Overcoming hospital supply room problems

Small hospital, big challenges

A 70-bed hospital in Pakistan was struggling to effectively manage its central supply room. Stock levels were too high, medicines and chemicals were expiring before they got used, and there were inefficient peaks and troughs in workload for the supply room. The result was wasted supplies and resources, capital that was tied up, and a large overtime bill.

Dr Simon Peter Nadeem is a Lecturer in Operations Management and Logistics and Supply Chain Management in our College of Business, Law and Social Sciences. He had worked at hospitals in Pakistan during the early part of his career, so was passionate about using his expertise to help.

“I wanted to apply my knowledge of lean thinking and modern inventory management principles to help this hospital,” he explains. “I knew that, if I could help it reduce its financial losses, better manage its supplies and streamline its processes, then it could continue providing the critical medical care that its patients so desperately needed.”

Taking stock

The hospital’s remote location was a key factor in its problems, making deliveries more difficult and vulnerable to disruption. To avoid running out of essentials and putting patient lives at risk, staff over-ordered supplies.

Dr Nadeem knew the solution to this would involve better inventory management combined with improved supply chain and procurement practices. He first conducted a ‘Gemba walk’ of the central supply room. This meant walking through the supply room, talking to employees and observing how processes operate in practice.

“The Gemba walk was a tool originally developed for lean manufacturing,” explains Dr Nadeem. “It helped remind managers about the importance of visiting the production floor and seeing how a specific operation is done. However, it’s now been adopted by many other industries for process improvement.”

Together, Dr Nadeem and the hospital staff then produced two process flow maps. One represented how things currently operated and the other represented a ‘future’ process to aspire to. He and the staff also conducted a detailed analysis of current and potential new suppliers as well as a thorough stock-take.

Taking action

Now equipped with all the information he needed, Dr Nadeem started to make some important changes, with help from supply room staff. “Firstly, we reorganised the supply room to provide better ‘visual management’,” he explains. “This is an important tenet of lean management and means simply that everyone entering a workplace can see, understand and be able to manage every element of a process at a glance. We used tools such as 5S (Sort, Set in order, Shine, Standardize, Sustain) and the FIFO (first in, first out) inventory method to make this possible.”

Alongside this, they installed a simple computerised system for inventory control. This alerted staff automatically when items needed ordering or when items were close to expiry. And, crucially, they developed a better pool of suppliers to diversify risk, and persuaded suppliers to agree to more frequent, smaller deliveries.

To resolve the issue with overtime caused by peaks and troughs in workload, the team developed a system to manage internal supply better. By scheduling different departments’ supplies at different times of the day, with the exception of emergencies, the workload evened out.

Reaping the rewards

The project delivered some outstanding results for the hospital, including an 85% reduction in medicines expiring and cutting overtime almost completely (99% reduction)

"It's been an honour to work with this hospital,” says Dr Nadeem. “We’ve made effective improvements to achieve efficiency that have directly affected the bottom line. We have enabled staff to continue their important work, providing medical and surgical care to patients from rural areas and the war-wounded.”