SUNConferences, Southern African Institute of Industrial Engineering 2013

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Hospital Supply Chain Management and Optimisation
Muhammed Kachwee, Dieter Hartmann

Last modified: 2013-06-17


This project was directed at seeking solutions to the constraints imposed on the pharmaceutical supply chain of one of the largest and busiest state-owned hospitals in Africa. The aim of this project was to propose a new sourcing strategy, which included optimising stock holding, waste-reduction, possible stock-out elimination, and providing an improved supply chain management philosophy.

The inventory management processes currently in operation at the hospital are fairly ineffective and inefficient. Stock outs are regular, annual inventory procurement costs average R 12 million, average monthly trade deficits accumulate to R 3 million of unaccounted stock, and almost R 700 000 of expired medication is disposed of annually.

The project involved the design of an inventory management system for the site, using Microsoft Excel’s Visual Basic for Applications.

Due to the lack of technologies at the storeroom and pharmacy, the programs had to be designed as stand-alone packages. Reports for holding stock, ordering quantities, patient summaries, and inventory flows had also been built into the programs. The formulation of such variables included advanced forecasting techniques, amongst other mathematical formulations.

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