Title: Cost savings in hospital materials management: look-back versus look-ahead inventory policies

Authors: Raffaele Iannone; Alfredo Lambiase; Salvatore Miranda; Stefano Riemma; Debora Sarno

Addresses: Department of Industrial Engineering, University of Salerno, Fisciano, SA, Italy ' Department of Industrial Engineering, University of Salerno, Fisciano, SA, Italy ' Department of Industrial Engineering, University of Salerno, Fisciano, SA, Italy ' Department of Industrial Engineering, University of Salerno, Fisciano, SA, Italy ' Department of Industrial Engineering, University of Salerno, Fisciano, SA, Italy

Abstract: The hospital materials management process deals with the coordination of all activities related to materials ordering, holding, and administering. It is usually treated with a look-back approach, by which materials are 'pushed' into the hospital on the basis of demand forecasts, while high stock levels are distributed throughout the system to prevent stockouts. This study analyses the possibility of reducing stocks while assuring a high service level to patients, and proposes an integrated approach to the supply chain. Medical information is used to issue orders (look-ahead approach), in a 'pulled' flow of information from bed to hospital pharmacy warehouses. The two approaches are compared by means of a discrete event simulation in different scenarios: cost savings can range from 2% to 7%; the higher the demand variability, the greater the convenience; the savings are slightly influenced by variations in external stockouts and pharmacy ordering costs.

Keywords: material requirements planning; MRP; hospital information systems; HIS; healthcare management; operations management; physician order entry; simulation; pharmaceutical supply chains; hospital inventory policies; hospital cost savings; hospital materials management; stock reduction; patient service; supply chain management; SCM; demand variability; external stockouts; pharmacy ordering costs.

DOI: 10.1504/IJSOM.2015.070883

International Journal of Services and Operations Management, 2015 Vol.22 No.1, pp.60 - 85

Received: 04 Feb 2014
Accepted: 23 May 2014
Published online: 31 Jul 2015 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article