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Supply Chain and Logistics Hospitals
Responding efficiently can save lives.
By: Ananta Kanoria| Gagan Vermani| Ravitosh Srivastava| Saurabh Saboo| Sumit Mallik
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Hospital Value Chain
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Information Facility
InventorySourcing
Supply chain
&
Logistics
Transportation
Pricing
Hospital
Facility
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Facility
Facility plays a central role in thefunctioning of the supply chain of hospital.
Leading Factors :
Location density of population, proximity to suppliers
Type of services Specialized or General
Layout size of machines, changes in technology
Flexibility and Expandability
Number of beds size
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Hospital Facility Layout
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Inventory
Information Facility
InventorySourcing
Supply chain
&
Logistics
Transportation
Pricing
Inventory
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Inventory
Inventory averages about 30-35% of the hospitals Supplychain costs
A typical hospital pharmacy has more than 2,000 products
in its inventory
Hospital pharmacists are expert at evaluating the efficacy
of drugs, many haven't looked closely enough at their
inventory management processes
In fact, the typical health system pharmacy does not use
calculated methods for determining product orders.
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Consequences of traditional pharmacy purchase:
Low inventory turns per year
Missed contract compliance
Excess inventory levels
Frequent stock outs and costly emergency deliveries
Workflow interruptions and expensive rework
Increased health system labour requirements
Inventory
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Inventory - Optimizing
Inventory Process Redesign
Technology
B
uye
r
Expe
rience
Change
Managem
ent
Buyer Experience
Velocity Ranking
Technology
Inventory management tools
HIMS
Change Management
Streamlining product
replacement process
Organizational acceptance
of new process
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Inventory - Optimization
Benefits of Optimized Inventory
Increased Inventory Turns
Increased capital availability
Improved Contract Compliance
Improved service due to reduced stock outs
Freeing up of pharmacist time to focus more on
patients rather than inventory.
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Transportation
Information Facility
InventorySourcing
Supply chain
&
Logistics
Transportation
Pricing
Transportation
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Transport - Functions
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Optimized Transport - Benefits
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Sourcing
Information Facility
InventoryInformation
Supply chain
&
Logistics
Transportation
Pricing
Sourcing
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Sourcing non core functions
Major functions outsourced to third party vendors Medical transcription is very big abroad
Canteen
Cleaning/Sanitization
Managing inventory only pharmacy supplies taken
care of by hospitals. Inventory management
outsourced (Nebraska Medical Center outsourcing to
Owens & Minor)
IT AMC, website maintenance, data storage
Help desk
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Sourcing Why or why not!
Advantages Cost saving leads to additional capital for expansion
Specialization achieved by way of focusing on
providing healthcare service to patients Functions outsourced to institutions specializing in the
field so no compromise on quality
Disadvantages
Loss of Vision - third parties not attached to the cause
Third parties may divulge certain data to competitors
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Information
Sourcing Facility
InventorySourcing
Supply chain
&
Logistics
Transportation
Pricing
Information
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Contribution of
Information Technology
Integration Supply chain management system with
Financial Management system, Clinical Management
system.
Electronic Data Interchange Patient data, Invoice
Payment.
Tracking Bar Code scanning, RFID usage.
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Contribution of
Information Technology
Automation Technology
Automated point-of-use data capture that automatically initiate
restocking
Automated integration with patient accounting system
Robots to transport medium-sized items
Pneumatic Tube systems to rapidly transport small items horizontally
and vertically.
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Pricing
Information Facility
InventorySourcing
Supply chain
&
Logistics
Transportation
PricingPricing
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Pricing Driving Factors
Products & Services surgical supplies, radiographic film
laboratory reagents, therapeutic agents. Reduction of
commodity prices, inventory levels and distribution fees by
hospital Group Purchase Organizations (GPO).
Participants & Processes manufacturers, vendors . Right
product to the right user at the right time .
Accountabilities No departmental silos, clinician
choices to be evaluated in context of bottom line.
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Pricing Driving Factors
Departmental initiatives To achieve commodity savings.
Facilitate value analysis process that enables physicians
and line managers to take supply decisions.
Assessment of Savings potential Benchmarking and
process analysis. Handled by Cross functional team.
Focus Initiatives to attack areas where supply cost is a
significant portion of total cost per case. Scope,
Complexity, Risk to be considered.
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Hospital
Sourcing Facility
InventoryInformation
Supply chain
&
Logistics
Transportation
Pricing
Supply chain
&
Logistics
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Thank You
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