Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

Evaluation of complex integrated care programmes: the approach in North West London

Background: Several local attempts to introduce integrated care in the English National Health Service have been tried, with limited success. The Northwest London Integrated Care Pilot attempts to improve the quality of care of the elderly and people with diabetes by providing a novel integration process across primary, secondary and social care organisations. It involves predictive risk modelling, care planning, multidisciplinary management of complex cases and an information technology tool to support information sharing. This paper sets out the evaluation approach adopted to measure its effect. Study design: We present a mixed methods evaluation methodology. It includes a quantitative approach measuring changes in service utilization, costs, clinical outcomes and quality of care using routine primary and secondary data sources. It also contains a qualitative component, involving observations, interviews and focus groups with patients and professionals, to understand participant experiences and to understand the pilot within the national policy context. Theory and discussion: This study considers the complexity of evaluating a large, multi-organisational intervention in a changing healthcare economy. We locate the evaluation within the theory of evaluation of complex interventions. We present the specific challenges faced by evaluating an intervention of this sort, and the responses made to mitigate against them. Conclusions: We hope this broad, dynamic and responsive evaluation will allow us to clarify the contribution of the pilot, and provide a potential model for evaluation of other similar interventions. Because of the priority given to the integrated agenda by governments internationally, the need to develop and improve strong evaluation methodologies remains strikingly important

Safer clinical systems : interim report, August 2010

Safer Clinical Systems is the Health Foundation’s new five year programme of work to test and demonstrate ways to improve healthcare systems and processes, to develop safer systems that improve patient safety. It builds on learning from the Safer Patients Initiative (SPI) and models of system improvement from both healthcare and other industries. Learning from the SPI highlighted the need to take a clinical systems approach to improving safety. SPI highlighted that many hospitals struggle to implement improvement in clinical areas due to inherent problems with support mechanisms. Clinical processes and systems, rather than individuals, are often the contributors to breakdown in patient safety. The Safer Clinical Systems programme aimed to measure the reliability of clinical processes, identify defects within those processes, and identify the systems that result in those defects. Methods to improve system reliability were then to be tested and re-developed in order to reduce the risk of harm being caused to patients. Such system-level awareness should lead to improvements in other patient care pathways. The relationship between system reliability and actual harm is challenging to identify and measure. Specific, well-defined, small-scale processes have been used in other programmes, and system reliability has been shown to have a direct causal relationship with harm (e.g. care bundle compliance in an intensive care unit can reduce the incidence of ventilator-associated pneumonia). However, it has become evident that harm can be caused by a variety of factors over time; when working in broader, more complex and dynamic systems, change in outcome can be difficult to attribute to specific improvements and difficulties are also associated with relating evidence to resulting harm. The overall aim of Phase 1 of the Safer Clinical Systems programme was to demonstrate proof-of-concept that using a systems-based approach could contribute to improved patient safety. In Phase 1, experienced NHS teams from four locations worked together with expert advisers to co-design the Safer Clinical Systems programme