Hospital demand-driven drugs replenishment strategy

Logistics represents a large share of hospitals operating budgets. However, it only holds a supporting role in hospitals' primary task of providing care to patients. It has not been highly studied and holds significant potential for improvement. Hospitals are often organised by medical departments, which tend to act as silos with their storage and points of use. Hospital inventory management deals with a large variety of products, including numerous critical ones, with a highly uncertain demand inside a complex multi-echelon storage structure. Hospitals' purpose is to provide care to patients and, therefore, require a service-oriented inventory approach that differs from classic industry profit-based inventory management. Data-driven systems are widely spread in the industry, whereas practitioners often take inventory decisions without advanced analytical backgrounds in hospitals.

Operational data are becoming increasingly more available in the hospital and are raising the potential for industry inspired data-driven approaches in the hospital context. We work jointly with Rigshospitalet (Copenhagen, Denmark), using the data of the drugs they record to understand and model the hospital's drugs demand, to identify demand patterns and use it to build a demand-driven replenishment system inspired by state-of-the-art industry Collaborative Planning, Forecasting and Replenishment systems. The objective is to reduce on-hand inventory, cost, and waste while maintaining or improving service.