The Challenges of Hospital Supply Chain Management, from Central Stores to Nursing Units

Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 184)

Abstract

The practice of patient care is supported by a range of healthcare supply chain management activities, also referred to by many as healthcare logistics. Improving the efficiency of these activities can provide opportunities for healthcare institutions and health systems to increase the quality of care and reduce costs. Hospitals represent a key link in the supply chain and face their own particular challenges due the complexity of their internal supply chain. The distribution of medical supplies to nursing units represents a vital component of the internal hospital supply chain. Indeed, all doctors, nurses, and clinical support staff deal with and depend on supplies in one way or another and are thus affected by their accessibility and availability on a daily basis. The methods most often used to distribute supplies to nursing units range from requisition-based systems that depend on clinical staff involvement to methods where the hospital’s central stores manage inventory and replenishment. In the latter category, common storage and distribution method options include par level systems and automated cabinets, among others, as well as the two-bin/kanban replenishment method, which has been identified as a best practice. For its part, RFID technology has further enhanced this leading practice and introduced the possibility of proactively managing supplies by triggering replenishment rounds based on a range of user-defined criteria. Beyond its expanded benefits, this innovation opens the door to a large number of research avenues in the areas of capacitated vehicle routing problems, inventory optimization, and simulation.

Keywords

Supply Chain Supply Chain Management Clinical Staff Medical Supply Preference List 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. AHA (2012) Fast facts on US hospitals. www.aha.org Accessed January 3, 2012.
  2. AHRMM (2000) National performance indicators for health care materials management. Association for Health care Resource & Materials Management, ChicagoGoogle Scholar
  3. AHRMM (2010) Health care supply chain, resource & logistics processes. Association for Health care Resource & Materials Management, ChicagoGoogle Scholar
  4. Amaya CA, Beaulieu M, Landry S, Rebolledo C, Velasco N (2010) Potenciando la contribucion de la logistica hospitalaria: tres casos, tres trayectorias. Int Manag 14(4):85–98CrossRefGoogle Scholar
  5. Andersen A (1990) Stockless materials management: how it fits into the health care cost puzzle. HIDA Educational Foundation, AlexandriaGoogle Scholar
  6. Aston G (2010) Teaming with physicians can drive down costs. Hosp Health Netw 84(1):13Google Scholar
  7. Bales WA, Fearon HE (1993) CEOs’/Presidents’ perceptions and expectations of the purchasing function. CAPS, TempeGoogle Scholar
  8. Beaulieu M, Landry S (2010) Le déploiement d'une stratégie logistique à l'Hôpital du sacré-coeur de Montréal. Int J Case Stud Manag 8(1):35Google Scholar
  9. Bendavid Y, Boeck H (2011) Using RFID to improve hospital supply chain management for high value and consignment items. Procedia Comput Sci 5:849–856CrossRefGoogle Scholar
  10. Bendavid Y, Boeck H, Philippe R (2010) Redesigning the replenishment process of medical supplies in hospitals with RFID. Bus Process Manag J 16(6):991–1013CrossRefGoogle Scholar
  11. Berling RJ Jr, Geppi JT (1989) Hospitals can cut materials costs by managing supply pipeline. Health Care Financ Manag 43(4):19–22Google Scholar
  12. Black J, Miller D (2008) Toyota way health care excellence. ACHE Management Series, ChicagoGoogle Scholar
  13. Blackburn JD (1991) The quick response movement in the apparel industry, in Blackburn JD time-based competition—the next battle ground in American manufacturing. Business One Irwin, Homewood, pp 246–269Google Scholar
  14. Bourgeon B, Constantin A, Karolszyk G, Marquot JF, Pedrini S, Landry S, Diaz A, Estampe D (2001) Évaluation des coûts logistiques hospitaliers en France et aux pays Bas. Logistique Manag 9(1):81–87Google Scholar
  15. Burnette SW (1994) Efficient materiel handling and distribution: a design perspective. Hosp Mater Manag Q 16(2):24–34Google Scholar
  16. California Health care Foundation (2012) Health care costs 101. Slow but Steady, CHCF, Oakland.www.chcf.org
  17. Cammish R, Keough M (1991) A strategic role for purchasing. McKinsey Q (1):22–39Google Scholar
  18. Chow G, Heaver TD (1994) Logistics in the Canadian health care industry. Canadian Logist J 1(1):29–73Google Scholar
  19. Consulting CSC (1996) EHCR, Efficient health care consumer response, improving the efficiency of the health care supply chain. American Hospital Association/American Society for Health care Materials Management, ChicagoGoogle Scholar
  20. DeJohn P (2005) The last frontier: saving on M.D. preference items. Hosp Mater Manag 30(6):1, 9–11Google Scholar
  21. Driscoll RS (1981) Supply, processing, and distribution: an overview. Hosp Mater Manag Q 2(4):21–24Google Scholar
  22. Fearon HE, Ayres DL (1967) Effect of centralized purchasing on hospital costs. J Purchasing 3(3):22–35Google Scholar
  23. Fereng J (2010) How are your nurses spending their time? Hosp Health Netw 84(5):14Google Scholar
  24. Graban M (2009) Lean hospitals. CRC, New YorkGoogle Scholar
  25. HFMA (2010) HFMA’s health care financial pulse. HFMA, WestchesterGoogle Scholar
  26. Hunter NA, Valentino P (1995) Quick response—ten years later. Int J Clothing Sci Technol 7(4):30–40CrossRefGoogle Scholar
  27. Janson RL (1985) Future trends in hospital materiel management. Hosp Mater Manag Q 7(1): 11–17Google Scholar
  28. Klibanov OM, Eckel SF (2003) Effects of automated dispensing on inventory control, billing, workload, and potential for medication errors. Am J Health Syst Pharm 60:569–572Google Scholar
  29. Kowalski JC (1993) Managing hospital materials management. Kowalski Dickow Associates, WashingtonGoogle Scholar
  30. Kurt Salmon Associates Inc. (1993) Efficient consumer response: enhancing consumer value in grocery industry. Food Marketing Institute, WashingtonGoogle Scholar
  31. Lafond N, Landry S (2001) Gérer plus efficacement les stocks du bloc opératoire à partir de la programmation des interventions chirurgicales. Gestions Hosp (405):259–263Google Scholar
  32. Landry S, Beaulieu M (2002) Logistique hospitalière: un remède aux maux du secteur de la santé? Gestion 26(4):34–41CrossRefGoogle Scholar
  33. Landry S, Beaulieu M (2007) The hospital: not just another link in the health care supply chain. In: Starr MK (ed) Foundations of production and operations management. Thomson, New York, p 281Google Scholar
  34. Landry S, Beaulieu M (2008) Recognizing the special character of the hospital link in the health care supply chain. In: Starr MK (ed) Production and operations management, 2nd edn. CENGAGE Learning, Stamford, pp 402–404Google Scholar
  35. Landry S, Beaulieu M (2010) Achieving lean health care by combining the two-bin kanban replenishment system with RFID technology. Int J Health Care Manag 1(1):85–98Google Scholar
  36. Landry S, Philippe R (2004) How logistics can service health care. Supply Chain Forum 5(2):24–30Google Scholar
  37. Landry S, Beaulieu M et al (2000) Étude internationale des meilleures pratiques de logistique hospitalière, vol 00–05. CHAÎNE Research Group, HEC Montréal, MontrealGoogle Scholar
  38. Landry S, Blouin JP, Beaulieu M (2004) Réapprovisionnement des unités de soins: portrait de six hôpitaux québécois et français. Logistique Manag (Special issue):13–20Google Scholar
  39. Leone G, Rahn RD (2010) Lean in the OR. Flow Publishing, BoulderGoogle Scholar
  40. Montgomery K, Schneller ES (2007) Hospitals’ strategies for orchestrating selection of physician preference items. Milbank Q 85(2):307–335CrossRefGoogle Scholar
  41. Moore R (1999) Making common sense, common practice. Cashman Dudley, HoustonGoogle Scholar
  42. Nachtmann H, Pohl EA (2009) The state of health care logistics: cost and quality improvement opportunities. Center for Innovation in Health care Logistics, ArkansasGoogle Scholar
  43. Park KW, Dickerson O (2009) Can efficient supply management in the operating room save millions? Curr Opin Anesthesiol 22(2):242–248CrossRefGoogle Scholar
  44. Parker J, DeLay D (2005) The future of the health care supply chain. Health Care Financ Manag 62(4):66–69Google Scholar
  45. Pedersen J (1996) Product standardization: playing to win. In Vivo 14(6):15–20Google Scholar
  46. Perrin RA (1994) Exchange cart and par level supply distribution systems: form follows function. Hosp Mater Manag Q 15(3):63–76Google Scholar
  47. Philippe R, Beaulieu M (2010) Supply chain processes in ORs can be improved using industrial practices. Can Health Care Technol 15(4):13–15Google Scholar
  48. Plossl GW (1994) Orlicky’s material requirement planning. McGraw-Hill, New YorkGoogle Scholar
  49. Rivard-Royer H, Landry S, Beaulieu M (2002) Hybrid stockless—a case study: lessons for health care supply chain integration. Int J Oper Prod Manag 22(4):412–424CrossRefGoogle Scholar
  50. Schneller ES, Smeltzer LR (2006) Strategic management of the health care supply chain. Jossey-Bass, San FranciscoGoogle Scholar
  51. Souhrada L (1998) Sky’s the limit. Mater Manag Health Care 7(7):24–26Google Scholar
  52. Spear SJ (2009) Chasing the rabbit. McGraw-Hill Companies, New YorkGoogle Scholar
  53. Steinberg E, Khumawala B, Scamell R (1982) Requirements planning systems in the health care environment. J Oper Manag 2(4):251–259CrossRefGoogle Scholar
  54. Szulanski G (1996) Exploring internal stickiness: impediments to the transfer of best practice within the firm. Strategic Manag J 17(Winter special issue):27–43Google Scholar
  55. The Governance Committee (1997) Richest sources of savings, lessons from America’s lowest-cost hospitals. Advisory Board Company, WashingtonGoogle Scholar
  56. Thorsfeldt H (1988) Why today’s central service is an integral part of materiel management. Hosp Mater Manag Q 9(3):63–70Google Scholar
  57. Tucker AL, Edmondson AC (2003) Why hospitals don’t learn from failures. California Manag Rev 45(2):55–72CrossRefGoogle Scholar
  58. Tudor TL, Wollridge AC, Bates MP, Philips PS, Butler S, Jones K (2008) Utilizing a “systems” approach to improve the management of waste from health care facilities: best practice case studies from England and Wales. Waste Manag Res 26(3):233–240CrossRefGoogle Scholar
  59. Tudor TL, Townend WK, Cheeseman CR, Edgar JE (2009) An overview of arising and large-scale treatment technologies for health care waste in the United Kingdom. Waste Manag Res 27(4):374–383CrossRefGoogle Scholar
  60. Tyagi RK, Vachon S, Landry S, Beaulieu M (2010) Reverse supply chain in hospitals: lessons from three case studies in Montreal. In: Ferguson ME, Souza GC (eds) Closed-loop supply chains—new developments to improve the sustainability of business practices. CRC/Taylor & Francis Group, Boca Raton, pp 181–194CrossRefGoogle Scholar
  61. Thitchie L, Burnes B, Whittle P, Hey, R (2000) Benefits of reverse logistics: the case of the Manchester Royal Infirmary Pharmacy, Supply Chain Management 5(5): 226–233.Google Scholar
  62. Winter SG (1995) Four Rs of profitability: rents, resources, routines, and replication, Montgomery CA resource-based and evolutionary theories of the firm. Kluwer Academic, Boston, pp 144–178Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.HEC MontréalMontréalCanada

Personalised recommendations