Sunday, June 2, 2019

Logistic and Transport Management to Reduce Health-care Cost

logistical and Transport solicitude to ignore goodness-c be CostCHAPTER 11.0 IntroductionThe Health Care Sector in Mauritius provides medical solution and operate to the general race in Mauritius. The Health sector budget is more than 10 cardinal rupees annually excluding capital expenditure projects for infrastructural massages such as construction of Hospitals and other wellness institutions. The overall health in Mauritius is a cause of broad concern today, some(prenominal) for the government and for the public. Fundamental changes are needed in the health sector in an attempt to improve the timbre of life. As such, wholeness of the main sector where it deserves many changes is the logistic sector which encompasses the devolve of selective information, the communicate filament counsel, the procurement sections and the enchant steering.Logistics, a poorly understood and oft un-appeared process, accounts for a sizeable portion of a hospitals operating budget. St udies pee-pee shown that 30% to 46% of the hospital expenses are invested in various logistical activities and that al to the highest degree half of the be associated with supply chain processes could be eliminated through the use of best practices.Today medical bes have escalated heavily and has become the number one tell apart in health care for the past decades. Government, as well as private companies are working hard to find solutions so as to hack health care follow. New technologies are currently being developed so as to ease the services as well as to curve cost taking into consideration of skill and in effect(p)ness. Methods of exhibiting health care cost are profoundly being changed. Medical information by flair of web-enabled engine room is quickly replacing the more traditional slipway people assay advice and information. Today quality management of patient care and managing logistic to reduce health care cost are integral cost reduction tools that are cur rently being studied in most health service program.1.1 chore statementAlthough logistic and merchant vessels system of rules is smoothly running to palliate the whole drift in the healthcare sector, there is still room for feeler which can also contrisolelye to reduce heavy cost and contri furthering to save money, i.e. public fund. In fact the Transport Section situated at the Vagrant Depot at Grand Riviere North West Port Louis caters for all the vogue of goods, people and services throughout the whole country. The service level of this system is difficult to measure as a whole exactly can be concluded as to be enough good but still need improvement as there are many loopholes which needs to be considered and corrective measures taken in order to achieve a better quality service. many another(prenominal) attempts have been made to improve the service quality of the existing transportation system and with the help of Internal Control remarks and topic Audit report, many r emedial actions have been taken but still the Ministry is facing a big challenge to fully satisfy all stakeholders in the health sector and improve the health services.From experience and observation made, it is concluded that nodes and other stakeholders of the transport system, also need changes and as individual, should add their contribution so as to improve continually. It is therefore obvious that drug users of transport section need to be continually monitored so as to enhance the service level and so to determine customer needs and study customer satisfaction.1.2 Study AimsThe aims of playing areaing management of logistic is to consider that part of allow for Chain counselling that plans, implements, and controls the efficient, effective, forward, and snarf track down and memory of goods, services, and colligate information between the engineer of filiation and the point of consumption (up to patients) in order to meet customers requirements as well as to reduc e cost in the long run.It needs to see how the Logistic and supply Chain Management can contribute to improve the logistic and statistical distribution system in the Ministry of Health and Quality of life.Today many companies are managing their logistic system by the help of information system thus place database of the daily activities, the planning and the action taken so as to facilitate the workload and not only satisfy their customers but also to delight them.Objectives of the studyTo identify along the distribution channel where there have been poor planning and control.To identify the method that can be used to reduce cost and save public money.To assess whether these studies can contribute in the implementation of the strategies for reducing cost in the health sector.To identify those factors that will bring changes in the whole system.To formulate recommendations and strategies so as to improve the system.1.3 Vision and Mission of the Ministry of Health and Quality of em otional state1.3.1 VisionThe vision of the Ministry of Health and Quality of Life is to build a healthy nation through the delivery of compassionate, quality and cost-effective services to the population.1.3.2 Mission StatementEnhance the health status of the populationImprove the quality of health care delivery with a status to increasing patientssatisfactionEnhance social equity through the provision of a wider draw of health services to the whole populationEnsure that the health sector is consolidated and that the health services remain accessible to every citizen.This can be implemented with the help of the Logistic and Supply Chain Management so that the safari of medical and pharmaceutical products, medical staffs and patients are transported at the right m and right place without causing any deficiency and break in the supply chain.1.4 Outline of the studyChapter 1 IntroductionThis chapter provides an overall description of the Logistic and Supply Chain Management, more p recisely in the Transport Section, at the Ministry thus exposing the aims and objectives of the study.Chapter 2 books ReviewThis chapter reviews the definition, the literature of theories, the concept, the history, the interrelation between transportation and logistic, the routing planning, the implied transport cost and the implementation of the Supply Chain Management among others. It describes about various theories and concepts that has been applied in various context to the logistic and transportation system for improvement in the service level.Chapter 3 MethodologyThis chapter gives guidance to this dissertation. In fact the methodology explain various variables used through fountainheadnaires and perceptions from people and other users in the Supply Chain at the Ministry of Health and Quality of life to reach a conclusions and make recommendations.Chapter 4 Results and DiscussionThis chapter looks at the overall heads obtained in the survey made (questionnaires) and helps in making analysis of the results thus exposing them diagrammatically through graphs and charts.Chapter 5 Conclusions and recommendationsThis chapter concludes the study made and sets recommendations in the system that will get to changes which will help to reducing cost as well as improving the system in terms of Quality.Chapter 2Part 1Literature review2.00 Definition of LogisticTheOxford English Dictionarydefines logistics as the branch ofmilitary sciencehaving to do with procuring, maintaining and transportingmateriel, forcefulness and facilities. Another dictionary definition is the time-related positioning of resources.Logistics is commonly seen as a branch ofengineeringthat creates people systems rather than machine systems. When we talk in terms of HRM logistics means giving inputs i,e recruiting manpowers which ultimately works for the final consumer or to deliver services. there is, realistically, no true name or definition that should be pedantically applied, because pro duct differs, companies differs and system differs. Logistics is a diverse and dynamic function that has to be flexible and has to change match to the various constraints and demands imposed upon it and with respect to the environment in which it works. And therefore these terms are used interchangeably, in literature and in the care world. (logistic and distribution management Alan Rushton)2.10 OVERVIEW OF LOGISTICS2.1.1 DefinitionsCouncil of Logistics Management (1991) defined that logistics is part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of manufacture and the point of consumption in order to meet customers requirements.Johnson and Woods definition (cited in Tilanus, 1997) uses five beta key terms, which are logistics, inbound logistics, materials management, physical distribution, and supply-chain management, to interpret.Logist ics describes the entire process of materials and products moving into, through, and out of firm.Inbound logistics covers the movement of material received from suppliers. Materials management describes the movement of materials and components within a firm. fleshly distribution refers to the movement of goods outward from the end of the assembly line to the customer. Finally, supply-chain management is somewhat larger than logistics, and it links logistics more at present with the users total communications network and with the firms engineering staff. The commonality of the recent definitions is that logistics is a process of moving and handling goods and materials, from the beginning to the end of the return, sale process and eat up disposal, to satisfy customers and add melodic line competitiveness. It is the process of anticipating customer needs and wants acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants optimi sing the goods- or service-producing network to fulfil customer requests and utilizing the network to fulfil customer requests in a timely way (Tilanus, 1997).Simply to say, logistics iscustomer-oriented operation management. Logisticsis the management of the flow ofgoods,informationand other resources in arepair cyclebetween the point of origin and the point of consumption in order to meet the requirements of customers.Logistics involves the integration of information,transportation,inventory, warehousing, material handling, and packaging, and occasionallysecurity. Logistics is a channel of thesupply chainwhich adds the value of time and place utility. Today the complexity of production logistics can be modelled, analyzed, visualized and optimized by plant simulation software.2.20 History and Advancement of LogisticsLogistics was initially a military activity concerned with acquiring soldiers and munitions to thebattlefront in time for flight, but it is now seen as an integral part of the modern productionprocess. The main background of its development is that the recession of the States in the1950s caused the industrial to place importance on goods circulations.It was initially developed in the context of military activities in the late 18th and untimely 19th centuries and it launched from the military logistics of World War II. The probable origin of the term is the Greek logistikos , meaning skilled in calculating. (BTRE, 2001) Military definitions typically incorporate the supply, movement and quartering of troops in a set. And now, a number of researches were taken and made logistics applications from military.2.3.0 INTERRELATIONSHIPS BETWEEN TRANSPORTATION AND LOGISTICSWithout well developed transportation systems, logistics could not bring its advantages into good transport system in logistics activities could provide better logistics efficiency, reduce operation cost, and promote service quality. The improvement of transportation systems needs the ef fort from both public and private sectors. A well-operated logistics system could increase both the competitiveness of the government and enterprises.2.4.0 loony toons Costsas a Characteristics in LogisticsTransport system is the most classic economic activity among the components of businesslogistics systems. Around one third to two thirds of the expenses of enterprises logistics be are spent on transportation.According to the investigation of National Council of Physical Proceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1657 1672, 2005Cost related to Transportation of goods does not only includes fuel cost but include the followingsOverhead costMaintenance costDrivers and loaders / helpers salariesDepreciation costManagement costFuel costTransport costs have significant impacts on any organization, be it a public body, i.e. a government institution or a private firms. In may organization, transportation cost are influenced by the ways users are ma naging and utilizing. These represents the cost of moving a passenger or a good from one place to its destination, including all associated cost involved within the activities. These judge are often visible as transport service providers should be aware of the all information to secure the transaction.2.4.1 Factors that affect transportation costThe most important factors that affect transportation cost are thus-Geography This factor is mainly concerned with distance and accessibility. Distance is commonly the most fundamental condition affecting transport costs. It can be expressed in terms of length, time, economic costs or the amount of energy used. It varies greatly according to the type of transportation mode involved and the efficiency of specific transport routes.Type of product. Many products require packaging, special handling, are bulky or perishable. As such, in the case of health sector, it involves moving medical items, pharmaceutical products, patients, medical staf f, medical services etcEconomies of scale. Another condition affecting transport costs is related to economies of scale or the possibilities to transportation of goods in larger quantities so as to lower the cost. As far passengers are concerned, it should involved merging of trips within the comparable route.Energy Transport activities are in fact large consumers of energy, especially fuel and oil. Consideration has to be given to minimise trips and hence minimising fuel consumption.Mode. diametrical modes are characterized by different transport costs. Reduction in cost is also due to different mode of transport. For example one cannot transport a small box of 25 kg in a camion of 5 tons. This could well be transported in a small van or a car which will use less fuel.2.5.0 Deficiencies that Drive Up Logistics Operations CostsLogistics, a poorly understood and often unappreciated process, accounts for a sizeable portion of a hospitals operating budget. Studies have shown that 30 % to 46% of hospital expenses are invested in various logistical activities and that almost half of the costs associated with supply chain processes could be eliminated through the use of best practices.In hospitals, logistics cover not just support services such as purchasing, stores and the pharmacy, but also health care services such as patient care units and operating rooms. Many activities that could be carried out by support personnel are often on the list of duties performed by health care personnel. The result is that the internal supply chain within a hospital is often highly fragmented.Logistics is a complex process. The people involved vary with the type of products in questions for example, stores manage medical and non-medical supplies, the pharmacy looks after pharmaceutical products and food services manages the procurement and processing of food products.2.6.0 Materials and Methods in transportation and logisticsThe literature on accounting in health care industry co vers a number of themes. Many researches have been carried out and many titles and articles have been provided regarding how to reduce the escalating medical costs and improve quality management in transportation and logistics. Some have been successful, man others have shown failures.Procurement, storage, mobilization, distribution and other aspects of providing material assistance to the health sector, and the handling of those supplies, require a good organizational structure to ensure the efficient management and utilization of resources that in emergency situations, tend to be limited.This structure is provided by logistics, the strategy of achieving practical objectives promptly and methodically while making the most effective use of available resources.2.6.1 The two basic premises1. Supply logistics cannot be unprepared at the time of an emergency. Organizations of health institutions essential see it as a cornerstone of emergency planning and preparedness efforts. Employin g resources appropriately, and being able to secure those that are not at hand, depends on first identifying their availability and location, as well as the sources for obtaining them. All those activities demanded by logistical deployment during an emergency the mechanisms for standardizing the various processes and all the necessary documents for recording information and controlling, monitoring and following up on the flow of supplies must be prepared, understood, and tested in advance.2. The various stages in the flow of supplies, from their point of origin to the moment they reach their recipients whether they be the organizations managing the emergency or the real(a) beneficiaries of the assistance are a chain made up of very close links. This is called the chain supply. How any one of these links is managed invariably affects the others. Supply management must therefore be the focus of an integral approach that looks at all the links in the sequence and never loses sight of their interdependence. This is known as supply chain logistics.Some of these procedures reflect the standards of international organizations involved in disaster response. Many others, however, are the distillation of concrete experiences by those in the field. breeding in PAHO/WHOs Scientific Publication Medical Supply Management after Natural Disasters2.7.0 Supply chain management (SCM)SCMis the management of a network of interconnectedbusinessesinvolved in the ultimate provision ofproductand servicepackages required by end customers (Harland, 1996).Supply chain management spans all movement and storage ofraw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).Definition of Supply Chain Management (SCM) provided by the APICS DictionaryIt defines SCM as the design, planning, functioning, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastruct ure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. Supply chain management is the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al. , 2001 ). A customer focused definition is given by Hines (2004p76)Supply chain strategies require a total systems view of the linkages in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer. As a issue costs must be lowered throughout the chain by driving out unnecessary costs and focusing attention on adding value. Throughput efficiency must be increased, bottlenecks removed and performance measurement must focus on total systems efficiency and equitable rewar d distribution to those in the supply chain adding value. The supply chain system must be responsive to customer requirements. Global supply chain forum-Supply Chain Management is the integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders (Lambert, 2008). According to theCouncil of Supply Chain Management Professionals(CSCMP), S upply Chain Management encompasses the planning and management of all activities involved in sourcing , procurement , conversion, and logistics management. It includes the important components of monitoring and collaboration withall partners in the chain. They can besuppliers,agents, service providers, andcustomers, users and other stakeholders in the chain. In fact, supply chain management integrates both supply and demandmanagement within and across companies. Accordingly to the same Council (CSCMP), self-organizing network of businesses that cooperate to provide product and service of ferings has been called the broad Enterprise.A supply chain, as opposed to supply chain management, is a set of organizations directly linked of the upstream and downstream flows of products, services, finances, and information from a source to a customer. Managing a supply chain is supply chain management (Mentzer et al. , 2001).Supply chain management softwareincludes tools used to execute supply chain transactions, manage supplier relationships and control associated business processes.Supply chain event management (abbreviated as SCEM) is a consideration of all possible events and factors that can break up a supply chain. With SCEM possible scenarios can be created and solutions devised.2.8.0 Transport Management System (TMS)TMS are one of the systems managing thesupply chain. They belong to a sub-group called Supply chain execution (SCE). TMS, has become a critical part of any (SCE) Supply Chain Execution and Collaboration System in which real time exchange of information with other SCE modules has become mission critical.Transportation Management Systems manage three key processes of transportation management2.8.1 planning and Decision Making in Transportation and LogisticsTMS will define the most efficient transport schemes according to given parameters, which have a lower or higher importance according to the user policy transport cost, shorter lead-time, fewer stops possible to insure quality, flows regrouping coefficient2.8.2 Transport follow-upTMS will allow following any physical or administrative operation regarding transportation traceability of transport event by event (shipping from A, arrival at B, customs clearance), editing of reception, custom clearance, invoicing and booking documents, sending of transport alerts (delay, accident, non-forecast stops)2.8.3 Measurement of the Transport Management SystemTMS have or need to have a Logistics KPI reporting function for transport.Various functions of a TMSPlanning and optimizing of terrestrial transport roundsTransportation mode and carrier selectionManagement of air and maritime transportReal time vehicles trackingService quality controlVehicle Load and Route optimizationTransport costs and scheme simulationShipment batching of ordersCost control, KPI reporting and statisticsTypical KPIs include but not limited to% of On Time Pick Up or Delivery Performance relative to requestedCost Per Metric mile km Weight Cube Pallet2.8.4 Route Planning and OptimizationReduce dispersion Costs Fleet Miles Daily routes are created using powerful algorithms and street-level routing, in conjunction with your business constraintsIncrease Resource Utilization-Make better use of existing resources by delivering more and driving less. The answer to increasing volume is not endlessly to put more vehicles on the road, but to make smart, efficientMake Sound Business Decisions -Understand how delivery costs affect the profitability of each customer by knowing the actual cost per stopSet Driv er Standards Creating route plans and gathering actual information allows you to set performance standards and expectations-which can result in less overtime and better driver performanceDecrease Routing Time Let your routers spend less time configuring routes and more time assessing what-if scenarios to evolve better, more efficient routes.Contingency Planning Prepare for holiday or seasonal spikes and other what if scenariosReports Driver manifests, maps, directions, resource utilization, customer delivery cost, actual versus communicate by route and by stop, planned route summaries and many more reports to help consistently in evaluating a system.2.8.5 Load OptimisationA strong Load Design which should be also accurate for many Route Types Each route requires different loading system. In fact different types of equipment are used at different loading and unload bays depending on the routing system.Multiple Loading Strategies These are different types of techniques used for operating at the loading and unloading bays. It could be in terms of software or some working methods used by machine operators so as to increase the output of work by minimising physical efforts.Building Load in advance a common techniques applied by many warehouses is to pre-build or to prepare the load in advance and store them in some identified location and which will be useful and same time in a Pre-Build Orders Load orders to be picked, built and pre-staged throughout the day, all while continuing to have them allocated to the correct route and truck during the final loading passLoad Design to Reduce Product Breakage Most breakage occurs within the first 10 minutes of a route due to poor packing.Reports Final load sheet, driver check-out, load validation and pick sheets provide you with all of the detailed information required.2.9.0 Supply chain management must address the following problems2.9.1 Distribution dodgingDefinition of strategy A strategy is a pattern of major objectives, purposes or goals and essential policies or plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the king of company it is or is to be . (Drucker, 1961)2.9.2 The distribution strategyThe business environment is unpredictable and complex to anticipate and forecast effectively. As such strategies have to be developed so as to meet the need of everybody in the supply chain. These include patterns of actions that should be planned and intended in the management of the transport so as to handle the distribution channel in a more appropriate way. This strategy can also be developed in the supply chain management whereby it will raise a question of centralising or decentralising the warehousing and delivery. This strategy will of course reduce the day to day transport arrangement problem.2.9.3 Trade-Offs in Logistical ActivitiesThere are many activities in logistic system andTrade-offs may increase the total cost if only one of the activities is optimized. For example, a full loaded lorry distributing stores is more economical on a cost than less than the lorry load capacity (e.g. half lorry load). The full lorry load of a product will reduce transportation costs and will therefore strike the inventory holding costs which may in turn decrease total logistics costs. It is therefore imperative to take a systems approach when planning logistical activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM strategy.2.9.4 Distribution Network Configuration number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers.2.9.5 Tiering of SuppliersOrganisations have for many years sought to reduce their supplier base as they seek to implement a lean supply regime. Segmenting the chosen supply base into points gives a measure of priority in the management of the supply chain.The fir st tier is reserved for the immediate and direct suppliers of assemblies / manufacturers and so forth whereas the second and third tier suppliers are reserved for component suppliers who supply the first tier suppliers, thus removing them from direct appointment with the manufacturer.Therefore tiering is important in the direction and management of the supply chain as the first tier supplier is responsible for ensuring that there has been a movement in the supply chain and also is receiving from his direct supplier.Information Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc.Inventory Management Quantity and location of inventory, including raw materials, work-in-progress (WIP) and finished goods.Cash-Flow Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.Holding a huge amount of inventory mean huge cap ital tide up and therefore involving large amount of money and also increasing the holding cost. A good management in logistic and supply chain will undeniably give rise to a good cash flow and managing fund equitably.Several models have been proposed for understanding the activities required to manage material movements across organizational and functional boundaries.One model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational levels.Importance of Supply Chain ManagementOrganizations increasingly find that they must rely on effective supply chains, or networks, to compete in the global market and networked economy. In Peter Druckers (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies .During the past decades, globalization, o utsourcing and information technology have enabled many organizations, such as Dell and Hewlett Packard , to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Scott, 1993). This inter-organizational supply network can be acknowledged as a new form of organization. However, with the perplex interactions among the players, the network structure fits neither market nor hierarchy categories (Powell, 1990). It is not clear what kind of performance impacts different supply network structures could have on firms, and microscopic is known about the coordination conditions and trade-offs that may exist among the players. From a systems perspective, a complex network structure can be decomposed into individual component firms (Zhang and Dilts, 2004).Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for th

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