Vendor managed inventory (VMI): evidences from lean deployment in healthcare

An application of multi-criteria decision-making approach to sustainable drug shortages management: evidence from a developing country

Background

Drug shortage is a significant public health problem, especially for drugs related to life threatening conditions. Almost all countries affected by variety of supply problems and spent a considerable amount of time and resources responding to shortage. The aim of present study is to determine and prioritize strategies to achieve best solutions for these considerable healthcare system challenges and to evaluate this strategies base on practical criteria.

Methods

To achieve the study objectives, the research was conducted in two phases. Determining of the strategies to control drug shortage, and comprehensive assessments of priority of possible strategies. For each phase, a self-design questionnaire was developed. The five main managerial strategies dimensions including: regulatory, financial, supply chain, information system and policy-making were set out. Forty-five alternatives were elicited from literature, and were evaluated and trimmed to 37 strategies based on experts’ opinion. The Multiple criteria decision-making (MCDM) methods were applied in second phase. Five important criteria including cost, time, labor, compliance with law and culture were weighed by Analytic Hierarchy Process (AHP) technique. Then, 37 alternatives have been rated base on the five criteria on the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) technique.

Results

“Creating integrated Supply chain information system to manage medicines inventory in the country”, “Creating and using the databases to predict the shortage of medicines”, “Using track and trace system” are alternatives 20th, 24th and 25th, which related to supply chain (SC) and information system (IS) dimensions have higher priority in the experts’ point of view. The results show IS dimension has 100 percentage of priority; following that policy and supply chain have higher priority, respectively.

Conclusion

Health systems rely on consistent supplying of pharmaceuticals to support patient care. The results show that information system, policy-making and supply chain are in the top-ranking priorities. Warning system needs to be improved to the advance system via better collaboration with stakeholders, publish precise and explicit national guidelines for drug shortage management, enforce the guidelines, and improve Iran FDA’s pharmaceutical market control capability.

Application of a hybrid selective inventory control technique in a hospital: a precursor for inventory reduction through lean thinking

Purpose

The cost of providing healthcare is spiralling up in recent times. On the one hand, patients expect the highest quality of service, while on the other hand, the managers of the healthcare services want to minimise the total operating expenses. Hence, healthcare organisations implement lean thinking (LT) to achieve these twin objectives. LT reduces the eight wastes that are prevalent in the healthcare processes and functions. In particular, if the wasteful inventories related to expensive medical supplies are reduced, the resulting cost savings can help in providing affordable and accessible healthcare.

Design/methodology/approach

Hence, in this paper, a case study of a hospital is presented where LT is implemented. One of the projects was related to inventory reduction in the store of the catheterisation laboratory (cath lab). A hybrid methodology called multi-unit selective inventory control (MUSIC) that combined these three dimensions (3D), namely, consumption value, criticality and lead time or ease of availability was used to classify the medical supplies into different categories.

Findings

Based on the results obtained, various inventory systems and the associated tools and techniques of LT were proposed. For example, a deep dive into the A-class items revealed that some of the medical supplies fell under both vital and scarce categories. Hence, it was recommended that the case hospital should follow the economic order quantity (EOQ) with safety stock approach as these items were to be shipped from other states in India. Subsequently, the focus should be on developing a local supplier and attempts should be made to establish a kanban system with adequate information sharing.

Practical implications

This study demonstrates the step-by-step methodology of MUSIC-3D which would guide the procurement managers to apply the same in their organisation. It also helps them in identifying appropriate elements of LT for inventory reduction before the actual deployment.

Originality/value

None of the papers has utilised the MUSIC-3D methodology as a precursor for inventory reduction, specifically within the domain of LT. Similarly, identifying and proposing different type of inventory systems and various LT practices based on this unique method is a novel attempt.

Literature review on supply chain collaboration: comparison of various collaborative techniques

Purpose

The purpose of this paper is to create an understanding on the magnitude and dimension of supply chain collaboration (SCC) reported in the literature. The detailed review discusses various indicators that help companies to implement collaboration successfully and create awareness on the barriers faced while initiating collaboration in supply chain (SC).

Design/methodology/approach

The meta-analysis includes full-text papers retrieved from the Web of Science database using verified keywords. The articles are reviewed for identifying the performance indicators used to evaluate the SC. The systematic review is performed for the collaborative techniques in the following categories: information sharing (IS); vendor managed inventory; and collaborative planning, forecasting and replenishment. The papers are then comprehensively analyzed for the approaches, and the key findings are mentioned along with the future scope.

Findings

The review suggests that the SC relationship, trust, quality of IS and technological involvement are to be focused for successful implementation of the collaborative technique. Proper collaboration helps SC partners to enhance their technique of operations in an effective manner which results in high business turnovers.

Originality/value

The review paper provides a quantitative study of SCC. A bird’s eye view of the scopes and benefits of using SCC for the academic scholars and industrial personnel are the primary concern discussed.

Lean implementation in healthcare supply chain: a scoping review

PURPOSE

The purpose of this paper is to identify the lean production (LP) practices applied in healthcare supply chain and the existing barriers related to their implementation.

DESIGN/METHODOLOGY/APPROACH

To achieve that, a scoping review was carried out in order to consolidate the main practices and barriers, and also to evidence research gaps and directions according to different theoretical lenses.

FINDINGS

The findings show that there is a consensus on the potential of LP practices implementation in healthcare supply chain, but most studies still report such implementation restricted to specific unit or value stream within a hospital.

ORIGINALITY/VALUE

Healthcare organizations are under constant pressure to reduce costs and wastes, while improving services and patient safety. Further, its supply chain usually presents great opportunities for improvement, both in terms of cost reduction and quality of care increase. In this sense, the adaptation of LP practices and principles has been widely accepted in healthcare. However, studies show that most implementations fall far short from their goals because they are done in a fragmented way, and not from a system-wide perspective.

Factors impacting technology adoption in hospital bed logistics

Purpose

The purpose of this paper is to refine and expand technology adoption theory for a healthcare logistics setting by combining the technology–organization–environment framework with a business process management (BPM) perspective. The paper identifies and ranks factors impacting the decision to implement instances of technologies in healthcare logistics processes.

Design/methodology/approach

A multiple case study is carried out at five Danish hospitals to investigate the bed logistics process. A combined technology adoption and BPM lens is applied to gain an understanding of the reasoning behind technology adoption.

Findings

A set of 17 factors impacting the adoption of technologies within healthcare logistics was identified. The impact factors perceived as most important to the adoption of technologies in healthcare logistics processes relate to quality, employee work conditions and employee engagement.

Research limitations/implications

This paper seeks to understand how managers can use knowledge about impact factors to improve processes through technology adoption. The findings of this study provide insights about the factors impacting the adoption of technologies in healthcare logistics processes. Differences in perceived importance of factors enable ranking of impact factors, and prioritization of changes to be implemented. The study is limited to five hospitals, but is expected to be representative of public hospitals in developed countries and applicable to similar processes.

Originality/value

The study contributes to the empirical research within the field of BPM and technology adoption in healthcare. Furthermore, the findings of this study enable managers to make an informed decision about technology adoption within a healthcare logistics setting.

Toyota Kata as a KM solution to the inhibitors of implementing lean service in service companies

Purpose

This paper aims to resolve the inhibitors of lean service using knowledge management (KM) concepts through the use of Toyota Kata. To achieve this, the authors updated the research on lean supportive practices and inhibitors of lean technical practices presented by Hadid and Afshin Mansouri (2014) through a systematic literature review (SLR). The SLR focused on empirical studies/cases from the past 15 years and confirmed the inhibitors of lean technical practices. As a result, Toyota Kata is proposed as a KM solution to the inhibitors of lean service implementation in service companies.

Design/methodology/approach

The authors carried out an SLR to identify inhibitors of lean service in real case applications and analyzed the resulting bibliographic portfolio using KM as a lens, along with three theories: universal theory, socio-technical systems theory and contingency theory, which assist in highlighting and clarifying the potential impact of using Toyota Kata as a solution to the inhibitors of lean technical practices.

Findings

When the authors analyzed the inhibitors of lean technical practices, they discovered that there is a strong relationship between the inhibitors and the individual (staff) personal characteristics regarding commitment, involvement, communication and preparation. These inhibitors and characteristics should work as a system, and Toyota Kata improves people’s skills and process performance by connecting people, processes and technology. Also, the authors noted that the Toyota Kata concept used can provide benefits in the implementation of lean service for companies, such as the internalization of continuous improvement, this becoming part of the company culture. Moreover, it has been demonstrated that Toyota Kata provides an effective way to achieve KM.

Research limitations/implications

This study may not have enabled a complete coverage of all existing peer-reviewed articles in the field of practices and inhibitors presented by Hadid and Afshin Mansouri (2014). However, it seems reasonable to assume that in this review, a large proportion of the studies available was included.

Practical implications

This paper opens a new perspective on the use of Toyota Kata by managers as a solution to implement KM, spinning the spiral of knowledge.

Originality/value

This is the first study that seeks empirical evidence of inhibitors of lean technical practices and proposes Toyota Kata as a KM Solution for these issues. As a result, this study advances the facility to overcome these inhibitors, opening a new perspective for management to lead in achieving operational excellence.

The adoption of vendor managed inventory for hospital pharmaceutical supply

Purpose

The purpose of this paper is to investigate vendor managed inventory (VMI) for the supply of medicines between distributors and hospitals to identify factors that may affect VMI adoption.

Design/methodology/approach

Two contrasting VMI initiatives involving five organizations (three hospitals, one distributor and one manufacturer/supplier) are studied. A case study method with semi-structured interviews is used with triangulation in data collection, site visits and document analysis to enhance reliability and validity. The cases are analyzed and compared with respect to hospital, supplier, product and supply chain integration characteristics.

Findings

A successful public sector VMI initiative and an unsuccessful private sector VMI initiative are identified. The public sector supplier focuses on improving service level while the private sector supplier seeks to strengthen relationships with a key customer. Hospital characteristics, including type of hospital, top management perspectives and the hospital’s willingness to share information, are critical in decisions on VMI initiation or termination. Relatively stable demand products are preferred for a VMI approach. Hospitals may perceive risks in VMI adoption for medicines as it involves relinquishing control of critical supplies and may result in “lock-in” with a particular supplier.

Research limitations/implications

The cases have been conducted in one country, which may affect generalization of the findings. Wider empirical evidence from other countries in both developed and less developed regions will be beneficial.

Practical implications

VMI is advocated as being beneficial in many supply contexts. However, it is challenging to implement. The study identifies factors that affect the adoption of VMI for hospital pharmaceuticals and provides guidance on initiating VMI in a hospital context.

Social implications

The potential for VMI in public health projects to enable greater access to critical medicines is highlighted.

Originality/value

The paper provides supply side and demand side perspectives on VMI adoption in an important sector. It highlights the need for greater understanding of the perceived and actual risks in VMI from the perspective of both the hospital and the supplier and for much clearer advice on which pharmaceutical products are appropriate for VMI control in a hospital context.

Do changes to supply chains and procurement processes yield cost savings and improve availability of pharmaceuticals, vaccines or health products? A systematic review of evidence from low-income and middle-income countries

Introduction

Improving health systems performance, especially in low-resource settings facing complex disease burdens, can improve population health. Specifically, the efficiency and effectiveness of supply chains and procurement processes for pharmaceuticals, vaccines and other health products has important implications for health system performance. Pharmaceuticals, vaccines and other health products make up a large share of total health expenditure in low-income and middle-income countries (LMICs), and they are critical for delivering health services. Therefore, programmes which achieve cost savings on these expenditures may help improve a health system's efficiency, whereas programmes that increase availability of health products may improve a health system's effectiveness. This systematic review investigates whether changes to supply chains and procurement processes can achieve cost savings and/or improve the availability of drugs in LMICs.

Methods

Using the PRISMA guidelines for systematic reviews, we searched PubMed, Embase, CINAHL and the Health Economic Evaluation Database to identify.

Results

We identified 1264 articles, of which 38 were included in our study. We found evidence that centralised procurement and tendering can achieve direct cost savings, while supply chain management programmes can reduce drug stock outs and increase drug availability for populations.

Conclusions

This research identifies a broad set of programmes which can improve the ways that health systems purchase and delivery health products. On the basis of this evidence, policymakers and programme managers should examine the root causes of inefficiencies in pharmaceutical supply chain and procurement processes in order to determine how best to improve health systems performance in their specific contexts.

Lean Thinking in Global Health Care

This chapter explains the overview of Lean production; the overview of value stream mapping (VSM); the applications of Lean production in global health care; the implementation of Lean production in global health care; and the challenges and implications of Lean production in global health care. Lean production can be used to identify and eliminate the wastes in any health care activity performed within a health care facility. Lean production can be applied to hospitals and health care organizations to redesign health care processes toward improving the quality of care and reducing costs and wastes. Successful Lean health care efforts result in the measurable improvements in patient outcomes, such as improved quality, less harm due to preventable errors, better access, shorter waiting times, and better service. Implementing Lean production has the potential to enhance health care performance and gain sustainable competitive advantage in global health care.

Supply chain and total quality management framework design for business performance-case study evidence

Purpose

– The purpose of this paper is to identify the importance of integration of supply chain management practices with total quality management (TQM) practices to augment business performance. The objective of paper is to focus on the two important dimensions, namely, supply chain and TQM of an organization with special reference to the concepts: exploration and exploitation.

Design/methodology/approach

– In total, 20 variables have been identified (independent variables) which impact business performance (dependent variable). Variables have been extracted into four categories with a combination of two orientations, i.e., exploitation and exploration, with respect to quality management and supply chain practices.

Findings

– Configurationally four different combinations concerning supply chain and TQM were identified in which an enterprise can operate. This is supported with the four different case studies.

Practical implications

– This study leads to some interesting practical implications for practicing managers as it offers a framework in which the supply chain and TQM practices can be implemented with respect to an organizational structure (mechanistic or organic structure), environmental conditions (uncertain environment and rapidly changing product life cycle) and identification of customer orientations (whether customer is price sensitive or customer makes buying decision on account of trust or relation to the product).

Originality/value

– The concept of supply chain exploitation and supply chain exploration with different orientations of quality management is not studied comprehensively before. This paper provides a background for establishing a framework of strategies for supply chain and quality practices, with respect to the exploitation and exploration scenario.

Towards a framework for enhancing procurement and supply chain management practice in the NHS: lessons for managers and clinicians from a synthesis of the theoretical and empirical literature

Background

This review provides intelligence to NHS managers and clinicians involved in commissioning and procurement of non-pay goods and services. It does this in the light of ongoing pressure for the NHS to save money through a combination of cost cutting, productivity improvements and innovation in service delivery, and in the context of new commissioning structures developing as a result of the Health and Social Care Act 2012 (Great Britain.Health and Social Care Act 2012. Chapter 7. London: The Stationery Office; 2012).

Objectives

We explore the main strands of the literature about procurement and supply chain management (P&SCM); consider the extent to which existing evidence on the experiences of NHS managers and clinicians involved in commissioning and procurement matches these theories; assess how the empirical evidence about different P&SCM practices and techniques in different countries and sectors might contribute to better commissioning and procurement; and map and evaluate different approaches to improving P&SCM practice.

Review method

We use a realist review method, which emphasises the contingent nature of evidence and addresses questions about what works in which settings, for whom, in what circumstances and why. Adopting realist review principles, the research questions and emerging findings were sense-checked and refined with an advisory group of 16 people. An initial key term search was conducted in October 2013 across relevant electronic bibliographic databases. To ensure quality, the bulk of the search focused on peer-reviewed journals, though this criterion was relaxed where appropriate to capture NHS-related evidence. After a number of stages of sifting, quality checking and updating, 879 texts were identified for full review.

Results

Four literatures were identified: organisational buying behaviour; economics of contracting; networks and interorganisational relationships; and integrated supply chain management (SCM). Theories were clustered by their primary explanatory focus on a particular phase in the P&SCM process. Evidence on NHS commissioning and procurement practice was found in terms of each of these phases, although there were also knowledge gaps relating to decision-making roles, processes and criteria at work in commissioning organisations; the impact of power on collaborative interorganisational relationships over time; and the scope to apply integrated SCM thinking and techniques to supply chains delivering physical goods to the NHS. Evidence on P&SCM practices and techniques beyond the NHS was found to be highly fragmented and at times contradictory but, overall, demonstrated that matching management practice appropriately with context is crucial.

Conclusions

We found that the P&SCM process involves multiple contexts, phases and actors. There are also a wide variety of practices that can be used in each phase of the P&SCM process. Thinking about how practice might be improved in the NHS requires an approach that enables the simplification of the complex interplay of factors in the P&SCM process. Portfolio-based approaches, which provide a contingent approach to considering these factors, are recommended. Future work should focus on conflicting preferences in NHS commissioning and procurement and the role of power and politics in conflict resolution; the impact of power on the scope for collaboration in health-care networks; and the scope to apply integrated SCM practices in NHS procurement organisations.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.