CHAPTER- 2

CHAPTER 22.1 REVIEW OF RELATED LITERATUREThis chapter gives the related information of the previous research study regarding the supply management system about essential stock supplies focuses on a public hospital. The certain methods and approaches that will discuss in this chapter, will help the readers to fully understand the topics and also gain new ideas to develop this research study in the future. Supply Chain Management According to the (Kazemzadeh, 2012), supply chain management is the key concept, strategy, and methods that have been proving its values in hospital management. This approach is effective in hospital management. The study shows the implementation of the supply chain management in the hospitals has successfully recorded, inventory reduces to 50%, 40 % of the increase in on-time delivery and doubling of inventory returns coupled with nine-fold reduction in out of stock rates. Moreover, (Lang & Cheng, 2012, Aregon,2018 and Albarune), supply chain management is innovation and improve the efficiency that has a positive impact to the cost, quality care, and the patient satisfaction. It also has an important role for health care providers to determine the saving in the industry. In the other hand, supply chain management also adding value to the customer creation such as efficient data management, reduction in medical error, and fast processing of patient care. Another research study by (Hamid,2009), the performance in the hospitals depends on the doctor satisfaction dimension (DSD) and the supply chain input (SCI). On the contrary, the study of the (Schwarting), to improve the supply chain management and hospital performance through the three stages of maturity, such as Foundation Model, optimization model, and transformation model. these models will improve the operation, cost and efficiency and the quality clinical outcomes. In addition, the study of (Gbadeyan, 2017), indicate that supply chain management is not a direct impact on hospital performance, but has an indirect impact through the Competitive Advantage. The authors recommend that to have high performance, the hospitals should not depend on a single supplier but should engage more reliable suppliers that would be closer to them for better medical procurement and supplies to be achieved. Hospital Management System To have an optimal hospital management system, (Olamide, 2015) suggest that hospital management system should adopt the electronics device instead of a manual system. The electronics device such as the database, object-oriented programming language, and networking techniques. These electronics device or techniques that will help the hospital to improve the efficiency, shorten the operation, heighten administration & control, quality patient care, strict cost control, and improved profitability in hospital. This study was supported by (Matarlo, 2018) that hospital should adopt the computerize hospital management system to improve the efficiency in administer patient registration and admission details, manage the admission bills and pharmaceutical payments and also monitor medicine inventory of the hospital pharmacy. Inventory management system According to (Daryl Nuyda, 2012) developing a system that automates requests, records and monitors for hospital medicines and supplies eliminates manual process where it can provide an accurate and convenient system of medical supplies. Moreover, (Arora,2018, Rommel Reyes,2004 and Fairuza Razali,2005) implemented a system for pharmacy inventory that is focused on monitoring medicine stock. However, (Aristides Matopoulos,2013 &Dana Johnson) installed ERP system that allows practitioners to manage large volumes of records to transmit information electronically, they both used an interview protocol associated with inventory management, (Emil Histrov, 2015 &Toshio Awaya,2005) surveyed staffs and established a tracking system to manage lot number for efficiency in locating inventory where it provides effective solution to help bridge the inventory data gaps, the same study was found out by (Dana Johnson) but through the establishment of a bin system to better locate supplies and manage the inventory that results into an overall reduction in number of inventory items. (Hundessa Daba,2017) found that implementing a web-based inventory system helped the hospital to quickly go through the technology in hand where the systems display the exact date of equipment registration which plays an important role in the disposal of aged equipment. An inventory simulator (EOQ, SM, and LUC) that generated demand 1320 working days and stored data on inventory levels and stocks was developed by (Lei fsson,2012) and found out that EOQ policy produces less amount of money in inventory. However, (Agrawal, 2015) developed a web-based portal that displays order inventory and future inventory demands and found out that the analytic model allowed eliminating placing orders for whose demand was not expected and used Evolutionary Algorithms (EA) like Genetic Algorithm (GA) is used for cost equation.Review Policy (Jason Galka,2016) compared EOQ and Qi each with periodic and continuous review and found that continuous review system us less expensive where (Hasan Basri, 2013& Adhiutama, 2017) agreed and stated that the most approachable policy to be is continuous review policy. However, further study was performed where (Rachmania, 2013) implemented (R,s) policy or periodic review policy transformed into a basestock policy by setting the standard demand period equal to the review period length. This study is conversely by (Krichanchai,& MacCarthy), used (R,s) policy but for VMI approach. Another study that is performed by (Apras, 2011) where he analyzed the current situation by using process mapping, forecasting, and data analysis and concluded that (R,q) policy an optimal model provided cost savings.Forecasting, MRP Techniques (Polater & Apras, 2011) that used forecasting errors (MAE, MAPE), AIC, BIC, and R-Square concluded that in order process management issues occur due to the poor inventory management system. Therefore, both of them implemented demand management by using demand forecasts. In the study of (Rachmania,2013) it was found out that Holt’s model (forecasting technique) results into having the smallest error compared to (S,q) policy. According to (Iannone, 2013) adopting MRP technique (defining safety stock, gross requirement, net requirement) shows a cost saving of 10% compared to the traditional policy of the hospital. While in considering demand of stocks, (Perlman,2019) considered deterministic demand for perishable medical demands while (Rossetti,2008) suggested that the use of demand management by a streamlined system can reduce safety stock by 20%. Stockless System (Rossetti,2008 & Tıbbi, 2011) found that implementing a stockless system where the distributor delivers directly to the nurse’s station but initially require high levels of collaboration and trust between vendor partners resulted in having psychological benefits and reduces employee resistance.Two Bin Replenishment (Bartram,2014) came to the conclusion that the amount of travel the worker had to walk to replenish their cart reduced by implementing two-bin replenishment where (Parsa, 2011) also noted that two bin replenishment system allows continuous time tracking of inventory levels. However, (Aljure,2017) used SIPOC and performed a two-bin system time study to identify the percentage of time spent stocking the unit where it was found out that 27% of stock keeper’s time was spent completing Reactive Inventory Practices. RFID (Parsa, 2011, Leaven,2017,& Mathew), implemented RFID to prevent out of stock situations, identify Real-time tracking of goods. (Ajami & Rajabzadeh,2013) found out that adopting RFID can reduce cost, time, human resources, prevent theft, and optimize nurse’s performance. However, (Dan Feng Lu, 2011) found out that implementing RFID may concern on some particular issues of privacy. While (Tıbbi,2011) conducted a case study regarding the effectiveness of the Lean inventory system in the health care industry and concluded that the barcode system eliminated most of the errors. Inventory Management According to (Leaven et al, 2017, Matopoulos,2013 & Spulick) using of VMI for order fulfillment involves collaboration between suppliers and their customers whereas software analyzes the data and creates recommended replenishment orders. (Matthew) concluded that the supplier assumes responsibility for the management if inventory and takes decisions regarding replenishment. Also, the study of (Krichanchai & MacCarthy, Noorfa & Andrew,2009) used VMI approach that enables to reduce the shortage cost and ordering cost. However, a different approach was used by (Matopoulos,2013), where he concluded cost reduction is not the most salient benefit of a VMI implementation through the survey and implemented CMI an automatic replenishment triggered by customer input to be charged only for the materials actually used. (Agrawal,2015) suggested a predictive analytical model optimize the inventory that allowed eliminating placing orders for commodities whose demand was not expected and found out that it can know how much of the inventory Commodities was needed to order next month.ABC and VED Analysis According to the (Dr. Dhanorkar2013, Khurana, 2013 and Yiğit,2016) to analyses the annual medical materials expenditure and consumption using inventory control techniques such as ABC and VED analysis. These techniques were reviewing in the descriptive study (Kumar,2018) using ABC, VED matrix analysis where the analysis showed under consumption of high-value drugs for category A were identified and the results of VED analysis showed Vital, essential and desirable drugs. According to (Dolia,2018) Middle management including OT in-charge should focus on category B efficiently for daily operations. It was also found out that combined of ABC and VED analysis has proved to be an efficient and effective tool to classify medicinal product (Theptong, 2015). Moreover, (Singh, Kritchanchai & Meesamut, 2015) concluded that using ABC-VED matrix could achieve time-saving and assured availability of needed drugs by closely supervising category. Another study by (Solanki,2013, Kant,2015 and Hafnika,2017) implemented ABC analysis only for medical supplies and should be carried out with standardization and codification, however (Joana Nabai, 2010) also implemented ABC analysis and concluded that as the acquisition costs and the number of items changed every year, ABC analysis has to be drawn yearly.Reorder Point (Theptong,2010) used a qualitative research method and observation at premises and interviews were also carried out and was found out that reorder point and order quantity was determined based on arbitrary policy. However, (Parsa, 2011) developed and concluded that stochastic control model will determine optimal order quantities and reorder points.Drug Shortage According to the study of (Gu, 2011) drug shortage that happens in the US is caused by the shortage of raw materials, issues related to manufacturers, regulatory and legislative factors, and labor disruption, unexpected demand, natural disasters. It is approximately 27% of the shortages are unexplained. Due to the drug shortage, it is an impact on hospital performance such as quality healthcare, financial impact, grey market distribution. To prevent it, the researchers conclude that, the relevant organizations should have strengthened FDA’s (food and drug administration) roles, regulations to halt gray market activities in short supply, grant temporary authorization to foreign markets and approve pharmaceutical products from Western European countries. Another factor, based on the study of (Caulder,2016 & and Kaakeh), the main factor of the drug the shortage that frequently happens is miscommunication amongst the hospital and the distributor and also due to the markup medications on the shortage list and the institutions have auto substitutions for drug shortages that have been pre-approved by Pharmacy & Therapeutics Committees. (Kaakeh) revealed that due to the drug shortage the Pharmacists and pharmacy technicians spent more time managing drug shortages than did physicians and nurses, it was affected by the labor cost in the US health system. While the study that conducts by (Alruthia, 2018) in Saude Arabia, the drug shortage is frequently happen caused by domestic factors. Therefore, to prevent the drug shortage, St.Luke Hospital in Haiti implementing PCIP(pharmacy computerized inventory program) to improve drug inventory management in a simple and sustainable manner within a recourse-constrained hospital (Holm 2015). Lack of Hospital facilities (Saeed & Ibrahim), the resulting survey at the Jinnah Postgraduate Medical Centre (JPMC), expose that 84% doctors favored the reason of inadequate salary to doctors & paramedical staff by the government while other two reasons favored by 80% doctors were lack of facilities and security for doctors and illiteracy and poverty of patients. A similar study was conducted by (Della & Ayanthi 2017) in the District Base Hospitals, lack of efficient equipment management system and all hospitals were found to be without guidelines for procurement of equipment. (Della & Ayanthi 2017) conclude that Most of the hospital departments (85.4%) do not have proper register maintained for equipment maintenance. Only 14.6% that have an equipment maintenance register but all these registers were lacking necessary details.Other Methods According to (Matthew) using virtual centralization of the supply chain helps to improve the level of cooperation in hospitals so helping to control costs and improve services. (Severi Saraste) suggested that the RS process does, in fact, reduce ordering errors significantly. (Al-Sa’ada) used regression analysis to identify the impact of supply chain management dimensions, however (Severi Saraste) suggested that with the use of regression analysis can find errors in order rows and order volume. 2.2 CONCEPTUAL FRAMEWORK 2.3 STATEMENT OF HYPOTHESIS What are the essential medical supplies needed in a public hospital?H0 = H1 = What are the significant factors that affect essential drug and medical supply shortages and its prevalence in a public hospital?H0 = H1 = What is the suitable inventory review policy that can optimize essential stocks and replenishment?H0 = H1 = In what ways does the review policy will minimize the occurrence of shortages?H0 = H1 = 2.4 DEFINITION OF TERMS CMI FRID (Radio Frequency Identification) _ technology used to encode the tags with the product data.Grey market distribution _ refers to the distribution of goods that unintended by the original manufacturer. MRP (Material Requirement Planning) _ is a system for calculating the material plans and production schedules based on the lead times of a supply chain. SIPOC (supplier, input, process, output, costumer) _ refers to tools used by the team to identify all relevant elements of a process improvement project before work begins.VMI (Vendor Managed Inventory) _ is inventory management techniques, where a supplier takes responsibility for maximizing the inventory. It requires electronic communication where both supplier and consumer can access Virtual centralization

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