Logistics Management in a Healthcare Context : Methodological development for describing and evaluating a healthcare organisation as a logistics system

Abstract: This thesis tests whether logistics knowledge, theories and principles can be used to provide potential patient flow efficiency improvements. By emphasizing an ideal logistics system by means of its main features and then using these to evaluate two different healthcare organisations, it is assumed that knowledge regarding patient flows can be obtained and potentials for improvement highlighted. Hence, this licentiate thesis presents a developed method intended for evaluating a healthcare organisation by means of a logistics system’s main features. The purpose rests on the assumption that effective management and real flow-efficient improvements can only be accomplished by viewing logistics as an integrated system.Demographics, increased costs, strong technical and medical developments, new kinds of customer requirements, stressed staff and preventable adverse events are some of the challenges the Swedish healthcare system is currently facing. In addition, there is a constant demand on healthcare to be more cost-effective while fulfilling demands as regards waiting times, quality and availability. Experience from structural changes in other industries gives reason to be positive about the potential for long-term productivity leaps in the healthcare sector. The challenge is to simultaneously find successful application of efficient production and flexible adaptation to changing patients’ demands and requirements. Taking advantage of the logistics expertise that already exists can be a way to meet these challenges. It can be assumed that logistics knowledge applied in healthcare can lead to lower costs, shorter waiting lists, better patient service, shorter treatment times and increased capacity. Nevertheless, flow-oriented design of healthcare delivery systems is novel and positions much currently isolated research on a conceptual level or within single wards (Wiger and Aronsson, 2012).The research is part of a three-year project, "Lean and agile – logistics driven improvement in health and social care”, funded by Vinnvård, a collaboration between the Department of Management and Engineering at Linköping University, Hässleholm Healthcare Organisation and the Medical Management Center at Karolinska Institutet in Stockholm. This thesis is partly a theoretical development of logistics models. This is done in order to create an ideal logistics system’s main features and description aspects to describe a system to be able to evaluate it using these features. The two cases are used to test the adequacy of the developed method and its associated models and to identify potential for improvement towards a more flow-oriented business. Four series of interview sessions were conducted with a total of 23 respondents and 18 interviews and over 500 Excel files were collected from the business system.It is suggested that a healthcare organisation can be evaluated by the developed logistics main features. These features, listed below, together provide a possibility to complement a healthcare organisation’s ability to meet patient requirements by flow-efficiency and demonstrate logistical operational excellence.A logistics system’s purpose is to meet customer requirements by cost-effective delivery service through flow orientation by prioritising the total performanceA logistics system has a flow-oriented structureA logistics system transforms orders into customer services in a flow-oriented processA logistics system can control the transformation of input (demand) to output (customer service) and thus the cost of resourcesA logistics system measures to capture the whole system’s logistics performance, including total logistics costs, lead times and customer serviceA logistics system has a strategy to meet demandA logistics system uses logistics measurements as feedback to regulate its behaviour to reduce differences between actual and desired performanceThe analysis of the two cases confirms the picture of an organisational design driven by medical specialties. This implies a possibility to change perspective to a more holistic view with the patient flow in focus. The fact that there are very few possibilities to control the transformation has partly to do with ownership of patient flows being less well-defined than clearly defined medical responsibilities within each specialty. It also has to do with the inability to distinguish between the uncertainty regarding unique patients on a low level of aggregation and at the higher level where there should be complete and explicit specifications of the end-product requirements and delivery requirements. The lack of demand strategies that support the total logistics performance ultimately leads to both clinics having to use a sacrificing work effort rather than working systematically to be able to meet the demand. At the case hospital, there is a lack of information aggregated from operational level about patient processes that is made available for strategic decision-making. Neither of the two cases measure on the basis of improving patient flow efficiency, especially not the total patient flow costs or the total logistics costs.The major contribution is the analysis based on the logistics system’s main features, which gives a more purposive understanding of what can be done to improve flow efficiency within a healthcare organisation to make healthcare organisations progress in their ability to be more flow-oriented. A further contribution is a more clearly defined field of healthcare logistics research and the stressed importance of the “new” research field of logistics management.