Strategic Inventory Control in Hospital Supplies

Nowadays, the healthcare system faces many challenges, and growing expenditures is one of the topical issues. Indeed, it is important to optimize the cost of the services while maintaining the required quality. Nevertheless, today’s hospital organization remains highly complex, making it difficult to reach the desired level of cost-efficiency. The sphere’s overall orientation on human health-based aspects is another factor contributing to the situation. As a result, medication is often purchased and supplied without any plans in terms of financial optimization and cost-efficiency. At the same time, many drugs remain expired or never used, implying that the funds were not allocated efficiently. An approach based on Operation Research (OR) may help discern the underlying issues and eradicate them, leading to a more efficient distribution of medication and equipment. The analysis should take into account a typical supply chain for the hospitals, which consists of three levels. First of all, suppliers provide the required amount of equipment and medication, which are then accumulated at the central pharmacy. Following the initial purchase, drugs are distributed between different wards and departments.

Research shows that delivery schedules and quantity play a crucial part when decisions are made regarding medication supplies to hospital units. The latter cannot purchase drugs directly from the supplier, which is why the central pharmacy serves as a mediator. While hospital units may have specific preferences in terms of delivery schedules based on their operations, suppliers work differently. At the same time, it is in suppliers’ best interest to gain maximum profits. Generally, there are particular tariffs for delivery, making it cheaper to purchase large bundles at once. Therefore, the priorities vary at every stage of the supply chain, as each party is determined to accomplish its objective. This tendency has entailed the discussed situation, in which resources are not utilized efficiently, increasing the cost of healthcare without an immediate impact on the quality of services.

Operation research in the context of inventory control is applied in various settings, including manufacturing industries. The research suggests that similar methods can be effectively used in the sphere of hospital supplies, as well. In this case, the central pharmacy should remain the center of decision-making. However, the approach must be altered in light of the other parties’ interests. For example, it is wise to utilize the bundle approach, according to which the medication should be purchased in large portions, thus decreasing supply tariffs. Simultaneously, instead of being directly redistributed to hospital units, medication and equipment should be accumulated at the central pharmacy and delivered upon justified requests. An in-depth operation analysis is required at every stage to minimize costs and optimize the process. As the present issues have emerged due to a lack of effective communication, it is important to ensure the involvement of all supply chain elements in the process.

Overall, the issue of inefficient spending is, indeed, topical in today’s healthcare. The existing supply chain comprises three levels, but there are different priorities at each stage. As a result, medication and equipment are purchased in large bundles at a particular time to prevent a deficit. Nevertheless, drugs often remain unused until they expire following this supply method, and health service costs increase. An in-depth operation analysis on the strategic level can optimize the process through supply planning at the level of central pharmacies, without a negative impact on the healthcare quality. This way, supplies will be able to make profits, while hospital units will be provided with necessary drugs and equipment with decreased expenditures.

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StudyCorgi. 2022. "Strategic Inventory Control in Hospital Supplies." February 24, 2022. https://studycorgi.com/strategic-inventory-control-in-hospital-supplies/.

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