- Research commissioned by CEVA shows logistics innovation can reduce operating cost and bring organizational and financial benefits
- Three areas for improvement in Public Healthcare logistics identified; outsourcing of logistics and transport, centralization of warehousing activity and the personalization and traceability of drug therapies.
Milan, Italy, 21 June 2011 – SDA Bocconi School of Management has conducted research on behalf of CEVA Logistics, a leading global supply chain management company, to identify the opportunities to improve supply chain management in the Public Healthcare sector.
Logistics in the Public Healthcare sector is often considered a non-strategic activity, leading to it being managed in a traditional manner. The results of the research demonstrate that efficient and advanced logistics can tangibly improve the management of Public Healthcare organizations:
- Processes become more aligned with the needs of hospital wards
- The optimization of inventories and lower inventory of drugs and medical devices allows financial savings
- Innovative logistics can support optimized human resources management, leading to a reduction in related costs and a switch of resources to higher added value activities.
The research was based on the development of a specific framework to assess supply chain innovation impacts in the Public Healthcare sector such as:
- Reduced operational costs related to the use of technologies, warehouse management, human resources and outsourced services
- Organizational benefits linked to quality, security, correctness and standardization of services, optimization of human resources management and supplier management
- Financial benefits through improved inventory management.
The framework was then applied to national and international case studies, successful in managing similar operations. This led to the identification of three main areas for improvement in Public Healthcare logistics; the outsourcing of logistics and transport, centralization of warehousing activity and the personalization and traceability of drug therapies.
Carlo Rosa, Managing Director of CEVA Logistics, Italy, said: “The cases of excellence analyzed in SDA Bocconi’s research demonstrate that is possible to gain significant benefits from the introduction of advanced and flexible logistics solutions in a sector, such as Public Healthcare, which is often still managed in a traditional way. CEVA has gained extensive expertise in the Healthcare and Beauty industry at an international level and has developed similar excellent solutions for different market segments. We want to implement best global practices and offer our expertise and our professionalism in order to support healthcare organizations in the re-engineering of their supply chains, improving efficiency and optimizing costs.”
Outsourcing logistics and transport management to a qualified and professional logistics operator
When Local Public Healthcare organization (AUSL – Azienda Unità Sanitaria Locale) in Forlì, Italy outsourced the transportation of medical devices and patients, it led to a reduction in management costs of €950,000 per year. ULSS 8 of Asolo, Italy achieved a 25% reduction in inventory by outsourcing its warehouse management, which corresponds to savings of approximately €1 million per year.
Centralized and shared warehouse management
ESTAV (a Technical and Administrative Services Agency set up specifically to manage Wide Geographical Area in the region of Tuscany) has centralized the supply chain management for all its Healthcare entities in the region, with subsequent savings of €5.3 million per year in management costs and a 50% inventory reduction, totaling €30.5 million per year.
Personalization and traceability of drug therapies
The Hospital Vall d’Hebron, in Barcelona, Spain, has achieved a 50% error reduction in administering medicines. Moreover integrated logistics management, computerization and the implementation of automated solutions have led to an inventory reduction of 35%, delivering savings of approximately €2 million per year. The improved inventory management has also reduced the need to dispose out of date drugs saving €200,000 per year, with a total reduction in pharmaceutical expenditure of two percent.
Alberto Grando, Dean of SDA Bocconi School of Management, commented: “This research has enabled us to understand how logistics, if entrusted to competent operators, can bring significant benefits to Public Healthcare organizations, which increasingly need to limit costs and rationalize administrative and technical processes. This study is the first step towards wider research which will analyze a significant sample of organizations in the country. Through the identification of ways to optimize supply chain processes in this sector and the expected benefits from logistics innovations, we intend to suggest guidelines that can be implemented by medical organizations across Italy, regardless of the territory in which they operate, in order to optimize their supply chain.”
One of the main requirements for organizations operating in the Public Healthcare sector is to find new solutions to reduce system costs and manage clinical processes in a more efficient way. This research demonstrates that logistics, if managed by an excellent and expert partner able to support the reorganization of the supply chain, can add strategic value to a company, through lower cost, improved performance and enhanced service quality.
For more information contact:
Marketing & Communication Director, SEMEA
+39 02 8923 0354