How to sustainably increase the performance of procurement and logistics of a hospital group?

hpo Practical Case

Authors: Raphaelle Dupont, Stefan Zirhan

How can the performance of procurement and logistics of a hospital group be sustainably increased?

hpo Practical Case Health Care

The main task of a hospital is the continuous and safe supply of patients with medical services. Purchasing and logistics as supporting functions provice a decisive contribution to this. In order to fulfill the mission reliably and efficiently, supply chain management along the entire value chain - from demand determination and procurement to patient care - must function smoothly and be well aligned with the core processes. The following case study shows how hpo significantly increased the performance of a procurement organization in a Swiss hospital. The close collaboration between purchasing, logistics, and the medical supply chain was of crucial importance.  

Implementation of high performance supply chain management in collaboration with the medical demand side.

Swiss hospitals operate in a challenging market environment. The high and still rising healthcare costs, the increasing sensitivity of the population to the quality and cost of treatment coupled with limited remuneration, a shortage of resources, and increased competitive pressure place high demands on the efficiency of service provision. Medical excellence and security of care must be reconciled with business management considerations.

Case study: Design and implementation of an efficient supply chain management in a Swiss hospital

Our case study is about a large central hospital group in the midlands. The purchasing organization has grown historically and is reaching the limits of its capabilities. The procurement processes are perceived by the users as complicated and user-unfriendly. The complexity in the procurement increases, on the one hand from the necessity and on the other hand from the life cycles of the products (fig. 1). COVID-19 has clearly shown the limits of performance. To unleash the necessary potential for future excellence, fundamental change is needed. In this context, security of supply, economic efficiency and quality must be reconciled.  

Challenges in procurement and logistics

Increased effectiveness and security of supply through end-to-end optimization of processes, organization and systems

The overall project goal was to increase the effectiveness and efficiency of purchasing in order to ensure the hospital's security of supply. The customer wanted the development and introduction of lean supply chain management (Fig. 2). Supply chain management comprises strategic and operational procurement as well as inbound, intrabound and outbound logistics. Processes, organization and systems were to be optimized and aligned with the hospital's core processes.

To achieve these goals, the following areas of action were addressed.

  1. Processes: Optimize and control
    • Align processes with SCM/corporate strategy and core processes

    • Design SCM as an integrated end-to-end process

    • Standardize and simplify processes

    • Separate strategic and operational purchasing functionally

    • Ensure compliance with the principles (governance)

  2. Employees: Strengthen competencies, improve collaboration
    • Define roles and responsibilities

    • Strengthen competencies through education and training
    • Assign process owners as contact persons and persons responsible for compliance and further development

    • Improve communication and understanding between stakeholders

    • Define requirement for IT

  3. Goods and supplier portfolio: Reduce complexity and expense, optimize capital commitment, secure supply

    • Define merchandise category strategy

    • Standardize and streamline merchandise categories; optimize merchandise portfolio
    • Optimize supplier and contract management

Control of the entire SCM process

Holistic approach and joint solution development

A holistic design approach made it possible to create an end-to-end supply chain management system from existing building blocks. In the process, the target image, change story, processes as well as roles and responsibilities were aligned with each other. The involvement of all relevant functions in the development of the solution - logistics experts, procurers, strategic purchasers as well as medical and other technical and infrastructural users - resulted in a high level of acceptance of the solution. Together, the target processes were modeled and tested and optimized based on specific business cases.  

More added value through optimized use of resources, high security of supply and improved quality

Today, supply chain management has a strong foundation with powerful, efficient and flexible processes, high supply security and quality, and attractive professional profiles, and is ready for future challenges:

  • The supply chain processes are consistent, lean, and simple and thus clear and understandable for employees and internal customers.
  • Standardization and end-to-end consideration lead to efficiency gains across procurement and logistics activities.
  • Collaboration within SCM and with demand providers has improved; frontline demand providers are relieved and can focus on patient care.
  • Purchasing's position vis-à-vis suppliers and internal stakeholders is strengthened.
  • SCM governance provides the hospital with an effective tool for maintaining efficiencies, collaborating at interfaces, and advancing SCM.

Sample SCM today

Your partner for strategy and enterprise design

Who is hpo?

hpo makes companies more successful and more innovative. The strategy consultancy for enterprise design boasts more than 25 years of experience in the creation of strategies and organisations spanning many different industries. The management consultants at hpo specialise in the meticulous development of strategies, processes, business models, innovation and culture, and in accompanying the transformation.

The hpo design approach enables companies to better cope with strategic and organisational challenges and to realise substantial competitive advantages. The basis of the industry-spanning design approach is an academically grounded methodology with which high performance organisations are shaped and which is continually further developed with the latest findings from research and practice.

The management consultants at hpo come from a commercial or technology background and stand out with their high level of analytical and emotional intelligence. They are passionate in their dedication to the client’s concerns and enjoy working in a team.

hpo – we design organisations

* Please fill in the fields
We use cookies to ensure the best possible service. By using our website, you consent to the use of cookies. Please consult our privacy policy if you want to know more about it.