Description
Materials management is an important issue for healthcare systems because it influences clinical and financial outcomes. Before selecting, adapting and implementing leading or optimized practices, a good understanding of processes and activities has to be developed.
International Journal of Engineering Business Management
Modelling Hospital Materials
Management Processes
Regular Paper
Raffaele Iannone
1
, Alfredo Lambiase
1
, Salvatore Miranda
1
,
Stefano Riemma
1
and Debora Sarno
1,*
1 Department of Industrial Engineering, University of Salerno, Via Ponte Don Melillo, Fisciano, Italy
* Corresponding author E-mail: [email protected]
Received 8 March 2013; Accepted 30 April 2013
DOI: 10.5772/56607
© 2013 Iannoneet al.; licensee InTech. This is an open access article distributed under the terms of the Creative
Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use,
distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract Materials management is an important issue for
healthcare systems because it influences clinical and
financial outcomes. Before selecting, adapting and
implementing leading or optimized practices, a good
understanding of processes and activities has to be
developed.
In real applications, the information flows and business
strategies involved are different from hospital to hospital,
depending on context, culture and available resources; it
is therefore difficult to find a comprehensive and
exhaustive description of processes, even more so a clear
formalization of them.
The objective of this paper is twofold. First, it proposes an
integrated and detailed analysis and description model
for hospital materials management data and tasks, which
is able to tackle information from patient requirements to
usage, from replenishment requests to supplying and
handling activities. The model takes account of medical
risk reduction, traceability and streamlined processes
perspectives. Second, the paper translates this
information into a business process model and
mathematical formalization.
The study provides a useful guide to the various relevant
technology-related, management and business issues,
laying the foundations of an efficient reengineering of the
supply chain to reduce healthcare costs and improve the
quality of care.
Keywords Hospital Materials Management, Business
Process Modelling, Healthcare Information System,
Drugs Inventory Management, Healthcare Logistics,
Computer Physician Order Entry
1. Introduction
Progressive reduction in public resources – and the
subsequent need to restore budgets – means
governments are responsible for finding solutions to
achieve more operational efficiency in hospital
processes. Drug expenditure, in particular, is a
relevant factor in the profit and loss accounts of
healthcare systems ([1, 2]); hospital pharmacy
management is called upon to adopt policies to reduce
drug inventory costs and maximize the cost-effective
use of personnel and resources [3-5].
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
1
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ARTICLE
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Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013
Awareness of logistics is becoming more widespread and
many initiatives and studies dealing with supply chain
integration have been undertaken (for example, supply
outsourcing strategies [6, 7]). However, the internal
supply chain (vs. external, i.e., beyond the boundaries of
an organization) “remains the sore spot or weak link” [8]
in process integration and optimization. This lack of
systemic approach to internal supply chain management
is reflected in huge costs in materials management and
low service quality delivered to patients [9].
Hospital materials management (HMM) also involves the
clinical sphere of healthcare service performance. Clinical
errors in drug prescription and administration, for
example, are always possible, depending on human
factors and procedural issues.
Regarding resource use optimization, the difficulties of
transferring manufacturing best practice directly to the
hospital environment are evident [10], although the first
sector of intervention is inventory management (see, for
example, [8]). It is conceivable to suppose that the main
cause of inefficiency is the existence of hidden stocks to
avoid stock-outs [10], which would be more politics- and
experience- rather than data-driven [6].
It is clear that a significant percentage of a pharmacist’s
time is consumed by order entry, verification,
clarification, and follow-up activities [11]; the same
applies for nurses with prescription transcriptions, stock
level control and administration.
In order to achieve a comprehensive image of the HMM
process and potential ways of exploiting IT to enable an
efficient reengineering of this supply chain, reducing
healthcare costs without affecting the quality of care [1], it is
fundamental to consider the previously presented logistical
and clinical perspectives as both sides of the same coin.
In the literature, there are many collateral references on
how materials management works; in real cases analysed,
information systems are usually built for fragmented
applications, and much information is lost or is not
recorded when it flows through processes. This implies
losses in traceability and increases in clinical risk, while
inventory management techniques and logistics are
hardly performed, causing high inventory costs.
The objective of this paper is twofold. First, on the basis
of a literature review, analysis of real cases and
international guidelines, the paper fills a research gap,
providing an integrated and detailed analysis and
description of hospital materials management data and
tasks (able to tackle information from patient
requirements to usage, from replenishment requests to
supplying and handling activities) in relation to medical
risk reduction, traceability and streamlined processes
perspectives. Secondly, the paper translates this
knowledge into a business process model and a
mathematical formalization, showing the integrated
information and physical flows in order to trace and
share data among actors with the aim of reducing clinical
risk and time-consuming tasks while enabling
requirement programmability and, more in general,
knowledge management.
The paper is structured as follows: after the materials
under examination are defined, the materials, processes
and actors are described in section 2. Details about
process modelling and formalization are given in section
3, and in section 4 the performance results of a case study
are presented. Finally, conclusions and suggestions for
possible further research are presented.
2. HMM elements: materials, processes and actors
The first step in the hospital pharmacy “micro-world”
reengineering process is to identify the behaviour of this
system, to establish for example what to manage in terms
of materials (par. 2.1), processes (par 2.2) and actors (par.
2.3), taking into account information and legal
constraints.
2.1 Materials and places
Management of materials in healthcare involves two
kinds of item clusters: drugs (or medicines) and medical
devices, subjected to different regulations harmonized by
countries according to international guidelines. The
properties of medicines in a hospital information system
may be mandatory or optional depending on the
contextual workflow [12]. A fundamental “identifier” is
the ATC (Anatomic – Therapeutic – Chemical)
classification, internationally accepted and maintained by
the World Health Organization. In addition to
commercial drugs, drug administrations can also refer to
galenics, such as personalized medicines prepared as a
“mixture” of commercialized products at the bedside, in
hospital pharmacy or in another defined medical unit. In
parallel, medical devices, such as surgical kit and
apparatus, can be managed as single or grouped items by
pharmacists. The item list (in other words, the set of
medicines or medical devices that can be
administered/dispensed to or implanted in patients in a
healthcare system) changes from hospital to hospital,
depending not only on the healthcare services managed,
but also on the physician’s expertise and preferences, and
following pharmaco-economics principles [13].
Regarding places of materials management and
dispensing, it is possible to distinguish between clinical
and managerial perspectives. From a clinical point of
view, the usefulness of having centralized patient-
oriented pharmacy services to deliver professional
services to the patient has been recognized [14, 15]. From
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 2
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a manageria
possibility o
pharmacy sy
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Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
3
www.intechopen.com
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. Variations in
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hroughout the
to clinical risk
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prescription,
anamnesis
and (a.2)).
alidations (if th
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o the input of
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try regulation,
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be composed,
nd Physician),
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,
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Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 4
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The active substance(s), as stated above, is usually a key
element because it can permit evaluations about
pharmaco-economics and availability (for example, to
distribute the cheapest brand name stored in satellite or
central pharmacies or to prescribe what is stored in the
local warehouse), but the clinical consideration can imply
a more rigid selection.
In the case of surgical intervention, some materials have
to be explicitly prescribed (for example, an orthopaedic
prosthesis and its size or surgical kit).
Considering the data related to inventory management
activities, the output of this phase is one or a list of records of
prescriptions (p) for each patient, formalized as follows.
The time base unit of administration schedule and
evaluation of requirements is the time buckets (?
?
), with
? ? ??
?
? ?? ?
?
? ?? ?
?
? being a given observation time (T).
In particular, having defined:
? ? ?? drug with the attributes:
Nf: number of units contained in a package of f
LTf: supplier lead time, time between the ordering
and the delivery of a supply order
? ? ?, Medical Unit belonging to a hospital with the
attribute:
TTm: time needed to transport orders from the
pharmacy to the medical unit m.
The classical prescription record for a patient is composed of:
? ? ?, hospital prescription for a single drug f, with:
tsp: time bucket at which the physician states the
prescription p
tap: scheduled administration time bucket for the
prescription p
DRp: drug prescribed f, chosen from ?
Qp: administration quantity
MUp: medical unit where the patient is hospitalized
m, belonging to M.
3.1.2 Exams prescription (a.1.2)
The physician can prescribe some diagnostic
examinations to patients, such as laboratory exams (e.g.,
blood, RX) or other activities that require materials.
3.1.3 Pharmacy Prescription Validation (a.2)
After a prescription, prescription information may be made
available to pharmacists for a pharmacy validation. It can be
advisable but not mandatory, so that many organizations
tend to jump this step. This implies no double reviews and,
hence, no possibility of medical error reduction [13].
A detected problem can be a supply issue (suspended
medication, out-of-stock, etc.), a legal issue (medication
recalled or not allowed under certain conditions), or a
medical issue (redundancy, interaction, contra-indication,
ICA, etc.).
3.1.4 Materials delivery to patient (a.3)
In the K frame of Figure 2, the administrations dependent
by the prescriptions placed are evaluated in terms of dose
availability at the administration time tap and possibly
activate the (b) process.
The possibility of managing urgent deliveries caused by
unavailability of administration materials is also
presented. Delivery urgency means lead time (TTm or LTf)
compression and, consequently, higher delivery costs, not
excluding being behind schedule. However, deliveries
may be easily evaluated by the physician before being
activated. Indeed, a time can be given to the physician to
confirm the feasibility of the administration behind the
schedule on the basis of the delivery scheduled time.
In the M frame of Figure 2, the cancellation of a
prescription or the discharge of an inpatient, are
transmitted to process (b).
While Figure 2 deals with drug administration to a
hospitalized patient, four events can imply materials
delivery to patients:
a.3.1) Preparation, administration or implant (inside
dispense),
a.3.2) Dispense to patient (outside dispense),
a.3.3) Examination accomplishment,
a.3.4) Low cost and genericgoods usage.
Preparation, administration or implant (a.3.1)
This refers to the delivery of materials inside the hospital
at the tap occurrence, depending on a prescription and
carried out by a nurse.
Many hospitals do not have an information tool or do not
have an information system at all, so nurses are in charge
of transcribing prescriptions on provided diaries,
checking them to know when to administer. This implies
risk of errors in transcription and administration
execution (right time, person, etc.).
Preparation is the phase in which nurses take drugs from
the stock and prepare them to be administered to
patients.
Galenics are a special case because the preparation,
depending on the organization, may involve pharmacists
and requires an appropriate recording of all actions and
items used (information about drug ID, lot number,
quantity used, etc.) for traceability reasons. For example,
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
5
www.intechopen.com
while an int
0.9% sodium
patient’s bed
dedicated m
with patient
clinical risk w
suggestions
specific patie
considered as
All the medi
an already-f
drawers cont
other drawer
described in
as syringes,
added to the
Updated in
previous che
each patient
Together wit
Figure 2 prov
of a drug m
date control
closest expira
Administrati
bed and carr
right drug, r
right inform
medication a
according to
objectives. D
with the reco
used from
warehouse m
In case of su
apparatus ha
these materia
drug adminis
and inventor
Dispense to pa
In some hea
can also be
care (by outp
These materi
inpatients, bu
than a time b
The outside
unit dispens
material is t
given to the p
travenous inj
m chloride so
d, oncological
medical unit an
and galenic
while ensuring
[12], the ass
ent is a “dispen
s the instant in
ications are u
filled trolley
taining the m
rs for specific
[21]). Moreov
gloves, rolle
trolley.
nventory info
ecks should b
t has his ow
th the quanti
vides an admi
made available
has to be m
ation date sho
ion follows. T
ries out the 7
right dose, rig
mation and do
and records a
o traceability
Dispense (if do
ording of the
medical uni
management sy
urgical interve
ave to be use
als has to be r
stered, in orde
ry managemen
atient (a.3.2)
althcare organ
charged with
patient depart
ials almost ov
ut instead of
bucket is fixed
dispense pro
se, because
taken from th
patient.
jection of cor
olution can b
galenics are u
nd later trans
ID is the rig
g traceability.
signment of
nse”; a galeni
n which labell
usually collecte
is used, wi
most frequently
patients’ need
ver, some med
er bandages,
ormation is
be done in ord
wn medication
ity availability
inistration fea
e only after th
made and the
ould be taken.
The nurse goe
7 “rights” che
ght route, rig
ocumentation)
all the conne
y and medica
one) or admin
consumption
it virtual sto
ystem is alway
ention, medic
ed. After it, i
recorded as in
er to satisfy cl
nt requiremen
nizations, the
h materials d
tments or dis
verlapping w
tap, a dispens
by the physici
cess can be li
the prescrip
he warehouse
rtisone dilute
be prepared
usually made
sported. Labe
ht way to red
According to
a medicine
cs dispense ca
ling occurs.
ed in a trolley
ith a numbe
y used drugs
ds (this is the
dical devices
etc., have to
crucial, bec
der to ensure
n available at
y (the L fram
asibility evalua
he tap), expira
package with
es to the pati
cks (right pat
ght time, with
), administers
ected informa
al risk reduc
nistration coin
n of the medic
ock, so that
ys up to date.
al devices, ki
information a
ndicated befor
linical, traceab
nts.
hospital pharm
ispense for h
charged patie
ith those used
sing period bi
ian.
ikened to med
ption is chec
, is recorded
ed in
at a
e in a
elling
duce
o IHE
to a
an be
y, or
er of
s and
case
such
o be
cause
that
t tap.
me of
ation
ation
h the
ient’s
tient,
h the
s the
ation,
ction
ncide
cines
the
its or
about
re for
bility
rmacy
home
ents).
d by
igger
dical
cked,
and
Exam
Diff
later
dire
exis
exam
Low
This
neit
care
poss
and
time
mos
on
belo
hosp
3.1.5
Mat
thei
for
proc
acco
attri
pres
pati
sche
pati
may
tech
of t
env
imp
Mat
mat
Figu
a fun
m accomplishm
ferently from th
r, the consum
ectly attributab
t). Inventory
mination is per
w cost and gener
s process conc
ther planned n
e. This distin
sible to record
d the requirem
e consuming
st accountabili
this function
onging to this
pitals (exampl
5 Traceability a
terials traceab
r consumptio
clinical reas
cesses should
ountability re
ibutions) but
scription, i.e.,
ient in the m
eduling reple
ient needs. M
y have an enor
hniques, but it
the lack of
ironment, t
plementing acc
terials requirem
terials consump
ure 3. Programm
nction of traceab
ment (a.3.3)
he low cost and
mption of som
ble to one pati
levels are u
rformed (back-
ric goods usage
cerns medical
nor directly a
nction is triv
d each activity
ments in term
without any
ity/informatio
. For this rea
process are c
les are gloves,
and requiremen
ility, from the
on by a patien
sons (all inf
be recorded
asons (to mo
t also for m
the step befor
most part of
enishments or
Materials requ
rmous impact
t has not reall
managerial c
ogether wit
curate and usa
ments program
ption traceabili
mability of hospi
bility of consum
genericgoods us
me medical de
ient (a bill of m
usually update
-flushing meth
(a.3.4)
l devices utili
attributable to
vial because
y performed fo
ms of materials
y practical ad
on systems do
ason, the me
considered ge
, elastic banda
nts programmab
eir admission t
nt, is extreme
formation ab
and availabl
onitor expend
managerial m
re materials d
f cases, can
r orders on
uirements pro
t on inventory
ly been devel
culture in th
th the di
able informati
mmability as
ity is illustrated
ital materials re
mption
sage explained
evices can be
materials may
ed when the
hod).
ization that is
one patient’s
it is always
or one patient
s; this can be
dvantage, and
not elaborate
edical devices
enericgoods for
ages).
bility
to hospital till
ely important
bout medical
e for checks),
diture and its
otivations. A
delivery to the
be used in
the basis of
ogrammability
y management
loped because
he healthcare
fficulties in
ion systems.
a function of
d in Figure 3.
equirements as
d
e
y
e
s
s
s
t
e
d
e
s
r
l
t
l
,
s
A
e
n
f
y
t
e
e
n
f
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 6
www.intechopen.com
In particular, events involving materials consumption are
ranked from the least traceable to the most (the
independent variable) as follows: low cost and genericgoods
usage (by definition untraceable), materials employed for
examinations (traceable if the information system
provides this feature), materials dispense (not traceable
when it comes to administration because it is performed
at the patient’s home) and materials
administration/implant (traceable until the end of the
process, because the usage of an identified material, with
its characteristics, expiration date, batch number, etc., can
be fully recorded). The other axis shows the materials
requirements programmability, which goes from the
possibility only to forecast the consumption of some
materials in a period of time, to the highest probability
that a particular consumption is going to take place in a
specific moment. The diagram shows activities
concerning patient care.
Given that “a plan must cover a period at least equal to
the time required to accomplish it” [22], the programming
interval ??
?
is fundamental data related to prescriptions
(when a batch consignment for each medical unit is
chosen, PI is the maximum number of time buckets
available for medical unit replenishments or supply
activities):
??
?
? ??
?
? ??
?
(1)
On the other hand, genericgoods usage is predictable with
low uncertainty, as, because of the big volumes, it is
easily forecasted by time series techniques. Almost the
same applies for examinations demand. Outpatient
dispense is in the middle of this plane because it concerns
a prescription kept by the pharmacy for a given period
while the ??
?
is not known.
3.2 Medical Unit Inventory Management process (b)
The second identified macro-process deals with the
materials management at the medical unit level.
The process starts when an administration is planned.
This passage is particularly important because, without
defining a provisioning politics, it is able to introduce the
real requirements data in the definition of an order,
allowing the medical unit (and hospital pharmacy, as a
consequence) to manage its stocks facing patient
requirements when they emerge.
The actors involved in this process are the nurse manager
and the pharmacist, and the two main activities are:
(b.1) Medical unit stock management and replenishment
(handling of incoming and wasted materials,
dispensing and keeping the warehouse
management system up-to-date, defining
replenishment requests),
(b.2) Pharmacy requirements assessment.
The first element to consider when modelling the (b)
process (and later (c) too) is the management policy
adopted. Basically, the two fields of intervention which
need to be globally optimized are medical unit
replenishments and pharmacy supplies. Look-back (for
example Re-Order Level, Re-Order Cycle, Just in Time),
look-ahead (for instance Material Requirements Planning)
or mixed (for example Vendor Managed Inventory)
approaches can be used.
As Nicholson et al. [6] claim, the most traditional
servicing approach in the pharmacy management field is
the periodic review par level (or order-up-to level), that
requires setting the review interval and the optimal
security stock (base stock level). While the second
depends on therapeutic and medical constraints set by
taking into account demand variability, the first has to be
defined according to the involved resources.
Some examples of re-ordination strategies are given by
Kalmeijer et al. [23], who promote the extensive use of
information systems to manage requirements considering
the default medication database as the local stock. Not-stock
items are automatically ordered from pharmacy, instead.
In general, the look-back approach is more popular than
the others, but brings higher inventory levels. Moreover,
forecasts on aggregate data about consumptions recorded
by pharmacy are influenced by medical unit management
techniques [6]. Look-ahead methods, instead, usually
need careful and punctual information about
requirements forecasts.
While the BPMN representation of this process is a subset
of the one shown for the process (c), the mathematical
formalization of the involved inventory management
procedures is as follows:
Our integrated approach to the HMM process, oriented to
the information management and traceability, allows the
adoption of Materials Requirement Planning (MRP)
techniques [22]. In particular, starting from the patient
prescriptions collected in sub-process (a), it is possible to
plan medical unit replenishment actions and supplier
order releases.
The following is first defined:
??
???
: safety stock quantity for drug f at the medical unit
m (expressed in units of dose)
??
?????
?
: quantity of the f drugstored in the warehouse of
the medical unit m at the beginning of the time
bucket ?
?
(expressed in units of dose)
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
7
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??
?????
?
: gross requirement, that is the total quantity of
drug f required during the ?
?
time bucket at the m
medical unit.
??
?????
?
: scheduled receipts, which give the quantity of
drug f (defined according to a chosen policy) that
is planned to be delivered to the medical unit m at
the beginning of the time bucket ?
?
??
?????
?
: availability, which is the quantity of drug f to be
retained for administrations at the medical unit m
at the beginning of the time bucket ?
?
??
?????
?
: net requirements, i.e., quantity of drug f required
and not available for administrations at the medical
unit m at the beginning of the time bucket ?
?
??
?????
?
? ? ?
? ? ?? ???
?
??? ??
?
??? ??
?
? ?
?
?
(2)
??
?????
?
? ??
?????
?
? ??
???
???
?????
?
(3)
??
?????
?
? ???? ?? ??
?????
?
? ??
?????
?
? (4)
The replenishment policy adopted depends, among other
things, on [24]:
• lot sizing policy (lot for lot, Economic Order
Quantity, Fixed Order Period, etc.),
• lead time offsetting (at least equal to ??
?
).
Consequently, the decision maker (usually the medical
unit nurse manager) can release an order to the hospital
pharmacy for the transportation quantity (???
?????
?
,
planned order releases for the medical unit m, the drug f
at the time bucket?
?
) to satisfy the requirements of the
medical unit m at the k
th
time bucket (where ? ? ?
?
???
?
),
dependent on the policy and at least equal to the net
requirement rounded to the nearest integer of Nf.
The aggregate information may be directly used by the
centralized inventory management process in order to
plan medical unit distributions and supplier orders,
freeing medical unit staff from managerial activities and
making more aggregated and powerful data available
about medical unit requirements and hospital pharmacy
availability over the time.
3.3 Centralized Inventory Management (c)
The centralized Inventory Management process (Figure 4)
is triggered by a medical unit requirement and can be
interpreted as substitutive with respect to the medical
unit inventory management, or in line with it, as already
explained in the previous section.
The involved sub-processes are:
(c.1) Pharmacy stock management, order disposition and
supplying activities,
(c.2) Internal distribution,
(c.3) Materials admission, quality control and payment.
3.2.1 Pharmacy stock management, order dispositions and
supplying activities (c.1)
Based on pharmacist order assessment, the stock
management and supplying activities take place.
Operationally speaking, the tasks carried out by pharmacy
unit actors are (N frame of Figure 4):
• incoming and expired materials handling,
• warehouse management system updating,
• budget reconciliation assessment (each cost
centre/medical unit typically has its own budget to
manage for each expenditure class; the same goes for
materials belonging to tenders, which have their
specification budget. Materials have to be transferred
according to these; otherwise, a budget integration
has to be requested from the Superintendence and
Treasurer’s office reporting quantities and the
amount of extra funding needed),
• stock levels control and authorization to dispense,
• supplying activities.
As with medical unit stock management, different
inventory management policies can be implemented in
order to take frequency/quantity supplying decisions.
This “Central of Purchasing” collects the orders and
forwards them to the suppliers, feed backing information
such as order acceptance or delivery due date to the
ordering point, with the exception of life-saving drug
stock-out, which is managed by urgent procedures.
Finally, the O frame of Figure 4 illustrates the design of
the urgent deliveries management process described in
the sub-process (a).
In terms of order releases, the same considerations and
formalization already expressed for the process (b) can be
repeated. In this case, the medical unit under examination
is the central pharmacy,with the exception of the Gross
requirement. This is given by:
??
?????
?
? ? ???
?????
?
????
(5)
with m=h occurring when the particular medical unit is
the central pharmacy.
This time, the results of the calculations are the array of
orders to suppliers, which are decided, again, according
to the policy chosen and the feasibility evaluation of
transportation to the medical unit (in this last case, some
urgent procedures may be needed in order to avoid
stock-outs).
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 8
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Figure 4.Centr
3.2.2 Internal
The interna
pharmacist’s
replenishmen
supply order
frame of F
preparation a
Inside hospi
role in hospi
multi-echelon
scheduling-o
the literature
optimized ro
developed, i
(both person
main variable
The order pr
of printing (
pharmacists
refilling me
bag/receptacl
be adopted, c
The second
carried out i
transporters (
medical unit’
Finally, mate
(c.3) are carr
Figure 4).
4. Expected p
The propose
(par. 4.1) and
ralized Inventor
distribution (c.
al distributio
authorizatio
nts, and is e
r (also transien
Figure 4, wh
and delivery t
ital pharmacy
ital service qu
n inventory
oriented ones
e, and differe
outing proble
n which tran
nnel and phys
es taken into a
reparation, per
also virtually
for a medica
thod is app
le with all ma
considering m
task, delivery
immediately
(these may b
’s nursing staf
erials admissio
ried out by ph
performances
ed HMM has
d economic con
ry Management
.2)
on process b
on triggered
eventually com
nt materials),
hich is com
to medical uni
y delivery sys
uality [25]. Th
problem
[7] has been o
ent transporta
ems (see, e.g.
nsportation co
sical resources
account.
rformed by sto
y) the materia
l unit (if the
plied), labellin
aterials listed.
materials’ expir
y to the med
or according
be pharmacy
ff).
on, quality con
harmacy pers
of HMM: case
been tested
nvenience (pa
Process frames
begins with
by medical
mpleted with
as shown in th
mposed of o
its.
stems have a
he diffusion of
as opposed
often dealt wi
ation solutions
, [21]) have b
osts and resou
s) are some o
orekeepers, con
ls list released
list exists and
ng and fillin
FIFO logic sh
ration date.
dical unit, can
to a schedul
personnel or
ntrol and paym
onnel (P fram
e studies
both for usab
ar. 4.2).
s (N, O, P and Q
the
unit
h the
he Q
order
key
f the
d to
th in
s for
been
urces
f the
nsists
d by
d no
ng a
hould
n be
le by
r the
ment
me of
bility
4.1 U
Firs
clini
exec
the
Biza
pha
200
Spe
•
•
The
help
cust
the
Ove
the
obta
imp
whe
imp
4.2 E
In t
prof
and
Q)
Usability
t of all, we
ical aspect of
cutable versio
underlying
agi©. We su
armacy person
beds and 16 s
cifically, the fo
Medical unit
o 2 physic
o 1 nurse m
o 1 nurse;
Hospital pha
o hospital
o 2 pharm
o 1 storeke
subjects feed
ped better cha
tomizations (t
type of availab
erall, we recor
model, as sho
ained by us
plementation)
en the prot
provements) p
Economic conve
this paragrap
fitability of th
d formalized in
test usability
the BPM. Dur
n, implement
database by
ubjected one
nnel of an Itali
pecialist medi
ollowing were
(cardiology) p
ians,
manager,
armacy person
pharmacy dir
acists,
eeper.
-backed impro
aracterize user
to be adapted
ble job positio
rded great sati
wn in Table 1
ers during
and the last
totype inclu
rototype expe
enience
ph we analys
he MRP techni
n equations 1 t
y and comple
ring the study
ting the user i
y means of
e medical u
ian acute care
ical areas to th
e involved:
personnel:
nnel:
rector,
ovements to t
r requirement
d to physical r
ons).
isfaction in th
1, which comp
the first (af
(at the end
uded all th
erimentation.
se the feasib
ique presented
to 5.
eteness in the
y we made an
interfaces and
the software
nit and the
hospital with
his prototype.
he modelling,
ts and realize
resources and
he adoption of
pares the score
fter the first
of the study,
he suggested
ility and the
d in par. 3.1.5
e
n
d
e
e
h
,
e
d
f
e
t
,
d
e
5
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
9
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USER EVALUATIONS First usage Last usage
(Score from 0 to 10,
8 users)
Mean
St.
dev.
Mean
St.
dev.
Usability (intuitive, easy, quick) 6.2 1.1 7.2 1.4
Completeness (able to provide all the
information needed, totally
substituting papers in the process)
8.3 0.8 9.1 0.5
Absence of redundancy (lacking of
redundant information)
6.1 2.1 9.2 0.4
Table 1. Performances comparison between the first and the last
usage by users of the HMM information system prototype
This step is particularly critical for hospital managers and
it is obviously not advisable to adopt it without previous
performance forecasts and analysis. The choice was to
design a simulation model able to represent the main
physical characteristics and boundaries of the system by
means of input variables, and collecting and
summarizing performances by measuring well-defined
output variables.
With this aim, we developed a detailed discrete event
simulation model (using Arena Rockwell©) able to
compare two scenarios:
1. the “AS IS” scenario, (the “traditional way to manage
hospital materials”), a periodic review par level
servicing approach, set on the basis of past
consumption, keeping distributed (among ward
warehouses) safety stocks to prevent stocks-out,
2. the “TO BE” scenario, which involves a delivery
scheduling based on patient requirements (MRP
technique).
The performance evaluations are carried out through an
inventory cost function (?) that takes into account the
overall cost sustained by a hospital in adopting an
inventory management policy; in particular:
? ? ? ? ?? ??
?
?????
?
??
?
?????
?
??
?
?????
?
??
?
?????
?
? ??
?
???
?
?
?
? ?
?
(6)
where
- ?
?
?????
?
:Ordering cost for each medical unit m, drug f
sustained at each time bucket ?
?
,
- ?
?
?????
?
urchasing cost for each medical unit m, drug
f sustained at each time bucket ?
?
,
- ?
?
?????
?
: Warehousing cost for each medical unit m,
drug f sustained at each time bucket ?
?
,
- ?
?
?????
?
: Shortage cost for each medical unit m, drug f
happened at each time bucket ?
?
,
- ?
?
???
?
: Distribution cost for each medical unit m
occurring at each time bucket ?
?
.
The simulation model has been validated and verified
using data from an Italian regional university acute
hospital with 700 beds and 26 specialist medical areas.
Drug daily demand distribution was extracted from the
hospital information system for the year 2012, a selection
was made of the most expensive (26.6% of the total
purchasing costs) items in the main medical units (3) by
means of the Pareto analysis, based on 55,000 medical
unit consumption records related to 900 items. The drug
demand distributions were used to rebuild the periodic
medical prescription placings of physicians.
The cost parameters belonging to the function were
calculated by performing an Activity Based Costing
analysis [26] on the data collected on the field, excluding
the actual resources’ saturation due to the particular
management policy adopted in the hospital.
INPUT: INVENTORY
MANAGEMENT PARAMETERS
AS IS
scenario
TO BE
scenario
Supplier Lead Time (LTf)
Constant,
1 day
Constant,
1 day
Replenishment Lead Time (TTm)
Constant,
1 hour
Constant,
1 hour
Prescription frequency (physician
rounds frequency)
1 day 1 day
Review period 3 days 1 day
Review par level yes no
Period of analysis (T) 90 days
Service level 98%
Average coefficient of variation of the
daily demand distributions of drugs
1.3*
* For more details, see Table 2
Table 2. Configurations of the input parameters for the two
scenarios
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 10
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Drug
( ) f
Aver
da
dem
µ (
[un
1
2
3
4
5
6
7
8
9
10
Table 3. Dema
medical unit 1
Figure 5. Inven
medical unit (
Figure 6. Inven
hospital pharm
OUTPUT: IN
FUCTION
Total value of
( ) C
% of overall in
Table 4. Comp
cost function
rage
aily
mand
µ)
its]
St. dev. o
daily
demand
? ( )
[units]
366.0 179
28.2 14
11.4 5
4.2
351.6 15
33.0 15
494.4 212
7.8 4
27.6 15
18.6 8
and distribution
( 1) m =
ntory build up d
1) m = in the tw
ntory build-up d
macy ( ) m = h in
NVENTORY CO
f the cost functio
nventory expen
parisons of the t
of
d
Coeff. of
variation
?
µ
? ?
? ?
? ?
9.5 0.7
4.1 0.8
5.7 1.0
1.8 3.0
1.8 1.8
5.7 0.9
2.0 1.7
4.7 1.1
5.6 0.5
8.5 1.1
n data for the fir
diagram of a dru
o scenarios.
diagram of a dr
the two scenari
OST AS IS
scenario
on
€ 200 731
nse 100%
two scenarios on
Num.
units/
pack.
(N
f
)
Price/
[€
2 €
1 € 1
1 € 64
1 € 59
1 € 9
1 € 7
1 € 7
1 € 2
10 €
10 € 6
st 10 drugs used
ug ( 1) f = in a
ug ( 1) f = in the
os.
o
TO BE
scenario
.00 € 180 476.
90%,
i.e., 10% co
saving
n the basis of th
/ unit
€]
2.67
16.60
41.18
94.56
90.95
79.73
70.58
21.98
8.11
68.96
d in a
e
o
.00
ost
he
The
posi
Tab
rela
a dr
Figu
by t
4 (o
The
anal
5. C
This
of t
tran
clini
pers
thro
othe
allo
man
man
foun
exha
allo
logi
pha
clini
sup
pati
Mor
(suc
exec
(in p
in th
the
the
step
mod
med
Fina
requ
an
man
pati
data
savi
The
man
sma
comparison
itive first resu
le 2 (input d
ted to drugs),
rug managed
ure 6 (invento
the hospital ph
utputs).
simulation s
lysis of the eff
Conclusions
s paper propo
the hospital
nslates this in
ical and ma
spective, it a
ough clinical
er things, tim
ws readiness
naging of
nagement po
ndations for
austive, robus
w (as an opt
istical activitie
armacy), allow
ical activities
ply tasks on th
ients.
reover, the con
ch as the BP
cutable and h
primis the simu
he literature [
expected org
HMM. This f
p to assess the
del by testing
dium-size hosp
ally, a clear
uirements for
MRP techniq
naging of all r
ient prescripti
a from a big
ing of 10% com
complexity a
nagement poli
all number of c
between th
ults (a saving o
data), Table 3
Figure 5 (inve
by a medical
ry build-up d
harmacy in th
study is ongo
fects of multip
oses an integr
materials ma
nto a Business
nagerial obje
llows the en
risk reductio
me-consuming
s in case of
drug expira
oint of view
optimizing
st and flexible
tion of the m
es by a central
wing medical s
and program
he basis of the
ncept behind b
MN used he
hence amenab
ulation, as the
[19]), being a
ganizational im
feature was ex
e usability an
g the informat
pital.
mathematica
the inventory
que, allows
requirements
ions. A simul
g university h
mpared to a “t
and variety of
icies make thi
case studies an
he two scena
of 10%) are su
3 (example o
entory build-u
unit in the tw
diagram of a d
he two scenari
oing in order
ple factors.
rated and det
anagement p
s Process Mo
ectives. From
nhancing of p
ons while lim
g tasks of al
f recall and
ation dates.
w, the mod
the HMM,
le basis of inf
model) the exe
lized function
staff to devote
mming replen
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Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
11
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Nevertheless, modelling the data sharing and the
integration and coordination among actors and activities,
the proposed HMM gives the guidelines for the design of
a common and distributed information platform that can
be also be used to collect data, identify key performance
indicators and compare them in different management
technique scenarios, carrying out wider performance
evaluations.
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doc_444540415.pdf
Materials management is an important issue for healthcare systems because it influences clinical and financial outcomes. Before selecting, adapting and implementing leading or optimized practices, a good understanding of processes and activities has to be developed.
International Journal of Engineering Business Management
Modelling Hospital Materials
Management Processes
Regular Paper
Raffaele Iannone
1
, Alfredo Lambiase
1
, Salvatore Miranda
1
,
Stefano Riemma
1
and Debora Sarno
1,*
1 Department of Industrial Engineering, University of Salerno, Via Ponte Don Melillo, Fisciano, Italy
* Corresponding author E-mail: [email protected]
Received 8 March 2013; Accepted 30 April 2013
DOI: 10.5772/56607
© 2013 Iannoneet al.; licensee InTech. This is an open access article distributed under the terms of the Creative
Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use,
distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract Materials management is an important issue for
healthcare systems because it influences clinical and
financial outcomes. Before selecting, adapting and
implementing leading or optimized practices, a good
understanding of processes and activities has to be
developed.
In real applications, the information flows and business
strategies involved are different from hospital to hospital,
depending on context, culture and available resources; it
is therefore difficult to find a comprehensive and
exhaustive description of processes, even more so a clear
formalization of them.
The objective of this paper is twofold. First, it proposes an
integrated and detailed analysis and description model
for hospital materials management data and tasks, which
is able to tackle information from patient requirements to
usage, from replenishment requests to supplying and
handling activities. The model takes account of medical
risk reduction, traceability and streamlined processes
perspectives. Second, the paper translates this
information into a business process model and
mathematical formalization.
The study provides a useful guide to the various relevant
technology-related, management and business issues,
laying the foundations of an efficient reengineering of the
supply chain to reduce healthcare costs and improve the
quality of care.
Keywords Hospital Materials Management, Business
Process Modelling, Healthcare Information System,
Drugs Inventory Management, Healthcare Logistics,
Computer Physician Order Entry
1. Introduction
Progressive reduction in public resources – and the
subsequent need to restore budgets – means
governments are responsible for finding solutions to
achieve more operational efficiency in hospital
processes. Drug expenditure, in particular, is a
relevant factor in the profit and loss accounts of
healthcare systems ([1, 2]); hospital pharmacy
management is called upon to adopt policies to reduce
drug inventory costs and maximize the cost-effective
use of personnel and resources [3-5].
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
1
www.intechopen.com
ARTICLE
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Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013
Awareness of logistics is becoming more widespread and
many initiatives and studies dealing with supply chain
integration have been undertaken (for example, supply
outsourcing strategies [6, 7]). However, the internal
supply chain (vs. external, i.e., beyond the boundaries of
an organization) “remains the sore spot or weak link” [8]
in process integration and optimization. This lack of
systemic approach to internal supply chain management
is reflected in huge costs in materials management and
low service quality delivered to patients [9].
Hospital materials management (HMM) also involves the
clinical sphere of healthcare service performance. Clinical
errors in drug prescription and administration, for
example, are always possible, depending on human
factors and procedural issues.
Regarding resource use optimization, the difficulties of
transferring manufacturing best practice directly to the
hospital environment are evident [10], although the first
sector of intervention is inventory management (see, for
example, [8]). It is conceivable to suppose that the main
cause of inefficiency is the existence of hidden stocks to
avoid stock-outs [10], which would be more politics- and
experience- rather than data-driven [6].
It is clear that a significant percentage of a pharmacist’s
time is consumed by order entry, verification,
clarification, and follow-up activities [11]; the same
applies for nurses with prescription transcriptions, stock
level control and administration.
In order to achieve a comprehensive image of the HMM
process and potential ways of exploiting IT to enable an
efficient reengineering of this supply chain, reducing
healthcare costs without affecting the quality of care [1], it is
fundamental to consider the previously presented logistical
and clinical perspectives as both sides of the same coin.
In the literature, there are many collateral references on
how materials management works; in real cases analysed,
information systems are usually built for fragmented
applications, and much information is lost or is not
recorded when it flows through processes. This implies
losses in traceability and increases in clinical risk, while
inventory management techniques and logistics are
hardly performed, causing high inventory costs.
The objective of this paper is twofold. First, on the basis
of a literature review, analysis of real cases and
international guidelines, the paper fills a research gap,
providing an integrated and detailed analysis and
description of hospital materials management data and
tasks (able to tackle information from patient
requirements to usage, from replenishment requests to
supplying and handling activities) in relation to medical
risk reduction, traceability and streamlined processes
perspectives. Secondly, the paper translates this
knowledge into a business process model and a
mathematical formalization, showing the integrated
information and physical flows in order to trace and
share data among actors with the aim of reducing clinical
risk and time-consuming tasks while enabling
requirement programmability and, more in general,
knowledge management.
The paper is structured as follows: after the materials
under examination are defined, the materials, processes
and actors are described in section 2. Details about
process modelling and formalization are given in section
3, and in section 4 the performance results of a case study
are presented. Finally, conclusions and suggestions for
possible further research are presented.
2. HMM elements: materials, processes and actors
The first step in the hospital pharmacy “micro-world”
reengineering process is to identify the behaviour of this
system, to establish for example what to manage in terms
of materials (par. 2.1), processes (par 2.2) and actors (par.
2.3), taking into account information and legal
constraints.
2.1 Materials and places
Management of materials in healthcare involves two
kinds of item clusters: drugs (or medicines) and medical
devices, subjected to different regulations harmonized by
countries according to international guidelines. The
properties of medicines in a hospital information system
may be mandatory or optional depending on the
contextual workflow [12]. A fundamental “identifier” is
the ATC (Anatomic – Therapeutic – Chemical)
classification, internationally accepted and maintained by
the World Health Organization. In addition to
commercial drugs, drug administrations can also refer to
galenics, such as personalized medicines prepared as a
“mixture” of commercialized products at the bedside, in
hospital pharmacy or in another defined medical unit. In
parallel, medical devices, such as surgical kit and
apparatus, can be managed as single or grouped items by
pharmacists. The item list (in other words, the set of
medicines or medical devices that can be
administered/dispensed to or implanted in patients in a
healthcare system) changes from hospital to hospital,
depending not only on the healthcare services managed,
but also on the physician’s expertise and preferences, and
following pharmaco-economics principles [13].
Regarding places of materials management and
dispensing, it is possible to distinguish between clinical
and managerial perspectives. From a clinical point of
view, the usefulness of having centralized patient-
oriented pharmacy services to deliver professional
services to the patient has been recognized [14, 15]. From
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 2
www.intechopen.com
a manageria
possibility o
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Modelling Hospital Materials Management Processes
3
www.intechopen.com
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The active substance(s), as stated above, is usually a key
element because it can permit evaluations about
pharmaco-economics and availability (for example, to
distribute the cheapest brand name stored in satellite or
central pharmacies or to prescribe what is stored in the
local warehouse), but the clinical consideration can imply
a more rigid selection.
In the case of surgical intervention, some materials have
to be explicitly prescribed (for example, an orthopaedic
prosthesis and its size or surgical kit).
Considering the data related to inventory management
activities, the output of this phase is one or a list of records of
prescriptions (p) for each patient, formalized as follows.
The time base unit of administration schedule and
evaluation of requirements is the time buckets (?
?
), with
? ? ??
?
? ?? ?
?
? ?? ?
?
? being a given observation time (T).
In particular, having defined:
? ? ?? drug with the attributes:
Nf: number of units contained in a package of f
LTf: supplier lead time, time between the ordering
and the delivery of a supply order
? ? ?, Medical Unit belonging to a hospital with the
attribute:
TTm: time needed to transport orders from the
pharmacy to the medical unit m.
The classical prescription record for a patient is composed of:
? ? ?, hospital prescription for a single drug f, with:
tsp: time bucket at which the physician states the
prescription p
tap: scheduled administration time bucket for the
prescription p
DRp: drug prescribed f, chosen from ?
Qp: administration quantity
MUp: medical unit where the patient is hospitalized
m, belonging to M.
3.1.2 Exams prescription (a.1.2)
The physician can prescribe some diagnostic
examinations to patients, such as laboratory exams (e.g.,
blood, RX) or other activities that require materials.
3.1.3 Pharmacy Prescription Validation (a.2)
After a prescription, prescription information may be made
available to pharmacists for a pharmacy validation. It can be
advisable but not mandatory, so that many organizations
tend to jump this step. This implies no double reviews and,
hence, no possibility of medical error reduction [13].
A detected problem can be a supply issue (suspended
medication, out-of-stock, etc.), a legal issue (medication
recalled or not allowed under certain conditions), or a
medical issue (redundancy, interaction, contra-indication,
ICA, etc.).
3.1.4 Materials delivery to patient (a.3)
In the K frame of Figure 2, the administrations dependent
by the prescriptions placed are evaluated in terms of dose
availability at the administration time tap and possibly
activate the (b) process.
The possibility of managing urgent deliveries caused by
unavailability of administration materials is also
presented. Delivery urgency means lead time (TTm or LTf)
compression and, consequently, higher delivery costs, not
excluding being behind schedule. However, deliveries
may be easily evaluated by the physician before being
activated. Indeed, a time can be given to the physician to
confirm the feasibility of the administration behind the
schedule on the basis of the delivery scheduled time.
In the M frame of Figure 2, the cancellation of a
prescription or the discharge of an inpatient, are
transmitted to process (b).
While Figure 2 deals with drug administration to a
hospitalized patient, four events can imply materials
delivery to patients:
a.3.1) Preparation, administration or implant (inside
dispense),
a.3.2) Dispense to patient (outside dispense),
a.3.3) Examination accomplishment,
a.3.4) Low cost and genericgoods usage.
Preparation, administration or implant (a.3.1)
This refers to the delivery of materials inside the hospital
at the tap occurrence, depending on a prescription and
carried out by a nurse.
Many hospitals do not have an information tool or do not
have an information system at all, so nurses are in charge
of transcribing prescriptions on provided diaries,
checking them to know when to administer. This implies
risk of errors in transcription and administration
execution (right time, person, etc.).
Preparation is the phase in which nurses take drugs from
the stock and prepare them to be administered to
patients.
Galenics are a special case because the preparation,
depending on the organization, may involve pharmacists
and requires an appropriate recording of all actions and
items used (information about drug ID, lot number,
quantity used, etc.) for traceability reasons. For example,
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
5
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while an int
0.9% sodium
patient’s bed
dedicated m
with patient
clinical risk w
suggestions
specific patie
considered as
All the medi
an already-f
drawers cont
other drawer
described in
as syringes,
added to the
Updated in
previous che
each patient
Together wit
Figure 2 prov
of a drug m
date control
closest expira
Administrati
bed and carr
right drug, r
right inform
medication a
according to
objectives. D
with the reco
used from
warehouse m
In case of su
apparatus ha
these materia
drug adminis
and inventor
Dispense to pa
In some hea
can also be
care (by outp
These materi
inpatients, bu
than a time b
The outside
unit dispens
material is t
given to the p
travenous inj
m chloride so
d, oncological
medical unit an
and galenic
while ensuring
[12], the ass
ent is a “dispen
s the instant in
ications are u
filled trolley
taining the m
rs for specific
[21]). Moreov
gloves, rolle
trolley.
nventory info
ecks should b
t has his ow
th the quanti
vides an admi
made available
has to be m
ation date sho
ion follows. T
ries out the 7
right dose, rig
mation and do
and records a
o traceability
Dispense (if do
ording of the
medical uni
management sy
urgical interve
ave to be use
als has to be r
stered, in orde
ry managemen
atient (a.3.2)
althcare organ
charged with
patient depart
ials almost ov
ut instead of
bucket is fixed
dispense pro
se, because
taken from th
patient.
jection of cor
olution can b
galenics are u
nd later trans
ID is the rig
g traceability.
signment of
nse”; a galeni
n which labell
usually collecte
is used, wi
most frequently
patients’ need
ver, some med
er bandages,
ormation is
be done in ord
wn medication
ity availability
inistration fea
e only after th
made and the
ould be taken.
The nurse goe
7 “rights” che
ght route, rig
ocumentation)
all the conne
y and medica
one) or admin
consumption
it virtual sto
ystem is alway
ention, medic
ed. After it, i
recorded as in
er to satisfy cl
nt requiremen
nizations, the
h materials d
tments or dis
verlapping w
tap, a dispens
by the physici
cess can be li
the prescrip
he warehouse
rtisone dilute
be prepared
usually made
sported. Labe
ht way to red
According to
a medicine
cs dispense ca
ling occurs.
ed in a trolley
ith a numbe
y used drugs
ds (this is the
dical devices
etc., have to
crucial, bec
der to ensure
n available at
y (the L fram
asibility evalua
he tap), expira
package with
es to the pati
cks (right pat
ght time, with
), administers
ected informa
al risk reduc
nistration coin
n of the medic
ock, so that
ys up to date.
al devices, ki
information a
ndicated befor
linical, traceab
nts.
hospital pharm
ispense for h
charged patie
ith those used
sing period bi
ian.
ikened to med
ption is chec
, is recorded
ed in
at a
e in a
elling
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y, or
er of
s and
case
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o be
cause
that
t tap.
me of
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ction
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the
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rmacy
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ents).
d by
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and
Exam
Diff
later
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exis
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Low
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poss
and
time
mos
on
belo
hosp
3.1.5
Mat
thei
for
proc
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pati
sche
pati
may
tech
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env
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Mat
mat
Figu
a fun
m accomplishm
ferently from th
r, the consum
ectly attributab
t). Inventory
mination is per
w cost and gener
s process conc
ther planned n
e. This distin
sible to record
d the requirem
e consuming
st accountabili
this function
onging to this
pitals (exampl
5 Traceability a
terials traceab
r consumptio
clinical reas
cesses should
ountability re
ibutions) but
scription, i.e.,
ient in the m
eduling reple
ient needs. M
y have an enor
hniques, but it
the lack of
ironment, t
plementing acc
terials requirem
terials consump
ure 3. Programm
nction of traceab
ment (a.3.3)
he low cost and
mption of som
ble to one pati
levels are u
rformed (back-
ric goods usage
cerns medical
nor directly a
nction is triv
d each activity
ments in term
without any
ity/informatio
. For this rea
process are c
les are gloves,
and requiremen
ility, from the
on by a patien
sons (all inf
be recorded
asons (to mo
t also for m
the step befor
most part of
enishments or
Materials requ
rmous impact
t has not reall
managerial c
ogether wit
curate and usa
ments program
ption traceabili
mability of hospi
bility of consum
genericgoods us
me medical de
ient (a bill of m
usually update
-flushing meth
(a.3.4)
l devices utili
attributable to
vial because
y performed fo
ms of materials
y practical ad
on systems do
ason, the me
considered ge
, elastic banda
nts programmab
eir admission t
nt, is extreme
formation ab
and availabl
onitor expend
managerial m
re materials d
f cases, can
r orders on
uirements pro
t on inventory
ly been devel
culture in th
th the di
able informati
mmability as
ity is illustrated
ital materials re
mption
sage explained
evices can be
materials may
ed when the
hod).
ization that is
one patient’s
it is always
or one patient
s; this can be
dvantage, and
not elaborate
edical devices
enericgoods for
ages).
bility
to hospital till
ely important
bout medical
e for checks),
diture and its
otivations. A
delivery to the
be used in
the basis of
ogrammability
y management
loped because
he healthcare
fficulties in
ion systems.
a function of
d in Figure 3.
equirements as
d
e
y
e
s
s
s
t
e
d
e
s
r
l
t
l
,
s
A
e
n
f
y
t
e
e
n
f
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 6
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In particular, events involving materials consumption are
ranked from the least traceable to the most (the
independent variable) as follows: low cost and genericgoods
usage (by definition untraceable), materials employed for
examinations (traceable if the information system
provides this feature), materials dispense (not traceable
when it comes to administration because it is performed
at the patient’s home) and materials
administration/implant (traceable until the end of the
process, because the usage of an identified material, with
its characteristics, expiration date, batch number, etc., can
be fully recorded). The other axis shows the materials
requirements programmability, which goes from the
possibility only to forecast the consumption of some
materials in a period of time, to the highest probability
that a particular consumption is going to take place in a
specific moment. The diagram shows activities
concerning patient care.
Given that “a plan must cover a period at least equal to
the time required to accomplish it” [22], the programming
interval ??
?
is fundamental data related to prescriptions
(when a batch consignment for each medical unit is
chosen, PI is the maximum number of time buckets
available for medical unit replenishments or supply
activities):
??
?
? ??
?
? ??
?
(1)
On the other hand, genericgoods usage is predictable with
low uncertainty, as, because of the big volumes, it is
easily forecasted by time series techniques. Almost the
same applies for examinations demand. Outpatient
dispense is in the middle of this plane because it concerns
a prescription kept by the pharmacy for a given period
while the ??
?
is not known.
3.2 Medical Unit Inventory Management process (b)
The second identified macro-process deals with the
materials management at the medical unit level.
The process starts when an administration is planned.
This passage is particularly important because, without
defining a provisioning politics, it is able to introduce the
real requirements data in the definition of an order,
allowing the medical unit (and hospital pharmacy, as a
consequence) to manage its stocks facing patient
requirements when they emerge.
The actors involved in this process are the nurse manager
and the pharmacist, and the two main activities are:
(b.1) Medical unit stock management and replenishment
(handling of incoming and wasted materials,
dispensing and keeping the warehouse
management system up-to-date, defining
replenishment requests),
(b.2) Pharmacy requirements assessment.
The first element to consider when modelling the (b)
process (and later (c) too) is the management policy
adopted. Basically, the two fields of intervention which
need to be globally optimized are medical unit
replenishments and pharmacy supplies. Look-back (for
example Re-Order Level, Re-Order Cycle, Just in Time),
look-ahead (for instance Material Requirements Planning)
or mixed (for example Vendor Managed Inventory)
approaches can be used.
As Nicholson et al. [6] claim, the most traditional
servicing approach in the pharmacy management field is
the periodic review par level (or order-up-to level), that
requires setting the review interval and the optimal
security stock (base stock level). While the second
depends on therapeutic and medical constraints set by
taking into account demand variability, the first has to be
defined according to the involved resources.
Some examples of re-ordination strategies are given by
Kalmeijer et al. [23], who promote the extensive use of
information systems to manage requirements considering
the default medication database as the local stock. Not-stock
items are automatically ordered from pharmacy, instead.
In general, the look-back approach is more popular than
the others, but brings higher inventory levels. Moreover,
forecasts on aggregate data about consumptions recorded
by pharmacy are influenced by medical unit management
techniques [6]. Look-ahead methods, instead, usually
need careful and punctual information about
requirements forecasts.
While the BPMN representation of this process is a subset
of the one shown for the process (c), the mathematical
formalization of the involved inventory management
procedures is as follows:
Our integrated approach to the HMM process, oriented to
the information management and traceability, allows the
adoption of Materials Requirement Planning (MRP)
techniques [22]. In particular, starting from the patient
prescriptions collected in sub-process (a), it is possible to
plan medical unit replenishment actions and supplier
order releases.
The following is first defined:
??
???
: safety stock quantity for drug f at the medical unit
m (expressed in units of dose)
??
?????
?
: quantity of the f drugstored in the warehouse of
the medical unit m at the beginning of the time
bucket ?
?
(expressed in units of dose)
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
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??
?????
?
: gross requirement, that is the total quantity of
drug f required during the ?
?
time bucket at the m
medical unit.
??
?????
?
: scheduled receipts, which give the quantity of
drug f (defined according to a chosen policy) that
is planned to be delivered to the medical unit m at
the beginning of the time bucket ?
?
??
?????
?
: availability, which is the quantity of drug f to be
retained for administrations at the medical unit m
at the beginning of the time bucket ?
?
??
?????
?
: net requirements, i.e., quantity of drug f required
and not available for administrations at the medical
unit m at the beginning of the time bucket ?
?
??
?????
?
? ? ?
? ? ?? ???
?
??? ??
?
??? ??
?
? ?
?
?
(2)
??
?????
?
? ??
?????
?
? ??
???
???
?????
?
(3)
??
?????
?
? ???? ?? ??
?????
?
? ??
?????
?
? (4)
The replenishment policy adopted depends, among other
things, on [24]:
• lot sizing policy (lot for lot, Economic Order
Quantity, Fixed Order Period, etc.),
• lead time offsetting (at least equal to ??
?
).
Consequently, the decision maker (usually the medical
unit nurse manager) can release an order to the hospital
pharmacy for the transportation quantity (???
?????
?
,
planned order releases for the medical unit m, the drug f
at the time bucket?
?
) to satisfy the requirements of the
medical unit m at the k
th
time bucket (where ? ? ?
?
???
?
),
dependent on the policy and at least equal to the net
requirement rounded to the nearest integer of Nf.
The aggregate information may be directly used by the
centralized inventory management process in order to
plan medical unit distributions and supplier orders,
freeing medical unit staff from managerial activities and
making more aggregated and powerful data available
about medical unit requirements and hospital pharmacy
availability over the time.
3.3 Centralized Inventory Management (c)
The centralized Inventory Management process (Figure 4)
is triggered by a medical unit requirement and can be
interpreted as substitutive with respect to the medical
unit inventory management, or in line with it, as already
explained in the previous section.
The involved sub-processes are:
(c.1) Pharmacy stock management, order disposition and
supplying activities,
(c.2) Internal distribution,
(c.3) Materials admission, quality control and payment.
3.2.1 Pharmacy stock management, order dispositions and
supplying activities (c.1)
Based on pharmacist order assessment, the stock
management and supplying activities take place.
Operationally speaking, the tasks carried out by pharmacy
unit actors are (N frame of Figure 4):
• incoming and expired materials handling,
• warehouse management system updating,
• budget reconciliation assessment (each cost
centre/medical unit typically has its own budget to
manage for each expenditure class; the same goes for
materials belonging to tenders, which have their
specification budget. Materials have to be transferred
according to these; otherwise, a budget integration
has to be requested from the Superintendence and
Treasurer’s office reporting quantities and the
amount of extra funding needed),
• stock levels control and authorization to dispense,
• supplying activities.
As with medical unit stock management, different
inventory management policies can be implemented in
order to take frequency/quantity supplying decisions.
This “Central of Purchasing” collects the orders and
forwards them to the suppliers, feed backing information
such as order acceptance or delivery due date to the
ordering point, with the exception of life-saving drug
stock-out, which is managed by urgent procedures.
Finally, the O frame of Figure 4 illustrates the design of
the urgent deliveries management process described in
the sub-process (a).
In terms of order releases, the same considerations and
formalization already expressed for the process (b) can be
repeated. In this case, the medical unit under examination
is the central pharmacy,with the exception of the Gross
requirement. This is given by:
??
?????
?
? ? ???
?????
?
????
(5)
with m=h occurring when the particular medical unit is
the central pharmacy.
This time, the results of the calculations are the array of
orders to suppliers, which are decided, again, according
to the policy chosen and the feasibility evaluation of
transportation to the medical unit (in this last case, some
urgent procedures may be needed in order to avoid
stock-outs).
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 8
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Figure 4.Centr
3.2.2 Internal
The interna
pharmacist’s
replenishmen
supply order
frame of F
preparation a
Inside hospi
role in hospi
multi-echelon
scheduling-o
the literature
optimized ro
developed, i
(both person
main variable
The order pr
of printing (
pharmacists
refilling me
bag/receptacl
be adopted, c
The second
carried out i
transporters (
medical unit’
Finally, mate
(c.3) are carr
Figure 4).
4. Expected p
The propose
(par. 4.1) and
ralized Inventor
distribution (c.
al distributio
authorizatio
nts, and is e
r (also transien
Figure 4, wh
and delivery t
ital pharmacy
ital service qu
n inventory
oriented ones
e, and differe
outing proble
n which tran
nnel and phys
es taken into a
reparation, per
also virtually
for a medica
thod is app
le with all ma
considering m
task, delivery
immediately
(these may b
’s nursing staf
erials admissio
ried out by ph
performances
ed HMM has
d economic con
ry Management
.2)
on process b
on triggered
eventually com
nt materials),
hich is com
to medical uni
y delivery sys
uality [25]. Th
problem
[7] has been o
ent transporta
ems (see, e.g.
nsportation co
sical resources
account.
rformed by sto
y) the materia
l unit (if the
plied), labellin
aterials listed.
materials’ expir
y to the med
or according
be pharmacy
ff).
on, quality con
harmacy pers
of HMM: case
been tested
nvenience (pa
Process frames
begins with
by medical
mpleted with
as shown in th
mposed of o
its.
stems have a
he diffusion of
as opposed
often dealt wi
ation solutions
, [21]) have b
osts and resou
s) are some o
orekeepers, con
ls list released
list exists and
ng and fillin
FIFO logic sh
ration date.
dical unit, can
to a schedul
personnel or
ntrol and paym
onnel (P fram
e studies
both for usab
ar. 4.2).
s (N, O, P and Q
the
unit
h the
he Q
order
key
f the
d to
th in
s for
been
urces
f the
nsists
d by
d no
ng a
hould
n be
le by
r the
ment
me of
bility
4.1 U
Firs
clini
exec
the
Biza
pha
200
Spe
•
•
The
help
cust
the
Ove
the
obta
imp
whe
imp
4.2 E
In t
prof
and
Q)
Usability
t of all, we
ical aspect of
cutable versio
underlying
agi©. We su
armacy person
beds and 16 s
cifically, the fo
Medical unit
o 2 physic
o 1 nurse m
o 1 nurse;
Hospital pha
o hospital
o 2 pharm
o 1 storeke
subjects feed
ped better cha
tomizations (t
type of availab
erall, we recor
model, as sho
ained by us
plementation)
en the prot
provements) p
Economic conve
this paragrap
fitability of th
d formalized in
test usability
the BPM. Dur
n, implement
database by
ubjected one
nnel of an Itali
pecialist medi
ollowing were
(cardiology) p
ians,
manager,
armacy person
pharmacy dir
acists,
eeper.
-backed impro
aracterize user
to be adapted
ble job positio
rded great sati
wn in Table 1
ers during
and the last
totype inclu
rototype expe
enience
ph we analys
he MRP techni
n equations 1 t
y and comple
ring the study
ting the user i
y means of
e medical u
ian acute care
ical areas to th
e involved:
personnel:
nnel:
rector,
ovements to t
r requirement
d to physical r
ons).
isfaction in th
1, which comp
the first (af
(at the end
uded all th
erimentation.
se the feasib
ique presented
to 5.
eteness in the
y we made an
interfaces and
the software
nit and the
hospital with
his prototype.
he modelling,
ts and realize
resources and
he adoption of
pares the score
fter the first
of the study,
he suggested
ility and the
d in par. 3.1.5
e
n
d
e
e
h
,
e
d
f
e
t
,
d
e
5
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
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USER EVALUATIONS First usage Last usage
(Score from 0 to 10,
8 users)
Mean
St.
dev.
Mean
St.
dev.
Usability (intuitive, easy, quick) 6.2 1.1 7.2 1.4
Completeness (able to provide all the
information needed, totally
substituting papers in the process)
8.3 0.8 9.1 0.5
Absence of redundancy (lacking of
redundant information)
6.1 2.1 9.2 0.4
Table 1. Performances comparison between the first and the last
usage by users of the HMM information system prototype
This step is particularly critical for hospital managers and
it is obviously not advisable to adopt it without previous
performance forecasts and analysis. The choice was to
design a simulation model able to represent the main
physical characteristics and boundaries of the system by
means of input variables, and collecting and
summarizing performances by measuring well-defined
output variables.
With this aim, we developed a detailed discrete event
simulation model (using Arena Rockwell©) able to
compare two scenarios:
1. the “AS IS” scenario, (the “traditional way to manage
hospital materials”), a periodic review par level
servicing approach, set on the basis of past
consumption, keeping distributed (among ward
warehouses) safety stocks to prevent stocks-out,
2. the “TO BE” scenario, which involves a delivery
scheduling based on patient requirements (MRP
technique).
The performance evaluations are carried out through an
inventory cost function (?) that takes into account the
overall cost sustained by a hospital in adopting an
inventory management policy; in particular:
? ? ? ? ?? ??
?
?????
?
??
?
?????
?
??
?
?????
?
??
?
?????
?
? ??
?
???
?
?
?
? ?
?
(6)
where
- ?
?
?????
?
:Ordering cost for each medical unit m, drug f
sustained at each time bucket ?
?
,
- ?
?
?????
?
urchasing cost for each medical unit m, drugf sustained at each time bucket ?
?
,
- ?
?
?????
?
: Warehousing cost for each medical unit m,
drug f sustained at each time bucket ?
?
,
- ?
?
?????
?
: Shortage cost for each medical unit m, drug f
happened at each time bucket ?
?
,
- ?
?
???
?
: Distribution cost for each medical unit m
occurring at each time bucket ?
?
.
The simulation model has been validated and verified
using data from an Italian regional university acute
hospital with 700 beds and 26 specialist medical areas.
Drug daily demand distribution was extracted from the
hospital information system for the year 2012, a selection
was made of the most expensive (26.6% of the total
purchasing costs) items in the main medical units (3) by
means of the Pareto analysis, based on 55,000 medical
unit consumption records related to 900 items. The drug
demand distributions were used to rebuild the periodic
medical prescription placings of physicians.
The cost parameters belonging to the function were
calculated by performing an Activity Based Costing
analysis [26] on the data collected on the field, excluding
the actual resources’ saturation due to the particular
management policy adopted in the hospital.
INPUT: INVENTORY
MANAGEMENT PARAMETERS
AS IS
scenario
TO BE
scenario
Supplier Lead Time (LTf)
Constant,
1 day
Constant,
1 day
Replenishment Lead Time (TTm)
Constant,
1 hour
Constant,
1 hour
Prescription frequency (physician
rounds frequency)
1 day 1 day
Review period 3 days 1 day
Review par level yes no
Period of analysis (T) 90 days
Service level 98%
Average coefficient of variation of the
daily demand distributions of drugs
1.3*
* For more details, see Table 2
Table 2. Configurations of the input parameters for the two
scenarios
Int. j. eng. bus. manag., 2013, Vol. 5, 15:2013 10
www.intechopen.com
Drug
( ) f
Aver
da
dem
µ (
[un
1
2
3
4
5
6
7
8
9
10
Table 3. Dema
medical unit 1
Figure 5. Inven
medical unit (
Figure 6. Inven
hospital pharm
OUTPUT: IN
FUCTION
Total value of
( ) C
% of overall in
Table 4. Comp
cost function
rage
aily
mand
µ)
its]
St. dev. o
daily
demand
? ( )
[units]
366.0 179
28.2 14
11.4 5
4.2
351.6 15
33.0 15
494.4 212
7.8 4
27.6 15
18.6 8
and distribution
( 1) m =
ntory build up d
1) m = in the tw
ntory build-up d
macy ( ) m = h in
NVENTORY CO
f the cost functio
nventory expen
parisons of the t
of
d
Coeff. of
variation
?
µ
? ?
? ?
? ?
9.5 0.7
4.1 0.8
5.7 1.0
1.8 3.0
1.8 1.8
5.7 0.9
2.0 1.7
4.7 1.1
5.6 0.5
8.5 1.1
n data for the fir
diagram of a dru
o scenarios.
diagram of a dr
the two scenari
OST AS IS
scenario
on
€ 200 731
nse 100%
two scenarios on
Num.
units/
pack.
(N
f
)
Price/
[€
2 €
1 € 1
1 € 64
1 € 59
1 € 9
1 € 7
1 € 7
1 € 2
10 €
10 € 6
st 10 drugs used
ug ( 1) f = in a
ug ( 1) f = in the
os.
o
TO BE
scenario
.00 € 180 476.
90%,
i.e., 10% co
saving
n the basis of th
/ unit
€]
2.67
16.60
41.18
94.56
90.95
79.73
70.58
21.98
8.11
68.96
d in a
e
o
.00
ost
he
The
posi
Tab
rela
a dr
Figu
by t
4 (o
The
anal
5. C
This
of t
tran
clini
pers
thro
othe
allo
man
man
foun
exha
allo
logi
pha
clini
sup
pati
Mor
(suc
exec
(in p
in th
the
the
step
mod
med
Fina
requ
an
man
pati
data
savi
The
man
sma
comparison
itive first resu
le 2 (input d
ted to drugs),
rug managed
ure 6 (invento
the hospital ph
utputs).
simulation s
lysis of the eff
Conclusions
s paper propo
the hospital
nslates this in
ical and ma
spective, it a
ough clinical
er things, tim
ws readiness
naging of
nagement po
ndations for
austive, robus
w (as an opt
istical activitie
armacy), allow
ical activities
ply tasks on th
ients.
reover, the con
ch as the BP
cutable and h
primis the simu
he literature [
expected org
HMM. This f
p to assess the
del by testing
dium-size hosp
ally, a clear
uirements for
MRP techniq
naging of all r
ient prescripti
a from a big
ing of 10% com
complexity a
nagement poli
all number of c
between th
ults (a saving o
data), Table 3
Figure 5 (inve
by a medical
ry build-up d
harmacy in th
study is ongo
fects of multip
oses an integr
materials ma
nto a Business
nagerial obje
llows the en
risk reductio
me-consuming
s in case of
drug expira
oint of view
optimizing
st and flexible
tion of the m
es by a central
wing medical s
and program
he basis of the
ncept behind b
MN used he
hence amenab
ulation, as the
[19]), being a
ganizational im
feature was ex
e usability an
g the informat
pital.
mathematica
the inventory
que, allows
requirements
ions. A simul
g university h
mpared to a “t
and variety of
icies make thi
case studies an
he two scena
of 10%) are su
3 (example o
entory build-u
unit in the tw
diagram of a d
he two scenari
oing in order
ple factors.
rated and det
anagement p
s Process Mo
ectives. From
nhancing of p
ons while lim
g tasks of al
f recall and
ation dates.
w, the mod
the HMM,
le basis of inf
model) the exe
lized function
staff to devote
mming replen
e materials req
business proc
ere) is to ma
ble to quantita
e most frequen
useful metho
mpact on per
xploited in th
nd the comple
tion system p
al formalizat
y management
the easy an
for materials
lation is carrie
hospital), sho
traditional” po
the hospital p
is study limit
nalysed.
arios and its
ummarized in
of input data
up diagram of
wo scenarios),
drug managed
ios) and Table
r to complete
ailed analysis
processes and
odel, merging
m the clinical
patient safety
miting, among
ll actors; this
the efficient
From the
del lays the
because an
formation can
ecution of all
n (the hospital
e their time to
nishment and
quirements of
ess languages
ake a process
ative analysis
ntly proposed
od to evaluate
rformances of
he first testing
eteness of the
prototype in a
ion of main
t, according to
nd innovative
coming from
ed out (using
owing a cost
olicy.
processes and
ed due to the
s
n
a
f
,
d
e
e
s
d
g
l
y
g
s
t
e
e
n
n
l
l
o
d
f
s
s
s
d
e
f
g
e
a
n
o
e
m
g
t
d
e
Raffaele Iannone, Alfredo Lambiase, Salvatore Miranda, Stefano Riemma and Debora Sarno:
Modelling Hospital Materials Management Processes
11
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Nevertheless, modelling the data sharing and the
integration and coordination among actors and activities,
the proposed HMM gives the guidelines for the design of
a common and distributed information platform that can
be also be used to collect data, identify key performance
indicators and compare them in different management
technique scenarios, carrying out wider performance
evaluations.
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