Paving the Way for Warehouse Centralization in Healthcare: A Preliminary Assessment Approach

Centralized logistics management is currently one interesting option for healthcare systems facing an increasing need to improve responsiveness and service quality while reducing costs.  This work focuses on one aspect of centralized logistics, namely warehouse centralization and proposes a preliminary approach to assess material management in healthcare institutions as a first step towards decisions about the implementation of such a strategy. A list of variables and relationships between them characterizing warehouse material management are identified based on a literature review and knowledge of real logistics processes. Statistical analysis is then applied to assess the existence of such relationships in a set of healthcare organizations in order to understand the management commonalities that can stimulate warehouse centralization as well as the criticalities that could potentially hinder it. The approach is tested in a healthcare logistics system in Northern Italy. The results proved the ability of the methodology to identify the relevant issues the involved institutions need to work on when undertaking warehouse centralization strategies. The case warehouses revealed a good degree of commonalities in their management practices although three critical aspects were identified, namely a limited efficiency in human resource allocation, a high fragmentation of stock product demand and a relevant number of stock products with low annual demand. This work provides a methodology to increase material managers’ awareness about the factors enabling successful centralized inventory strategies in the healthcare sector.