When assessing hospitals and other health care institutions, it can be easy to forget that like any other business, they too need to optimize their internal processes and reduce operational costs wherever possible in order to survive in a harsh, competitive environment. On top of pressures to reduce costs, hospitals must manage the severe shortage of medical staff and limited facility capacities. The primary challenge that health care providers face is finding a balance between greater cost efficiency and achieving high quality care services.
Targeting supply chain and logistics processes is an effective way to achieve this balance, as operational costs can be reduced in a way that simultaneously reduces the time and effort spent on off-patient tasks, creating new capacity and therefore allowing medical staff to devote more time to patient care. According to a study by Navigant last year, hospitals in the U.S alone could reduce costs by up to 17.7% each year by making their supply chain processes and resource utilization more efficient.
Why internal logistics?
First of all, what is internal logistics in the context of a hospital? The internal logistics of a hospital refers to intra-hospital transport and the routing and scheduling of all physical goods (and patients) within a hospital, mainly from one central location to designated patient care units (A. Rais et al., 2018). Hospital logistics services are vitally important for resource availability and the management of patient, information and material flows- for goods such as pharmaceuticals, food, laundry, sterile equipment, laboratory samples, and waste. Hospital logistics is highly complex by nature, as there are, for example, some services that are constrained by periodicity and specific time windows- such as meal and medicine services, and others that are constrained by specific and exclusive handling requirements due to sensitive materials. Hospitals are essentially distribution networks; a successful internal logistics management system enables smooth communication and cooperation between the many workers and departments responsible in this network.
All of us will have experienced infuriatingly long waiting times for medical care at some point, whether it be in a hospital or during a visit to the local GP. But long waiting times and operational disruptions are more than just a nuisance; in some time-critical cases they can have potentially dangerous and long-standing consequences for patients. Waiting times occur when there is a mismatch between resources and needs, primarily due to poor planning and process failures. It is the job of the hospital logistics manager to ensure the availability of all hospital resources where and when they are needed, and to prevent delays in patient and material transports. An optimized internal logistics system would thereby directly reduce in-house waiting times, positively influencing patient satisfaction.
How can logistics operations be optimized?
Internal transportation is an area that is often neglected by hospital management, as you’ll find that many hospital managers are too preoccupied with driving down inventory costs and reducing waste through their procurement processes -which is obviously important- to recognize the full potential of an optimized transport management system. Ensuring smooth patient and material flows and greater cooperation starts with a dynamic scheduling and routing system. Nowadays, there are a number of intelligent centralized and integrated software systems available that schedule and route all transports automatically, while taking into account technical and organizational conditions. Integrated systems are able to assess all open transport orders and assign the respective orders to carriers depending on prefixed conditions and deployment information, such as a carrier’s location and the availability of transport devices. This enables a more efficient utilization of transport resources, reduces empty runs and prevents long delays due to fewer allocation errors.
Since roughly only 10% of hospital transports are booked a day or more in advance, and due to the many unpredictable changes in conditions that occur in hospitals, hospitals could benefit substantially from using a system that can plan in real-time and reorganize schedules within seconds. For example, the Ingolstadt University Hospital, the fourth largest acute care hospital in Bavaria, has been using an intelligent transport management system since 2006 to coordinate the use of its active and passive modes of transport, such as vehicles and haulers, and beds, wheelchairs and carts. The integrated system provides dispatchers with a real-time overview of all transport activities. Since the hospital first implemented the system, daily medical transports have increased by 50% and 95% of patients now only experience waiting times of less than 5 minutes before being picked up.
Another approach to transport optimization is the deployment of automated guided vehicles (AGVs) or mobile robots (AMRs) for material transports. There are several benefits associated with using robots to deliver and retrieve hospital supplies, one of them being that they can relieve the workload burden and help address staff shortages. Furthermore, robots can operate 24/7 and are less error-prone than human workers. Aethon’s TUG robot is a quite well-known example of an AMR, designed specifically for hospital use. The autonomous mobile robot uses a built-in map and sensors to navigate its way through the hospital and can communicate with elevators, fire alarms and automatic doors via Wi-Fi. On top of its user-friendly set up, the company claims that it can reduce the cost-per-delivery for hospital supplies by 80%. For security purposes, for goods such as medicines and samples staff have to use a fingerprint ID to open the TUG compartment. However, there are concerns remaining over corridor traffic and whether AGVs and AMRs will travel too slowly or cause obstruction. AGVs and AMRs also pose potentially high initial investment costs as well as maintenance costs and so may not be a feasible option for hospitals with less capital.
Final thoughts
In the past, it has been estimated that hospitals can spend up to 46% of their operating budgets on logistics related activities. Optimizing internal logistics may not be at the top of a manager’s priority list but just by implementing an intelligent software-based scheduling system, for example, hospitals can save up to 40% on internal transport costs. It is also a great opportunity to improve staff workloads, reduce waiting times and, ultimately, increase patient satisfaction and safety.
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