The Business of Blood

Fast Company:

Ben Bowman’s Minneapolis office, in a renovated brick warehouse, is steps from the Mississippi River. But his mind is on a different circulatory system: blood. As usual, he’s thinking about waste-1.3 million pints spoil, he claims, and get tossed every year in the U.S.-and about archaic distribution. “Can the market really be this inefficient?” Bowman asks, his voice rising a bit. “I spent at least six months calling people saying, ‘Tell me why the market’s like this.’ And the answer we got was, ‘This is the way it’s always been.’”

He’s talking about a supply chain that hasn’t changed in seven decades-a system his General Blood is trying mightily to disrupt. Instead of relying on collection from local donors, then selling to hospitals within driving distance, why not buy cheaply from centers in -America’s vast midsection and distribute overnight to hospitals on either coast, underpricing rivals like the Red Cross?

But it’s not so easy to disrupt a $4.5-billion-a-year business, even a sclerotic one. For one thing, the tide of supply and demand changes as dramatically as Old Muddy. For another, it’s tough to dislodge old ways of doing things-especially in a market where the biggest player, the American Red Cross, controls 44% of the blood supply and has the ability to distribute nationally, depending on the needs of particular areas.

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