Efficiency of Inventory in Thai Hospitals: Comparing Traditional and Vendor-Managed Inventory Systems

Author:

Adirektawon Sarunya1,Theeraroungchaisri Anuchai1ORCID,Sakulbumrungsil Rungpetch C.1ORCID

Affiliation:

1. Faculty of Pharmaceutical Sciences, Chulalongkorn University, 254 Phayathai Road, Pathumwan, Bangkok 10330, Thailand

Abstract

Background: Traditional procurement and price negotiation methods in public hospitals in Thailand involve group purchasing agreements and bulk orders, posing challenges to improving inventory management efficiency. The vendor-managed inventory (VMI) model is a promising alternative for enhancing hospital performance, especially during crises. This study aimed to assess the potential cost savings in implementing VMI in a large general hospital in Thailand. Methods: A simulation modeling approach was used to compare the current inventory system with three VMI models: VMI1, focused on improving inventory turnover rate (ITR); VMI2, emphasized frequent replenishment with a 1-month supply; and VMI3, eliminated safety stock. Results: The results demonstrated significant cost savings, with potential reductions in total inventory management expenses. Specifically, VMI1 improved ITR from 6.31 to 7.76, reducing average inventory by 36% and cutting management costs by 40%. VMI2, with an ITR of 12.80, reduced inventory by 44% and saved 47% in management costs, while VMI3 achieved a 70% reduction in inventory and a 69% saving in management costs. Conclusions: This study highlights the VMI’s transformative potential in hospital inventory management, demonstrating significant cost savings. However, in the public sector, the feasibility of procurement regulations requires further exploration.

Funder

Chulalongkorn University, Rachadapisek Sompote Fund

Publisher

MDPI AG

Reference31 articles.

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