Group 3a Hospital Logistics

Supply Chain and Logistics – Hospitals Responding efficiently can save lives…. By: Ananta Kanoria| Gagan Vermani| Ravitosh Srivastava| Saurabh Saboo| Sumit Mallik

Hospital Value Chain

Hospital Pricing

Information

Facility Supply chain & Logistics

Sourcing

Inventory

Transportation

Facility • Facility plays a central role in the functioning 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

Hospital Facility Layout

Inventory Pricing

Information

Facility Supply chain & Logistics

Sourcing

Inventory

Transportation

Inventory • Inventory averages about 30-35% of the hospital’s Supply chain 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.

Inventory • 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 - Optimizing • Inventory Process Redesign •

Buyer Experience • Velocity Ranking

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Technology • Inventory management tools – HIMS

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Change Management • Streamlining product replacement process • Organizational acceptance of new process

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Technology

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.

Transportation Pricing

Information

Facility Supply chain & Logistics

Sourcing

Inventory

Transportation

Transport - Functions

Optimized Transport - Benefits

Sourcing Pricing

Information

Facility Supply chain & Logistics

Information Sourcing

Inventory

Transportation

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

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

Information Pricing

Sourcing Information

Facility Supply chain & Logistics

Sourcing

Inventory

Transportation

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.

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

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Pneumatic Tube systems to rapidly transport small items horizontally and vertically.

Pricing Pricing

Information

Facility Supply chain & Logistics

Sourcing

Inventory

Transportation

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.

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.

Hospital Pricing

Sourcing

Facility Supply chain & Logistics

Information

Inventory

Transportation

Thank You