Kogod professor Itir Karaesmen Aydin explains the blood supply chain process in the US and how seasonality and other events impact supply and demand.
This is the first version of the article written by a Kogod School of Business writer.
In November, we published an article about the supply chain issues expected during the holiday season. As we entered the whirlwind season, some industries were spared from empty shelves, while other more holiday-centric sectors felt the struggle.
Though some of the festivities that add to the holly jolly spirit were a little less illuminated this year, it wasn’t until the post-holiday season that grocery stores and other industries were experiencing the peak effects of supply chain shortages. The Washington, DC region faced barren shelves in mid-January due to the omicron variant covid surge and snowstorms.
While shortages may contribute to discomforts, these aren’t life or death situations–most individuals can find substitutes or wait for their desired product to be restocked in the coming weeks. But what about when supply chain issues create life or death situations when medical supplies are delayed?
We circled back with Kogod professor Itir Karaesmen Aydin and learned more about blood supply chains in the US. “My research investigates inventory management practices in blood supply chains. Blood supply chain management is challenging in practice because there are so many stakeholders,” says Karaesman Aydin. “It is also challenging from a purely academic theoretical perspective because the product is perishable, has a short shelf life, and the supply is uncertain.”
The US blood system is built from the coordinated activities of multiple stakeholders. Volunteer donors supply most blood and its components–red blood cells, platelets, plasma, whole blood, and other blood products for research–which are then tested, stocked, and distributed by nonprofit blood centers. These centers supply hospitals and other health care providers that keep blood products accessible for patient care.
Because blood is perishable, making sure all stock is used before it expires is critical so that collection, testing, and transporting efforts aren’t wasted. Karaesmen Aydin studies mathematical models that determine the supply levels that optimize inventory performance.
Demand and supply are the two sides of the blood supply chain.
“Seasonality of supply affects the inventory: blood cannot be stored indefinitely, but you cannot stockpile in the spring or fall in anticipation of the challenges during summer and winter,” says Karaesmen Aydin. “For instance, platelets can only be stored for five days. You need a constant supply to meet demand throughout the year.”
Several factors impact inventory–including covid surges. “Scheduled blood drives at colleges, places of worship, large corporations, etc., have gone down significantly. There are also challenges at collection sites if staff levels at blood centers are low due to covid,” says Karaesmen Aydin.
Currently, inventory is at dangerously low levels because of winter and the omicron variant–yet on the other hand, demand has gone down due to covid because elective surgeries are postponed. “But the decrease in supply has been more dramatic than the decrease in demand,” says Karaesmen Aydin.
Over the years, steps have been made to decrease the demand for blood products due to advances in medicine. Noninvasive procedures reduce the need for blood transfusions. “This has been a real improvement,” says Karaesmen Aydin. “Supply, on the other hand, has remained the primary problem. If you think the foundation of the blood supply chain has always been shaky–the pandemic almost destroyed the foundation.”
Professor Karaesmen Aydin explains that a robust and sustainable supply structure is needed, and this begins with more donors.
“Younger people are not becoming regular donors. We need to find ways to reach more young people,” says Karaesmen Aydin. “Only 38 percent of the US population is eligible to donate. The FDA has stringent rules about who is eligible.”
“Blood donations should be a part of corporations’ and business’ social responsibility. People may continue to work from home even when the pandemic conditions ease, but corporate social responsibility programs continue,” says Karaesmen Aydin. “Corporations and blood centers have to come together to attract more donors.”
Find out if you’re able to donate on the Red Cross website.