A holistic approach to hospital material management process reengineering by means of the MRP algorithm

Abstract

The Hospital Materials Management (HMM) process deals with the coordination of all activities related to material ordering, holding, and administrating It is usually treated with a look-back approach (called AS IS process), 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. In this thesis, the possibility of reducing stocks while assuring a high service level to patients is analysed, proposing a new holistic approach to the supply chain management (called TO BE process). Medical information are used to issue materials orders (look-ahead approach), in a pulled 􀃀ow of information from bed to hospital pharmacy warehouses. The research has been carried out in two steps. The first one deals with the HMM modelling and the technical feasibility evaluation of the proposal. Taking into account the clinical requirements, a deep analysis of hospital processes has been carried out and a streamlined process - from medical prescription to hospital pharmacy orders - has been proposed, which allows materials traceability and information sharing while simplifying the activities accomplishment by operators. The process has been modelled by using the Business Process Model Notation. A new Information System prototype has been implemented and verified in terms of “clinical” completeness and usability in hospital setting. The second step copes with the mathematical formalization of HMM inventory policies and the economic assessment of the proposal. The AS IS and TO BE processes have been mathematically formalized. In particular, the AS IS process follows the Periodic Review Par Level servicing approach while the TO BE adopts the Materials Requirements Planning (MRP) method. A discrete event simulation model of both processes has been developed in Arena Rockwell software. A cost performance indicator of HMM has been defined taking into account tangible and intangible aspects. Drug demand data and HMM costs have been collected in a medium university hospital. The design of experiment has been developed to simulate different hospital working scenarios. It has been found that: cost savings can range, in dependence on the scenario, from 2% to 7%; the higher is the drug demand variability, the greater is the convenience of the proposal; the savings are slightly influenced by variations in external stockouts and pharmacy ordering costs. Moreover, the results show that, even in the traditional way to manage hospital inventory, managers should try to reach a balance between underage and overage material costs instead of keeping full warehouses. Results from this thesis have been published in several research papers (Iannone et al., 2011-2012-2013-2014 and Guida et al, 2012 a-b). [edited by author]