Healthcare logistics: Integrating operations for better patient care

July 2010

With a constant rise in the demand for better treatment and services, hospitals are compelled to introduce better supply chain management services. This brings the hospitals and logistics companies closer, says Geetha Jayaraman, as she lists the various ways to ensure smooth functioning of healthcare logistics.

Hospital logistics has advanced over the past few years; there is still scope for betterment, with proper maintaining of stock and status of supply chain activities. Joy Chatterjee, Director – Administration, P D Hinduja National Hospital & Medical Research Centre, says, “Implementing best logistics system can reduce stocking of goods in the hospitals. This saves space and allows the medical staff to focus on critical patient care rather than managing the supply chain.”

Efficiency and timeliness are important factors to ensure seamless functioning of supply chain. At the same time, hospitals are also looking at other industries like automotive and retail in order to use the best supply chain management methods to ensure efficiency. These include delivery consolidation techniques, which would result in saving storage space and transportation cost. Dr Om P Manchanda, CEO, Dr Lal PathLabs says, “A logistics service provider to an organised large-scale and rapidly expanding medical diagnostics company such as Dr Lal PathLabs should ideally use various permutations and combinations in terms of mode of logistics for achieving minimum Turn Around Time (TAT) for inward movement of samples to consignee lab locations. The combinations may include the entire gamut of modes such as hub & spoke, direct to consignee location, On Train Courier (OTC), air connectivity, On Bus Courier (OBC), and biker courier boy.”

The need for logistics

Joy Chatterjee, Director - Administration, P D Hinduja National Hospital & Medical Research Centre

Healthcare logistics is not just about medical supply to hospitals. It also includes a number of other factors like blood stock, ambulance, test samples transported to various centres, etc. While the traditional mode of delivery will involve moving samples from hub to branch office, and then from branch office to delivery branch location, and subsequently to consignee lab location through courier, the industry now demands a direct delivery to consignee lab location. “One of the issues involved is temperature check at major hubs to ensure that the quality of sample is intact. Availability of dry ice & cool gel packs at hubs are important in case of a need to change dry ice and gel packs. The third factor involves keeping dedicated space in late evening and early morning flights for better connectivity,” avers Dr Manchanda. The logistics company must take care that there is no offloading of samples and there should be plans for emergency dispatch. Moreover, there should be dedicated staff to run in OTC/OBC routes. The other aspect is the constant demand for dedicated operations and customer service persons to handle the operations round the clock.  The last element that should be given utmost importance is logistics companies having inbound pick-up facility of samples from anywhere in the world within lowest amount of turnaround time.

A perfect channel

There should be a proper communication channel between the hospital & supplier and the purchasing group to ensure further value-addition in the supply chain. “End-to-end supply chain management will only be achieved if there is visibility of real demand as it happens and the mechanisms are in place to fulfil the demand at an appropriate cost,” says Chatterjee. This will strengthen the link between suppliers while automating manual processes. “Inventory visibility provides information to support supplier ensures production rationalisation and strategic purchasing. Along with re-engineering of the existing complex supply chain, proper resource management will lead to simplifying existing processes,” points out Chatterjee.  Dr Manchanda says, “The only parameter that sets the diagnostics segment apart from other service sectors in terms of logistics is the lowest minimum TAT under temperature controlled supply chain to reach to the laboratory. Apart from that, the second most important point is the way the sample is handled en route.”

Role of IT

Dr Om P Manchanda, CEO, Dr Lal PathLabs

Logistics companies are either over-serving customers (providing service to a customer for what he is unwilling to pay) or under-serving the customer. Chatterjee says, “By tracking consumption of products and services at product/location/patient level, hospitals can identify patient & procedure costs and get an idea of the quantity required thereby saving space and avoiding congestion in the hospital. Through effective stock and information management, manufacturers are able to control inventory levels and eliminate waste by tracking consumption at product/location/patient level.” Off-site storage of products allows manufacturers to offer Vendor Managed Inventory (VMI) service to local customers. A fully tracked-and-traced delivery to ward ensures that the right product ends up in right hands at the right time. “It is not organised yet. With the emergence of large scale players, this area too will see professional approach. Internationally, there are a few large players operating in this segment.  Indian markets are yet to realise the value of this given the price sensitive nature of the markets,” points out Dr Manchanda.

Outlook

Constant emphasis is put on providing high-spend logistics service in order to realise greatest purchasing efficiencies and inventory savings. As there is foreseeable demand and control of inventory, the next phase of integration with the supply base, is likely. As Dr Manchanda concurs, “One will definitely see the entry of organised players in this space. However, all of them will have to address price concerns. As the scale picks up, this area will continue to see growth.” This will help the suppliers to take greater ownership of supply chain management system, and apply new models to reach greater heights.

mmedit@infomedia18.in