Lessons for Health Logistics from the Automotive Sector

With the dual challenges of increasing demand and cost pressures, addressing supply chain challenges is becoming even more difficult for well-established healthcare companies. What if health logistics looked to different sectors for evolution?

Within the health sector, supply chain management has been seen as a relatively niche concept. Across the healthcare system both clinical and non-clinical teams use systems to order supplies, dispense medications and identify medical devices, collectively forming a supply chain.

Traditionally the task of managing the supply chain was seen as a ‘back office’ function; however with the dual challenges of increasing demand and cost pressures, addressing these challenges is becoming even more difficult for well-established healthcare companies.

What if there was a new way of working?

What if health logistics looked to different sectors for evolution?

Health sector logistics experts looking for a new way of working should look at the evolution of other industries. Automotive has faced disruptive landscapes, as currently being experienced by the health sector. However with expert guidance these disruptions were followed by a wave of transformation which not only enhanced performance but also generated growth and innovation.

What do car parts have to do with patients?

There is a lot of transferable knowledge in the way in which Unipart serves its automotive clients compared to how the health sector needs to serve its patients.

The automotive supply chain can be fragile due to the number of variables – global supply, vast part numbers, tracking and just in time production (to name a few). All of these have made the automotive supply chain increasingly complex.

A few of the automotive logistics requirements are:

  • Parts tracking
  • End to end visibility of stock
  • Just in time production—meaning right product, right time and in the right place
  • Parts sequencing
  • Maximised part availability to the point of customer demand

Combined with these characteristics:

  • High variety of part numbers
  • Critical nature of parts
  • Product variety—bolts and screws to car batteries
  • Parts storage conditions—temperature controlled
  • Lean production—The Toyota Production System (Just in time, Jidoka & Poke Yoke)

How do screws and batteries relate to bandages and medicine?

The automotive sector is built upon the foundations of The Toyota Production System—a way of working which ensures just in time production, quality to be built within the process, and stop points to avoid passing on defects. Within healthcare quality is inherent and customer centric processes are required at all times…because when it comes to medicine it has to be right first time.

There are a number of synergies and characteristics of automotive logistics to health logistics.

1. Parts tracking and GS1 standards

The Department of Health has mandated that every service and product procured by an NHS Acute Trust in England must be compliant with GS1 standards by 2019/20. GS1 standards should be used to manage inventory in all locations from store cupboard to a patient’s wrist. Due to the complex global supply chain and build requirements of a car, manufacturers also require end to end visibility and traceability of parts throughout the supply chain.

2. ‘Just in time’ and the critical nature of the products

In lineside logistics if a part is not available then the production line will be stopped—this incurs quality targets to be missed, delivery targets for production to fail and spiralling cost while the line is stopped. Within the health sector if the medicine is not available for dispense to a patient it can then be a life or death situation.

3. Storage requirements—temperature controlled

This is something I recently learnt during an analysis of current space and clients when looking for temperature controlled warehousing space for a pharmaceutical company. Certain car parts require temperature control—bumpers must be stored between 15-40 degrees. The MHRA outlines clear guidelines for the temperature requirements for the storage for medicine, medical devices and blood.

4. Parts variety

Imagine how many different consumables there are on a hospital ward—ranging from plasters, tubing for IV fluids all the way to the beds patients are physically in; all of which vary in size and quantity.

Apply this thinking to a car—different screws, the seats and even the shell of the vehicle. Unipart Logistics manage the aftermarket parts warehouse for an iconic British car brand—the total number of parts in that warehouse is 42,000!

We tend to think the future of healthcare is in the hands of scientists. What if we could do more with logistics within the health sector?