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In the healthcare industry, day-to-day activities like wound care, surgery and diagnostic testing require access to a wide range of medical supplies. From a logistical perspective, this means that these supplies must always be available for hospitals to function effectively. However, in recent years, hospitals have had to prioritize allocating more space for patient beds and clinical areas at the expense of maintaining extensive inventories.
As a result, many hospitals are beginning to transition to just-in-time (JIT) fulfillment systems to optimize their supply chains, improve patient care and reduce operational costs. This strategy involves the delivery of medical supplies directly to the hospital or point of use on a near-daily basis, effectively minimizing the need for large storage areas. Ahead, we explore why JIT fulfillment might be something for your hospital to consider.
Hospitals, especially those in urban areas, often face significant space constraints. By adopting JIT fulfillment, hospitals can receive more frequent supply deliveries directly to their facilities. This minimizes the requirement for extensive storage and enables better utilization of available space. In some cases, supplies can be delivered straight to areas like nurses’ stations, eliminating the need for any internal storage.
Why it matters: The freed-up space can be used for additional beds or treatment rooms, directly improving the hospital’s ability to serve more patients.
Inventory holding costs can be a significant burden on hospitals. On average, hospitals in the U.S. spend over $25 billion annually on supplies. This accounts for up to one-third of healthcare expenditures. With a JIT model, hospitals only receive supplies as needed, drastically reducing the amount of inventory on hand and minimizing holding costs.
Why it matters: JIT fulfillment enables hospitals to manage their finances more efficiently. By tying up less capital in inventory, resources can be redirected toward enhancing patient care and other critical areas.
One of the major challenges hospitals face is the wastage of medical supplies due to expiration or misplacement. The healthcare sector loses up to $5 million annually on misplaced, aging, or expired supplies. JIT fulfillment systems, when combined with advanced technologies like RFID, enable hospitals to maintain accurate inventory levels and minimize such inventory losses.
Why it matters: Reducing waste leads to significant cost savings and ensures that medical supplies are always fresh and available when needed, directly impacting patient care.
The availability and timely delivery of essential medical supplies are crucial for patient outcomes and safety. Delays or errors in supply delivery can lead to severe consequences in emergency situations. JIT fulfillment helps ensure that medical supplies are always available where and when they’re needed, reducing the risk of disruptions in patient care.
Why it matters: With JIT fulfillment, hospitals can streamline their supply chain processes, allowing healthcare professionals to focus on what matters most – providing quality care to patients.
RELATED READ: Healthcare JIT Fulfillment, Explained
Automation is a key enabler of successful JIT fulfillment. Hospitals can leverage advanced automation technologies, such as Warehouse Execution Systems (WES) and Autonomous Mobile Robots (AMRs), to streamline the picking, packing and transportation of supplies. Automation enhances accuracy, reduces manual labor and minimizes human error.
Why it matters: By integrating automation with JIT fulfillment, hospitals can significantly increase operational efficiency, allowing them to handle more complex supply chains with ease while reducing labor costs.
JIT fulfillment offers hospitals the flexibility to scale their operations as needed. As hospitals grow, adaptability to changing supply demands becomes increasingly important. By leveraging JIT fulfillment, hospitals can adjust inventory levels according to patient needs and seasonal illnesses, without the worry of overstocking or running out of essential supplies.
Why it matters: Scalability ensures that hospitals can manage fluctuations in supply requirements effectively, thereby enhancing overall efficiency and patient care.
Sustainability is becoming an increasingly important aspect of healthcare operations. Hospitals generate over 4.7 million pounds of waste annually, equating to roughly 27 pounds per staffed bed per day. JIT fulfillment minimizes waste by reducing excess inventory and ensuring that supplies are only ordered as needed.
Why it matters: Adopting JIT fulfillment is not only financially beneficial but also environmentally responsible, aligning with the growing demand for sustainable practices in healthcare.
Hospitals are often plagued by a lack of visibility into their supply chain, leading to inefficient inventory management. JIT fulfillment, when combined with automation and RFID technology, provides real-time inventory visibility. This ensures hospitals have accurate inventory data, helping to maintain optimal stock levels and avoid unnecessary shortages or overstocking.
Why it matters: With enhanced visibility, hospitals can make informed decisions about their inventory, reducing the risk of supply disruptions and improving overall supply chain resilience.
Traditionally, nurses have been responsible for inventory management tasks, such as identifying received inventory and monitoring expiration dates. This not only diverts them from their primary roles but can also lead to inefficiencies and potential errors. Automated JIT fulfillment alleviates this burden by handling these tasks more effectively.
Why it matters: By freeing nurses from supply chain responsibilities, they can focus more on patient care, improving overall efficiency and care quality.
There are two primary models through which hospitals can implement JIT fulfillment:
Both models emphasize the importance of automation solutions in optimizing supply chain management, helping hospitals save on costs and improve patient care.
JIT fulfillment offers hospitals a comprehensive solution to many of the challenges they face in supply chain management. By implementing this approach, hospitals can:
If you’d like to find out more about JIT fulfillment, check out this ebook or book a demo today.