IMB 819

SUPPLY CHAIN ANALYTICS TO MANAGE BLOOD AT

VHS BLOOD BANK

AAYUSHI KALRA, SHAILAJA GROVER, AND U DINESH KUMAR

Aayushi Kalra, Shilaja Grover and U Dinesh Kumar, Professor of Decision Sciences, prepared this case for class discussion. This case is not intended
to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes.

Copyright © 2020 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or
transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) –
without the permission of Indian Institute of Management Bangalore.

This document is authorized for use only in Prof. Magesh Nagarajan's GMP, Module-1, 2021-22 (3) at Indian Institute of Management - Nagpur from Aug 2021 to Feb 2022.
 Supply Chain Analytics to Manage Blood at VHS Blood Bank

October 14, 2018, Athmanathan, the Chief Administrator at Rotary Central TTK-VHS-Blood Bank, was
on his rounds at the Hemophilia center of the blood bank and was interacting with the children
undergoing blood transfusion. VHS hospital treated hundreds of Thalassemia patients every month
through blood transfusion and supplied blood to many hospitals in Chennai. Athmanathan was aware that
sourcing blood through voluntary donations was essential for the activities of TTK-VHS. However,
managing blood bank inventory and meeting the demand for various components of blood was becoming
a challenging problem due to uncertainties in both supply and demand.

After his routine check around the blood bank, Athmanathan met the IT Manager, Arumugam, regarding
the inventory status of various components of blood. Arumugam told Athmanathan that they would be
able to fulfil that day’s demand but there was an emergency request for platelets of O negative blood
group from a hospital. Five units of O negative platelets were available but all of them had expired and
the blood bank was unable to supply the requirement. Among blood components, platelets have very short
shelf life of about 5 days and O negative is a rare blood group; thus, having a high chance of expiry
compared to other blood components.

Back in his office, Athmanathan approached other blood banks in the neighborhood for the required
platelets but his efforts went in vain. This was not for the first time that they had run out of blood
components, in this instance, it was for a rare blood group. However, they had faced situations where they
had run short of blood components even for common blood groups. Athmanathan was convinced that
they could reduce the wastage of blood components and manage the blood inventory more efficiently. He
called Dr. Mythily, Director of Rotary Central TTK VHS Blood Bank, for a meeting to discuss about the
supply chain of blood. He felt that there was a need to plan the blood donation camps optimally to ensure
sufficient supply and at the same time minimize the waste due to expiry of the blood components.

Blood is an anticoagulant which can be used in an unmodified state and whole blood can be transfused
into a patient. However, a unit of blood can save up to three lives when it is processed and broken down
into different components such as platelets, plasma, and red blood cells. Each component serves its own
purpose as shown in Exhibit 1. The blood transfusion is vital for saving individuals during planned
critical surgeries as well as several emergency situations such as road accidents. In India, there are 234
million major operations, 63 million trauma-induced surgeries, 31 cancer-related procedures and 10
million pregnancy-related complications, which require blood transfusions every year.1 Regular blood
transfusion is very important for people suffering from thalassemia2 and hemophilia.3 With this kind of
demand for blood, it is very important for blood banks to be in control of their inventory and plan the
blood collection based on the demand.

In 2017, India experienced a 15-20% shortfall between supply and demand for blood, with the gap
widening to 25-30% during summer.4 About 11.1 million units of blood were collected in 2016-2017,
which was 85% of the 13 million units target according to World Health Organization (WHO) norms. The

1
Source: https://www.eraktkosh.in/BLDAHIMS/bloodbank/donateblood.cnt
2
Thalassaemia is an inherited blood disorder which is characterized by less haemoglobin and the body makes fewer blood red cells than normal.
3
Hemophilia is a genetic disorder that impairs the body’s ability of blood clotting.
4
Source: https://www.hindustantimes.com/health/donating-one-unit-of-blood-can-save-three-lives-here-s-how/story-
Cvz7vM9D6jkQur3OTam03K.html

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

gap between supply and demand has increased. According to the Ministry of Health and Welfare, India
faced a shortage of 1.1 million units of blood in 2015-2016; whereas in 2016-2017, the shortage went up
to 1.9 million units which could have aided half a million surgeries of different kinds.5 Details of the
requirement of blood units for various surgeries are provided in Exhibit 2. Apart from impact on
surgeries, scarcity of blood can have a huge impact on regular blood transfusion cases, emergency and
disaster situations as well as treatment of patients with prolonged and high mortality disease such as
cancer.

The need to manage supply chain of blood was critical for efficient and effective management of the
blood bank. Blood donation drives should ensure sufficient blood collection and most importantly clean
blood collection as even if sufficient blood is available, many are exposed to transfusion transmitted
infections (TTI). Athmanathan wanted to use an analytical approach to manage the blood to address
concerns such as: 1. Forecast the demand for various components of blood; 2. Insights on supply and
demand fluctuations; and 3. Proportion of blood collected to be converted into its components and
proportion to be retained as whole blood. Further, Athmanathan was interested in gaining insights from
the data collected regarding seasonal variation in the demand for components and so on.

ABOUT VHS

Voluntary Health Services (VHS) was a hub of excellence as a medical and healthcare organization in
Chennai. VHS was a multi-specialty 465-bedded tertiary care referral hospital in Chennai, Tamil Nadu,
established in 1958 by Dr. K S Sanjivi, a celebrated physician with the mission of fulfilling the healthcare
needs of the poor and middle class based on the clinical need and not based on their ability to pay for
service. It was run by a non-government organization (NGO) and had completed 50 years as a non-
profitable healthcare organization. VHS provided all general specialties and a few super specialties such
as general surgery, neurology, diabetic clinic, obstetrics, and gynecology at a nominal cost. VHS had a
blood bank, hemophilia center, and a drug rehabilitation center. Moreover, services such as dialysis and
laboratory investigation were available at VHS. VHS was treating about 70% of the patients free of cost.
The eligibility criteria for claiming free medical assistance was monthly income below a certain limit and
medical help was inclusive of medicines, food, and stay. VHS had various health checkup programs and a
network of 14 mini health centers located in and around Chennai. The radical ideology of the hospital was
to prevent and cure several ailments and facilitate disadvantaged groups of the society such as women,
children, elderly and poor, by providing a steady stream of healthcare services.6

ROTARY CENTRAL TTK-VHS-BLOOD BANK

Rotary Central TTK (T.T. Krishnamachari)-VHS-Blood Bank was a supplier of quality and safe blood
and blood components in Chennai and surrounding areas of Tamil Nadu, which was functional
throughout the day. It is a non-commercial blood bank operating since 1963 based purely on voluntary
blood donation in a spacious 8,000 square feet building. The core activities of the blood bank included
collection of blood from donors, processing, converting into components and screening of blood, and

5
Source: https://www.indiaspend.com/india-60-tankers-short-of-blood-in-2016-17-as-shortage-increases-53935/
6
Source: http://vhschennai.org

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

finally providing safe blood for transfusion. It had a hemophilia center which provided 24-hour
comprehensive care to hemophilia and thalassemia patients and arranged regular blood transfusion for
them at no cost or minimal cost.7

BLOOD COLLECTION

Blood donations camps were regularly organized by several government and non-government
organizations in India. Majority of the blood banks were managed under the voluntary blood donation
(VBD) scheme. The annual collection of blood in India from January to December, 2015 from all the
blood banks was 11,645,791 units, out of which 79.1%, that is, 8,378,692 units were through VBD and
remaining was through replacement donations.8

Generally, there are four types of blood donation.

1. Voluntary Blood Donation (VBD)

A person donates blood voluntarily without expecting anything in return. Mostly, this is done in blood
donation camps or volunteers can go to blood banks for donating blood. This ensures that blood has
undergone the various diagnoses and is safe.

2. Direct Blood Donation

A patient’s family member or friend donates the blood to the patient. It is crisis driven and highly
unsafe as direct blood donors are under duress and social pressure for donating the blood. They might
be unreliable in disclosing their medical history which compromises the safety of the donated blood.

3. Replacement Blood Donation

A person donates blood for the replacement of the blood that has already been transfused to a patient.
This is carried out for refund of the deposit charged by a blood bank for issued blood.

4. Autologous Blood Donation

A person donates blood for himself, stores it, and uses it for a planned treatment. It is mostly not
advisable in the instance of any existing medical condition, but autologous blood donation is mostly
being carried out in the instance of rare blood groups.

7
Source: http://vhschennai.org/blood_bank.php#title3
8
Source: Assessment of Blood Banks in India-2016,
http://naco.gov.in/sites/default/files/Assessment%20of%20Blood%20Banks%20in%20India%20-%202016.pdf

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

VHS BLOOD BANK SUPPLY CHAIN PROCESS

The blood bank organized blood donation camps at various places (mostly in schools, colleges, and large
firms such as information technology (IT) parks) and maintained inventory to fulfil the demand for blood
and blood components from VHS and other hospitals. VHS Blood Bank had a capacity of storing 3,000
units of blood with two blood bank rooms (cold rooms). Two types of bags were used to collect the
blood: single bags (350ml) and quadruple bags (4 bags, 350 ml, 450 ml), which were used for collecting
whole blood and blood components, respectively. The collection of single or quadruple bag depended
upon other factors such as the previous inventory, donor (e.g. platelets could not be extracted from
smokers’ blood). The components had to be separated within 6-8 hours of collection. Since components
have different densities, they were separated by centrifuging the blood. There is a layer of plasma at the
top, followed by the buffy coat, and red blood cells (RBCs) at the bottom. Further, platelets could be
extracted by spinning the buffy coat. The flow chart for process of blood components extraction is
provided in Exhibit 3. Every blood unit was screened for Human Immunodeficiency viruses (HIV),
Venereal Disease Research Laboratory (VDRL) test, acquired immunodeficiency syndrome (AIDS),
hepatitis, jaundice, and Sexually transmitted diseases (STD). The screening of blood and extraction of
components were carried out simultaneously.

VHS organized 20 blood donation camps per month on average. Approximately, each blood camp
received blood from 50 donors, which was collected in 40 quadruple (4 bags) and 10 single bags (80:20
ratio). Totally, 50-200 units of blood were collected in a camp. There was no demand-driven strategy for
the blood collection. Organization of blood camps was based on convenience and availability of staff.
Sometimes, there were five blood donation camps per week; and at other times, it was only one per week.
There were instances of shortage of blood. Moreover, there were instances, when the blood available for a
particular request would have expired. There was no policy for regular discard of the expired units.

The pattern of demand for different components is shown in Exhibit 4. Generally, there was high demand
for components as compared to whole blood. On average, at TTK-VHS, there were 75-100 patient
arrivals per day demanding packed cells, which included 5-20 regular Thalassemia patients. There was a
shelf life associated with each component which means there would be wastage of blood components if it
was not used during its shelf life. Shelf life of different components is provided in Exhibit 5. Shelf life
along with the demand for individual components is a key factor which determines the number of
components in the inventory at any point of time. Due to different shelf lives as well as varied demand for
components, there was wastage of blood and its components at the VHS blood bank caused by the expiry
of the blood and its components. Exhibit 6 provides information about the discard of different
components.

DATA-DRIVEN SUPPLY CHAIN SOLUTION

Athamanathan was convinced that they needed an analytically driven solution to make blood supply chain
at VHS more efficient and effective. VHS maintained the record of the collection and issuance of blood
and its several components. Issuance of every bag was recorded with details such as bag number, type of
component issued, blood group and RH factor, date of creation of bag and date of issuance and also

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

details of hospital or person to whom the bag was issued. All these details were recorded in a register.
Exhibit 7 provides information about the variables that were captured by the VHS blood bank.
Athmanathan wanted to use the data collected by TTK-VHS to assist various supply chain decisions. Past
data and trends of issaunce of various components of blood for individual blood group levels indicated
that the biggest dilemma of the VHS blood bank included the following: 1. when to plan a blood donation
drive; and 2. how much of blood and blood components to store in its inventory at any point of time to
meet their regular blood issuance needs as well as to meet the fluctuating blood demand? Athmanathan
wanted to map the blood collection and demand, based on the seasonality, special occasions/days and
months. VHS wanted a system which would help them to store sufficient blood and blood components
and minimize wastage.

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

Exhibit 1
Blood components and their function

Source: VHS

Exhibit 2
Impact of shortage of 1.9 million blood units

Blood Requirements
Units of Blood Required for Could Benefit
Heart surgery requires on average 6 units 3,27,187 Heart surgeries
Organ transplant requires on average 40 units 49,078 Transplants
Automobile accident requires on average 50 units 39,262 Accidents
Bone marrow transplant requires on average 20 units 98,156 Transplants

Source: University of Pune, https://www.indiaspend.com/india-60-tankers-short-of-blood-in-2016-17-as-shortage-increases-53935/

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

Exhibit 3
Blood component extraction process

Source: VHS

Exhibit 4
Pattern of demand

COMPONENT DEMAND
Cryo 301
Fresh Frozen Plasma 14477
Packed Red Cells 15683
Plasma 356
Platelets 3309
Single Donor Platelets 76
Whole Blood 1047

Source: VHS

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

Exhibit 5
Shelf life of various blood components

Component of Blood Shelf life

Whole Blood 35 days
Packed Red Cells without 35 days
SAGM
Packed Red cells with SAGM 42 days
Fresh Frozen Plasma 1 year
Ordinary Plasma 5 years
Platelets 5 days
Cryoprecipitate 1 year
Source: VHS

Exhibit 6
Discarded blood components

Discarded Blood Components

Cryo Fresh Frozen Plasma Packed Red Cells

Platelets Single Donor Platelets Whole Blood

Source: VHS

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 Supply Chain Analytics to Manage Blood at VHS Blood Bank

Exhibit 7
Data description

Variables in the Data

Variable Description
Financial Year Financial year in which blood has been collected
Bag Number Number tagged to the created blood component
Status Description Includes the following present status of the bag of the blood component
• Available
• Discard – Polycythemia
• Discard – Poor Donation
• Expired
• Issued
• HBs Ag Positive
• HCV Positive
• High Lipid
• HIV Positive
• Leakage
• Red Cells
• Reserved
• Unknown
Blood Group Includes the following Blood Group
A, AB, B and O
RH Includes the following RH factor
• Positive
• Negative
Blood Classification Different components of blood
• Cryo
• Fresh Frozen Plasma
• Packed Red Cells
• Plasma
• Platelets
• Whole Blood
Stock Creation Date Date on which blood or blood component is collected and moved to the inventory
Stock Issue Date Date on which blood or blood component is issued
Expiry Date Date on which blood will get expired

Source: VHS

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