen et al., 2012). As
a result, SC can achieve seamless order fulfillment process. In this way, SCs can fulfill the
aim of obtaining high level of speed, quality and flexibility, lower level of obsolescence and
inventory. Another study which investigated the situation in clothing industry concludes
 that if firms in clothing industry want to improve their SC flexibility they ought to have Application on
cutting-edge forecasting systems (Thomassey, 2010). Based on our literature review on public
demand forecasting and SC flexibility, we posit the following relationship:
hospitals
H2. Demand forecasting has a positive impact on SC flexibility.

3.3 The relationship between supplier performance and supply chain flexibility
In 1990s, companies realized the benefits of monitoring the activities of downstream and
upstream of SC. This shift, altered firms’ main focus of managing internal activities to
cooperating with all SC members (Duclos et al., 2003). Today suppliers are more important
than ever before for manufacturers since they have a significant role on their operational
effectiveness, efficiencies and flexibility (Zhao et al., 2013).
SC members in all sectors want to work with reliable and responsive suppliers that can
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increase value-added services and lead-time for better customer service. Thus, supplier
performance has been gaining more importance and is considered as a key competitive
success factor for companies (Singapore Economic Development Board, 2014).
Supplier performance refers to manufacturer’s satisfaction level with supplier’s fulfillment
of procurement conditions and measured with criteria such as speed of delivery, quality of
products and services (Ryu and Eyuboglu, 2007). If the delivery of orders is slow, delayed,
irregular or wrong, various problems will occur for purchasing organizations in terms of sales,
inventory and manufacturing processes (Frohlich, 2002). Because “late deliveries from
suppliers cause late deliveries to customers”, supplier performance must be identified and be
measured and tracked as part of the firm’s operating plan (Weissman, 2004).
Supplier performance contributes to achieving flexibility and brings long-term strategic
advantages to purchasing firms (Abdallah et al., 2017). The exploratory study by Tachizawa and
Thomsen (2007) reveals that supplier performance is a driver of SC flexibility. As part of
upstream SC drivers, suppliers that do not fulfill the purchasing conditions have a negative effect
on purchasing firms in terms of volume and product flexibility (Tachizawa and Thomsen, 2007).
Firms have the responsibility to establish supplier performance criteria and
encourage suppliers to meet these criteria. Commitment and investments in
evaluating and developing supplier performance capabilities is a requisite for SC
flexibility (Liao et al., 2010). The supplier performance measurement tools should
enable suppliers to be integrated more into the organization’s SC network, provide
demanded items on time and ultimately provide a flexible service to the final
customers (Gunasekaran et al., 2004).
In addition to measuring the supplier performance, it is also important to consistently
communicate with suppliers about their impacts on the end user. Thus, suppliers will have a
sense of responsibility to understand that their performance impacts end customer
satisfaction (Weissman, 2004). Based on our literature review on Supplier performance and
SC flexibility, we posit the following relationship:
H3. Supplier performance has a positive impact on SC flexibility.

3.4 The relationship between supply chain flexibility and patient responsiveness
Upton (1994) describes flexibility as the capability to react and adapt to changing
environmental conditions with minor loss of time, money, performance and effort (Upton,
1994). Having a flexible SC increases responsiveness to unpredictable demand (Tiwari et al.,
2015). To fulfill customer orders and reducing customer lead-time, a single firm’s efforts
would not be adequate (Jayant and Ghagra, 2013). Only integrated efforts of companies can
 IJPHM increase the level of performance through flexibility and eliminating uncertainties. In SCs,
materials move sequentially from one company to the next. This necessitates all SC
members to be flexible in responding to change (Lummus et al., 2005; Önkal and Aktas,
2005). Christopher and Peck (2004) states that SCs attaining more flexibility can have more
competitive advantages including the ability to outperform rivals on both customer value
creation (Christopher and Peck, 2004). Moreover, SC flexibility can increase the ability of
firms to support rapid product customization, to introduce new products quickly, to shorten
manufacturing lead times and to deliver products in a timely manner (Garavelli, 2003;
Mahapatra and Melnyk, 2003; Zhang, et al., 2003).
SC flexibility is an important element of non-profit organizations that take role in
disasters as well. To measure the relief chains’ flexibility and responsiveness capability,
volume flexibility (scale of disaster), delivery flexibility (disaster response time) and mix
flexibility (providing different types of items) criteria are used (Beamon and Balcik, 2008).
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SC flexibility facilitates filling customer orders with increasing responsiveness as well as

improving the efficiency and effectiveness of equipment and processes. This suggests a
direct relationship between SC flexibility and SC responsiveness. The following hypothesis
is therefore proposed:
H4. SC flexibility has a positive impact on Patient Responsiveness.
From the literature justifications explained in the literature review and hypothesis
development section, it is expected to find that a variety of factors have an impact on the
patient responsiveness through the mediating role of SC flexibility. It is also hypothesized
that the SC integration has a direct impact on patient responsiveness. After an extensive
literature review, the proposed research model showing the direct and mediating effects was
developed (Figure 2).
This model is used to address the main aim of the paper. In other words, the focus is on
the relationships between the four latent variables, namely, demand forecasting, supplier
performance, SC integration (exogenous) and how they influence patient responsiveness
(endogenous) at public hospitals through the mediating role of SC flexibility. The
measurement or survey items are presented in Appendix.

4. Research methodology, models and results

4.1 Sampling and data collection
For the data collection, we relied on a survey instrument developed by Demirdög en and
Polater (2016). These survey instruments (scales) were further tested in this study to confirm
their validity and reliability. Accordingly, the results are given in Table AII.

Figure 2.
Conceptual model
 In the research, utilization of judgmental sampling method, which is one of the non-random Application on
(non-probability) sampling methods, was considered appropriate. In this method, the public
sampling is decided by either specialists or the researcher himself as the person with the
hospitals
best knowledge of the issue (Ghauri and Gronhaug, 2005). In judgmental sampling, also
called goal-oriented sampling, the sample units are chosen among the units thought to be
suitable for the aim of the research. It is generally believed that the chosen sample units
represent the main population of interest (Suri, 2011). The focus of this study is on the top-
level and middle-line managers in SC, logistics and procurement departments. The reason of
this selection is that they directly deal with the SC processes and the SC network structure.
A scale of 1 (totally disagree) to 5 (totally agree) was used to get responses from participants
at hospitals. In data collection, face-to-face survey method was chosen.
This paper examines the Turkish health-care system because the specific conditions of
the country such as the increasing number of population, geopolitical position, migration
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waves, man-made and natural disasters urge Turkish health-care industry to find solid
solutions to respond the ever-changing demand successfully. In this study, public hospitals
and the Secretary General of the Association of Public Hospitals in Erzincan, Erzurum,
Antalya, Samsun, Istanbul and Ankara cities were selected based on the following criteria:
population and bed capacity.
Because the metropolitan cities’ population density is high, they provide services to
larger number of patients and this increases the intensity of their SC operations. On the
other hand, the number of patients receiving health services in small cities is relatively less
than metropolitans. Therefore, this study covers both hospitals which are located in
metropolitans and small cities with different level of transaction volume.
Another criterion in selecting the hospitals is the bed capacity. To receive more reliable
answers, it was crucial to reach hospital managers who involve in various types of
transactions intensively. Thus, this study aims to reach the hospitals each of which has at
least 100 bed capacity.
The survey instrument was applied to one hospital in Erzincan, two hospitals in
Erzurum, one hospital in Antalya, two hospitals in Samsun, four hospitals in Istanbul and
three hospitals in Ankara which meet the above-mentioned criteria. The financial
constraints and the difficulties to reach all hospitals because of the lack of email addresses
forced the researchers to limit the study with above-mentioned organizations (Table I).
The analysis of reported statistics is based on a sample of 129 logistics and top-level and
middle-line managers in SC, logistics, and procurement departments at public hospitals. The
survey was applied to 18 managers in Erzurum, 7 managers in Erzincan, 10 managers in
Antalya, 15 managers in Samsun, 41 managers in Istanbul and 38 managers in Ankara. The
demographic characteristics of participants are presented in Table II.
Determination of sample size for structural equation modeling (SEM) is a challenge for
researchers. The study conducted by Wolf et al. (2015) and MacCallum et al. (1999)
demonstrates different approaches in determining the SEM sample size and emphasize the
issue of “one size fits all” approach (MacCallum et al., 1999; Wolf et al., 2015). Different
methods have been introduced to determine the sample size: Minimum sample size of 100 or
200 (Boomsma and Hoogland, 2001); 5:1 ratio of sample size to number of free parameters
(Bentler and Mooijaart, 1989). In addition, the studies conducted by Kline (2011), Jung (2013)
and Tenenhaus (2008) concluded that necessary sample size can range from 100 to 200
(Tenenhaus, 2008; Kline, 2011; Jung, 2013). Another alternative is to use Kaiser– Mayer–
Olkin (KMO) measure of sampling adequacy (Kaiser, 1974). A value of KMO of 0.70 and
above signifies that factor analysis would be adequate regardless of sample size.
 IJPHM Demographic information N (%)

Health-care institution age

0-3 year 5 38
3-7 year 1 8
7-10 year – –
10-15 year 4 31
Above 15 years 3 23
Total 13 100
Health-care institution bed capacity
100-199 4 31
200-399 5 38
Above 400 4 31
Total 13 100
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Types of institutions
Table I. PHAT 5 38
Demographic Public Hospitals 5 38
information of University Hospital 3 24
institutions Total 13 100

Demographic information N (%)

Gender
Female 45 34.9
Male 84 65.1
Age
21-25 9 7
26-30 21 16.3
31-35 31 24
36-40 24 18.6
41 and above 44 34.1
Education
High school 19 14.7
Associate degree 17 13.2
Bachelor’s degree 69 53.5
Postgraduate 24 18.6
Period of time spent working in SC operations
0-1 year 21 16.3
1-5 year 60 46.5
6-10 year 23 17.8
11-15 year 7 5.4
16-20 year 6 4.7
21 year and above 12 9.3
Way of gaining SC knowledge
Table II. University degree 2 0.01
Demographic On-the-job training 26 0.16
information of SC courses 3 0.02
participants Personal experience 98 0.61
 Table II summarizes the profile of participants from public health-care organizations by age, Application on
gender and experience in SC operations. Ultimately, the return rate was 100 per cent from public
the public health-care institutions which have bed capacity of more than 100.
hospitals
4.2 Analysis of results
This study’s focus is on the SC integration, demand forecasting, supplier performance, SC
flexibility and patient responsiveness in Turkish health-care sector. Turkish public
hospitals were selected to execute the survey through their SC executives. SPSS 18 and
LISREL 8.8 statistical software were used to measure the questionnaire which has 23 total
items in five parts.
Reliability analysis of each construct was performed. Table AII indicates the factors
related to each construct. It also presents the statistical findings such as Cronbach’s alpha,
mean, standard deviation, factor loading and t-values. Cronbach’s alpha is regarded as a
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measure to assess the internal consistency of a set of scale.

The minimum Cronbach’s alpha coefficient is 0.50. Cronbach’s alpha values higher than
0.70 are indicative of high reliability and internal consistency of the scale (Hair and Black,
2014). In this study, all alpha values are above 0.70. In addition, varimax rotation and mean
substitution ensures unidimensionality as reported in Table AII.
These findings indicate that the questionnaire is in compliance with reliability
requirements of internal consistency.
Confirmatory factor analysis (CFA) is a multivariate statistical technique that is used to
confirm the validity and fitness of measurement model to the data. Therefore, conducting a
CFA before analyzing a structural model is suggested by Anderson and Gerbing (1988). The
CFA results are presented in Table AII. The coefficients are significant at 0.01 level.
According to the results of CFA, the RMSEA values were below 0.1 and the goodness-of-fit
index (GFI) values are above 0.90 as indicated in Table AIII. The findings indicate that the
overall fit of the measurement model was satisfactory.

4.3 Results of structural equation model

To analyze the relationships between the constructs SEM was applied. SEM is a
statistical modeling technique that is used to test sophisticated relationships among
variables. The main aim of the SEM analysis is to validate the hypotheses. In addition
to this, it explains the direct and indirect relations between two or more latent variables.
Path diagrams are used to present SEM models. Path diagrams depict the relationships
among different variables (Hair et al., 2012). Testing the structural model follows the
CFA. The fit indices are similar to the CFA model and suggest a good model fit for both
group of participants as shown in Table AIII. When the values of comparative fit index
(CFI) and GFI larger than 0.90 it is regarded as an evidence of convergent validity (Hair
et al., 2012).
The research hypotheses are supported as a result of the analysis (Table AIII). Table IV
shows the directions and significances of the relationships between the constructs. We
believe the consistency of the model with the SCM theory. The path diagram of the model is
presented in Figure 3.

4.4 Total and indirect effects

The results showed the following positive direct relationships:
 between demand forecasting and SC flexibility;
 between SC integration and SC flexibility;
 Downloaded by University of Sussex Library At 12:45 12 August 2018 (PT)

IJPHM

Figure 3.
Structural model
  between supplier performance and SC flexibility; Application on
 between SC integration and patient responsiveness; and public
 between SC flexibility and patient responsiveness. hospitals
The indirect effect of demand forecasting and supplier performance on patient
responsiveness is 0.10 and 0.12 respectively. The overall effect of SC integration on patient
responsiveness is 0.57 with an indirect effect of 0.09. These results suggest the impact of
demand forecasting and supplier performance when SC flexibility is an intermediary and
can be seen in Table III.
For suppliers, the indirect of demand forecasting and supplier performance on patient
responsiveness are, respectively, 0.09 and 0.12. The overall effect of SC integration on
patient responsiveness is 1.23 with an indirect effect of 0.69. These results emphasize the
impact of demand forecasting and supplier performance when SC flexibility is an
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intermediary and can be seen in Table III.

5. Discussion
SC flexibility represents the capability of organizations to react to unforeseen changes in
customer needs. Given the increasing research interest in SC flexibility, measuring the
impact of SC flexibility, SC integration, demand forecasting and supplier performance on
patient responsiveness is scarce.
The path analysis results show that all hypotheses were accepted. The path analysis
indicates that demand forecasting has a positive and direct impact on SC flexibility. It
means that successful demand forecasting results in flexible SC. Also, demand forecasting
has an indirect impact on patient responsiveness via SC flexibility. Success rate of demand
forecasting first increases SC flexibility and then cumulatively contributes to the patient
satisfaction. This result is in parallel to the findings from Thomassey’s (2010) findings (Zhao
et al., 2013).
Today, suppliers play an important role in SC operations because their performance
effects operational effectiveness, efficiencies and flexibility of SC partners. Another
hypothesis of the study is that there is a relationship between supplier performance and SC
flexibility. The analysis results imply that supplier performance directly affects SC
flexibility. Also, achieving SC flexibility by supplier performance leads to effective customer
response. The studies conducted by Tachizawa and Thomsen (2007); Liao et al. (2010) and
Gunasekaran et al. (2004) indicate that developing supplier performance is a prerequisite for
SC flexibility and successful customer responsiveness (Upton, 1994; Gunasekaran et al.,
2004; Pujawan, 2004).
SC integration is regarded as a critical element to obtain SC flexibility and customer
responsiveness. The investigations of Narasimhan and Jayaram (1998) and Simatupang and
Sridharan (2002) imply that SC integration leads to SC flexibility (Jack and Raturi, 2002;
Hallgren and Olhager, 2009). Another research conducted by Lee et al. (2015) presents that
SC integration is positively correlated with SC flexibility (Lee et al., 2015). Our study reveals

Indirect Direct Total

Table III.
Label DF INT SP SF DF INT SP SF DF INT SP SF
Standardized direct,
CUR 0,1024 0,0992 0,1216 – – 0,47 – 0,32 0,1024 0,5692 0,1216 0,32 indirect and total
SF – – – – 0,32 0,31 0,38 – 0,32 0,31 0,38 – effects for hospitals
 IJPHM that SC integration has a positive and direct relationship with SC flexibility and patient
responsiveness.
As a result, it can be mentioned that hospitals should operate with integrated manner
internally and externally. In addition, SC members should have precise demand forecasting
to act to regular and irregular demand. Another important point is to evaluate supplier
performance and take supplier constraints into account. All these factors will lead to a more
flexible SC and finally patient satisfaction.

6. Conclusion
As a reality of the global health-care market, many patients cannot receive the required level
and quality of health-care services in developed and developing countries (Murray and
Lopez, 2002). Even though the health-care services are considered as unaffordable,
especially in the developing countries, it is contradictory in an environment that various
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kinds of goods are exchanged beyond the boundaries expeditiously. The deficiency of
resources is indicated as one of the main reasons of the poor quality in health services
(Institute of Medicine, 2001). Meijboom et al. (2011) highlight the significance of the
integrated approach in providing quality services to the patients. They also consider the
traditional supply-driven systems as insufficient because of their autonomous nature. A
cooperation and multidisciplinary approach is regarded as indispensable to accomplish a
smooth health-care operation (Meijboom et al., 2011). For this reason, business or operations
management methods are receiving more attention by the health-care sector managers
(Young et al., 2004). In this way, they seek to find effective and efficient ways to respond the
patients’ needs (Fredendall et al., 2009). Among the operations management concepts, the
application of SCM tools and techniques provide benefits to hospitals, to their suppliers and
to patients (McKone-Sweet et al., 2005). This study aims to examine the impact of HSC’s
capability to meet the expected and unexpected demands to provide satisfactory level of
health-care services to the patients. By conducting this study, the authors aimed to:
 profile the HSC and particularly Turkish HSC in terms of key players and the
interactions among them;
 explain how the HSC currently operates;
 empirically analyze the relationships among the integration of HSC partners,
accurate demand forecasting, supplier performance, SC flexibility and patient
responsiveness; and
 contribute researchers, as well as health-care professionals, in understanding the
impact of SC flexibility on patient responsiveness.

It is expected that this study contributes to the literature in the field of HSCM and develops a
conceptual framework for understanding the dynamics of the industry. We empirically
demonstrated the role of SC flexibility coordination as a mediator between the three factors
that have a critical role in SC operations and patient responsiveness. Though the previous
studies mostly investigated the impact of SC operations on financial performance, this study
specifically emphasizes the vital role of health-care services which is the response capability
to the patients’ demands. The study also contributes to the SC literature by investigating the
role of suppliers in the HSC. Furthermore, it gives insights into the integration mechanism
between SC stakeholders and the impact of demand forecasting on the planned outcome.
Finally, this research draws the attention of researchers by implying the need to conduct
more research in the field of HSC.
 Providing guidance to the practitioners was also one of the main aims of the study. In Application on
this sense, this paper raises the awareness of health-care providers towards the use of SC public
principles in the health-care context. Further, it presents the roles of each factor, such as SC
flexibility and integration, in providing successful health-care services. Thus, the results of
hospitals
this investigation give directions to the health-care managers in determining their SC
strategies and managing their organizations smoothly and effectively. The study findings
demonstrate that integration with suppliers has a significant impact on responsiveness of
hospitals to the changing conditions and as a result provides flawless services to the
patients. To achieve it, hospitals should increase the integration with external stakeholders
besides internal departments. One of the most important elements to increase the integration
is the successful communication and coordination between the departments, suppliers and
patients. Supplier performance is a critical element to have SC flexibility and provide
advantages to purchasing firms (Abdallah et al., 2017). Given the importance of suppliers’
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performance, hospitals should always evaluate the suppliers in terms of the quality of the
product and services they provide, their capability of responding the sudden demand
changes and providing the deliveries at the desired conditions. Another important factor in
responding to demands is to make reliable demand forecasts. As Croxton et al. (2002) state, it
has a key role which affects an organization’s ability to adapt the SC capabilities
accordingly (Croxton et al., 2002). For this purpose, hospitals should include internal and
external SM members in determining the demand forecasts. Additionally, they need to
create demand forecasts on regular basis by using statistical methods. The study findings
present that if the hospital managers pay enough attention to the aforementioned issues
they will be able to:
 respond to demand fluctuations;
 respond to SC disruptions;
 provide rarely needed items quickly;
 provide the desired quality products quickly;
 fill customer orders on time;
 reduce customer complaints; and
 increase the level of patient satisfaction.

Beside its contribution to the literature, the study has several limitations. Because of the
financial constraints and lack of communication through e-mail, it was unfeasible to reach
all public hospitals and related departments of the Ministry of Health in Turkey. As a result,
we had to apply the survey to the aforementioned public hospitals. This study focuses only
the public hospitals in Turkey. But the proposed model can be applied to private hospitals in
Turkey and other countries in future researches. Turkish health-care system has been
transforming itself since 2003. One of the critical elements of the health transformation
program introduced by the Ministry of Health is adapting e-health. This program provides
some benefits such as the standardization of data used in the health system, providing data
analysis tool for the hospital executives and facilitate the information between stakeholders.
Considering these developments future study may investigate the impact of technological
improvements on SC operations. Another important issue that future research studies may
investigate is the necessary skills of health-care managers in managing SC operations. It is a
difficult task to collect, prepare and analyze huge data sets related to patients, suppliers and
other internal operations. In this respect, future research studies can analyze the big data
analytics within the scope of the health-care SC.
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 Appendix 1 Application on
public
hospitals
Construct Variable Variable description

SC flexibility SF1 Our organization is able to respond to demand fluctuations

SF2 Our organization can rapidly respond to actual disruptions
SF3 It is easy for our firm to add new suppliers or remove current ones
SF4 In our organization, even rarely needed items can be easily
provided
SF5 Our organization is able to adapt to new technologies quickly
SF6 Our organization is able to provide the desired quality products
quickly
Patient responsiveness CUR1 Our organization fills customer orders on time
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CUR2 Our organization has quick response time in case of emergency or

special request
CUR3 The number of customer complaints has been declining for the last
five years in our organization
CUR4 We solve patient complaints about our organization quickly
CUR5 The level of patient satisfaction is satisfactory
Demand forecasting DF1 In our organization statistical methods are used for demand
forecasting
DF2 We measure the effectiveness of the demand forecasting process on
a regular basis and we make the necessary changes
DF3 Our demand forecast results are successful
Supplier performance SP1 The quality of the product and services offered by the supplier
meets the required standards
SP2 Suppliers deliver orders at the desired conditions
SP3 Suppliers can meet the sudden demand changes
SC integration INT1 Our departments are working jointly SC to identify and solve
problems
INT2 There is a successful communication and coordination between our
departments
INT3 Our departments determine the demand jointly
INT4 Our departments can communicate with each other quickly
INT5 There is a successful integration between our organization and
suppliers
INT6 There is a successful communication and coordination between our Table AI.
organization and suppliers Measurement scales
 IJPHM Appendix 2

Construct and items Std. Loadings Means t-values SD

SC Flexibility [KMO== 0,853; Cronbach’s alpha== 0,861]

SF1 0,77 3,94 8,50 0,81
SF2 0,79 3,96 7,41 0,81
SF3 0,74 3,81 7,12 0,92
SF4 0,73 3,88 6,90 0,86
SF5 0,78 3,67 7,65 0,97
SF6 0,82 3,92 8,01 0,86
Patient responsiveness [KMO = 0,844; Cronbach’s alpha = 0,852]
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CUR1 0,79 4,26 9,00 0,78

CUR2 0,83 4,34 8,49 0,76
CUR3 0,81 4,22 8,46 0,83
CUR4 0,74 4,40 6,69 0,77
CUR5 0,81 4,34 7,89 0,70
Demand forecasting [KMO = 0,739; Cronbach’s alpha = 0,926]
DF1 0,91 3,43 11,32 1,18
DF2 0,94 3,63 13,63 1,13
DF3 0,95 3,57 14,07 1,12
Supplier performance [KMO = 0,710; Cronbach’s alpha = 0,789]
SP1 0,82 3,79 8,22 0,94
SP2 0,83 3,94 8,69 0,91
SP3 0,87 3,92 10,16 0,90
SC integration [KMO== 0,850; Cronbach’s alpha = 0,852]
INT1 0,67 3,94 6,91 0,74
INT2 0,61 3,95 5,93 0,95
INT3 0,81 4,01 9,64 0,82
INT4 0,83 4,14 10,98 0,81
INT5 0,82 4,06 10,11 0,86
Table AII. INT6 0,82 4,00 10,00 0,92
Construct reliability
and validity analysis Notes: Chi square: 265,78; SD: 205; Chi square/SD: 1,30; GFI: 0.97; SRMR: 0.07; RMSEA: 0.09; CFI: 0,95
 Application on
public
hospitals

Fit index type Observed value Recommeded level Comment

x2
388,51
df 222
Table AIII.
x 2/df 1,75 0 < x 2/df < 2 The required level is achieved
RMSEA 0,08 0.05#RMSEA # 0.08 The required level is achieved Tests of structural
CFI 0,96 0.95#CFI # 0.97 The required level is achieved equation models with
NNFI 0,95 0.95#NNFI # 1 The required level is achieved goodness-of-fit
NFI 0,95 0.95#NFI # 1 The required level is achieved indices
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Hypotheses description Standardized path coefficient t-value Result

H2 0,32 3,85 Significant

H1a 0,31 3,01 Significant
H3 0,38 3,47 Significant Table AIV.
H1b 0,47 4,02 Significant Results of the
H4 0,32 2,83 Significant hypothesis tests

Corresponding author
Abdussamet Polater can be contacted at: sametpolater@hotmail.com

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