Improving activities and decreasing costs of logistics in hospitals: a comparison of U.S. and French hospitals

Abstract

This paper investigates logistic (or supply-chain management) differences between large hospitals in the U.S. and France. Given that logistics and supply-chain management have been considered important aspects in hospital management, this paper explores the possible reasons for differences among hospitals in the U.S. and France. The differences are drawn from variables, such as (1) the extent of responsibility given to the logistics department with respect to items, such as purchasing, physical supplying, receiving, inventory management, internal distribution to medical departments, and management information systems; (2) the manner of distribution of supplies (such as central warehouse vs. direct vendor distribution); (3) the amount or the volume of medicine distributed; (4) the degree of partnerships between the hospitals and their vendors and other hospitals; and (5) the past efforts of logistics departments in improving the supply-chain management and future plans for improving the logistic functions. The results provide evidence that U.S. hospitals have been able to reduce the supplies inventory level to a larger extent than their counterparts in France; the French hospitals, however, have a higher level of intention to do so. Both groups support current and future partnerships with other hospitals and suppliers of goods and services. The ability of logistic management to reduce costs associated with medical supplies signals that supplies inventory reduction is possible in even very critical industries (such as medicine). Consequently, the results of this study are relevant to the management of hospitals (and companies), which intend to improve their logistic functions and accounting information systems to decrease the costs associated with inventory. In this paper, we have advocated that Just-in-Time (JIT) philosophy to be applied to hospitals in inventory cost reduction. Contemporary management methods continue to emerge and the healthcare industry needs to continue incorporating these new developments in its operations so it can compete in a market that is more competitive than ever.