Purpose: This work aims at providing insights to optimise healthcare logistic of the drug
management, in order to deal with the healthcare expenditure cut. In this paper the effects of
different drug supply chain configurations, on the resulting average stock, service level and
Bullwhip effect, of the studied supply chain, is quantitatively assessed.
Design/methodology/approach: A case study of an Italian district has been studied, taking
into account three echelons: suppliers, central stock, and hospitals. A model of the various
supply chain configurations has been created with the use of the simulation. Specifically, 24
supply chain configurations have been examined, stemming from the combination of several
supply chain design parameters, namely: transshipment policies (Emergency Lateral
Transshipment or Total Inventory Equalization); re-order and inventory management policies
(Economic Order Quantity or Economic Order Interval); required service levels (90% or 95%);
the number of available vans (one or two). For each configuration, hospital average stock,
service level and a “Bullwhip effect” analysis are computed. To know which input variables are
statistically significant, a DoE (Design of Experiments) analysis has been executed. Findings: The output of this paper provides useful insights and suggestions to optimize the
healthcare logistic and drug supply chain. According to the developed DoE analysis, it can be
stated that the introduction of transshipment policies provides important improvement in terms
of service and stock levels. To reduce the Bullwhip effect, which results in a service level
decreasing, and in a managing stock costs increasing, it is worth to adopt an EOQ re-order
policy.
Practical implications: This research gives practical recommendations to the studied system,
in order to reduce costs and maintain a very satisfactory service level.
Originality/value: This paper fulfils an identified need to study which combination of
transshipment policies, re-order/inventory management policies and required service levels, can
be the best one to reduce costs and maintain a very satisfactory service level, in the specific
logistic system.Peer Reviewe