A Discrete Event Simulation Model for Coordinating Inventory Management and Material Handling in Hospitals

TL;DR

This study develops and validates three discrete event simulation models to analyze how coordinated inventory management and material handling improve operating room efficiency and reduce costs in hospitals.

Contribution

It introduces a comprehensive simulation framework comparing no, partial, and full coordination of inventory and material handling in hospital settings.

Findings

Coordination improves OR efficiency and reduces costs.

JIT delivery lowers inventory without compromising service.

Full coordination yields the best operational outcomes.

Abstract

For operating rooms (ORs) and hospitals, inventory management of surgical instruments and material handling decisions of perioperative services are critical to hospitals' service levels and costs. However, efficiently integrating these decisions is challenging due to hospitals' interdependence and the uncertainties they face. These challenges motivated the development of this study to answer the following research questions: (R1) How does the inventory level of surgical instruments, including owned, borrowed and consigned, impact the efficiency of ORs? (R2) How do material handling activities impact the efficiency of ORs? (R3) How do integrating decisions about inventory and material handling impact the efficiency of ORs? Three discrete event simulation models are developed here to address these questions. Model 1, Current, assumes no coordination of material handling and inventory decisions. Model 2, Two Batch, assumes partial coordination, and Model 3, Just-In-Time (JIT), assumes full coordination. These models are verified and validated using real life-data from a partnering hospital. A thorough numerical analysis indicates that, in general, coordination of inventory management of surgical instruments and material handling decisions has the potential to improve the efficiency and reduce OR costs. More specifically, a JIT delivery of instruments used in short-duration surgeries leads to lower inventory levels without jeopardizing the service level provided.