The American Red Cross receives 4.8 million blood donations per year, or over 13,000 blood donations per day. (1) Donated blood is a perishable good, lasting up to 42 days when refrigerated. (2) Thus, the American Red Cross manages a very large supply chain of perishable goods.
This supply chain rewards suppliers (aka, donors) with satisfaction and snacks instead of money in order to build up an inventory of blood and related products like platelets and plasma for eventual distribution to customers (aka, hospitals and patients). This essay will focus on the American Red Cross’s $1.7 billion of biomedical services related to blood donations and distribution, which are much larger in value than the non-profit organization’s other relief and training services. (3)
American Red Cross management is already concerned about the impact of digitalization on its supply chain. As donors and hospitals become more sophisticated with technology, they are likely to demand new convenience and visibility from the organization’s biomedical services. Wasted donations and shortages by blood type may no longer be tolerated, when less life-critical services like transportation (Lyft, Uber) and lodging (Airbnb) have already been successfully digitized. (4)
Donors want to optimize aspects of the donation experience such as scheduling, processing time, and visible impact and to minimize wasted donations. Hospitals want to maximize on-time distribution and quality for the medical needs of their patients. These parties may be able to deal more directly with each other in the future as technology continues to improve.
The Red Cross provides only about 40% of the nation’s blood supply. (5) About 50% of the nation’s blood supply is provided by a coalition of community blood centers called America’s Blood Centers, with the balance provided by hospitals directly and other community blood centers. (6) If the Red Cross does not address digitalization concerns, these competitors may be able to gain market share.
Red Cross management responded to digitalization concerns in late 2014 by releasing the free Blood Donor App for an “easier, faster, and more convenient” donation experience. (7) Donors can still access service by phone and online, but the app provides a competitively unique service channel. (8)
In the short term, several app features make the donation experience more convenient, likely increasing the Red Cross’s access to donors and blood supply. The app offers appointment search, scheduling, and reminders. Higher-value features include lifetime tracking of blood donations with an impact on up to three lives for each donation and gamification badges to share impact on social media. (9) These features align with the increasingly digital preferences of donors.
Another app feature is geo-targeted blood shortage alerts, which alert donors if their blood type is in need within their local community. (10) This feature effectively manages the supply chain by providing supply and demand visibility throughout the network. Donors are likely more willing to sacrifice an hour of their time when they are more certain that their donation will not be wasted.
In the medium term, Red Cross management wants to use technology “to connect more people to our lifesaving information and services.” (11) Though the organization has publicized its digital efforts to benefit donors, it has also improved testing and communication technology to respond more quickly to hospitals. The Red Cross can now transfer test results to hospitals in 24 hours. (12)
The app’s Blood Journey feature is intended to inform donors when and where their donation is used, as modeled in the picture below. Donor reviews indicate that this feature is often inoperative. (13) In the short term, more accurate displays of donation tracking, which is already conducted for medical safety reasons, would provide network customization. Both donors and hospitals would likely feel more connected to and incentivized to re-engage as a result of this customized data.
In the medium term, a supply chain forecast would also enhance network visibility. The Red Cross predictably faces blood shortages during summers due to more outdoor activity and injury, limited access to schools to host blood drives, and less donor availability. (14) A local supply chain forecast would help donors plan blood donations on a broader timeline than the current blood shortage alerts. Real-time tracking of actual hospital need would contextualize and improve this forecast.
The Red Cross should also communicate more closely with hospitals in order to reduce lead times between hospital need and distribution. This communication is likely to lead to updated technology, storage methods, and distribution methods within the supply chain.
After writing this essay, I wonder:
- How else can the Red Cross improve its digitalization with hospitals?
- Should the Red Cross include other blood drives on its Blood Donor App? This broader scope may allow the Red Cross to impact even the supply chain of its competitors.
(Word Count: 799)
(1) American Red Cross, 2016 Annual Report, p. 11, http://www.redcross.org/images/MEDIA_CustomProductCatalog/m64340273_Annual-Report-2016.pdf, accessed November 2017.
(2) American Red Cross, “What Happens to Donated Blood?,” http://www.redcrossblood.org/learn-about-blood/what-happens-donated-blood, accessed November 2017.
(3) American Red Cross, 2016 Consolidated Financial Statements, p. 4, https://p.widencdn.net/ghq1cy/2016_TheAmericanRedCross_CFS, accessed November 2017.
(4) Cristela Guerra, “Blood Shortage Has Red Cross Calling for More Donations,” Boston Globe, August 2, 2017, https://www.bostonglobe.com/metro/2017/08/02/blood-shortage-has-red-cross-calling-for-more-donations/rpLzkLYAOtYRh5vX17i6PM/story.html, accessed November 2017.
(5) 2016 Annual Report, p. 10.
(6) America’s Blood Centers, “What We Do,” http://www.americasblood.org/about-us/what-we-do.aspx, accessed November 2017.
(7) “Red Cross Sets World Record with Blood Donor App Downloads,” press release, September 10, 2014, on American Red Cross website, http://www.redcross.org/news/article/Red-Cross-Sets-World-Record-with-Blood-Donor-App-Downloads, accessed November 2017.
(9) iTunes, “Blood Donor by American Red Cross,” https://itunes.apple.com/us/app/blood-donor-by-american-red-cross/id911428916?mt=8, accessed November 2017.
(11) 2016 Annual Report, p. 1.
(12) American Red Cross, “What Happens to Donated Blood?”
(13) iTunes, customer review “So easy to schedule appointments!” by RPCVBG.
(14) Carter BloodCare, “Why Summer Is a Time of Need”, http://www.carterbloodcare.org/why-summer-is-a-time-of-need, accessed November 2017.