Adopting a Just-in-Time Approach Maximizes Space in Health Care Facilities

How a reliable supply chain can create a competitive advantage

Adopting a Just-in-Time Approach Maximizes Space in Health Care Facilities

Space is at a premium in health care settings, and reliable just-in-time (JIT) logistics are helping providers optimize care by devoting space to patients rather than inventory. What's more, utilizing lean inventories also allows health care facilities to maximize operational efficiency and improve the cost effectiveness of their services.

"[Health care] organizations would rather use space for patient care than a storage closet," said Jeff Jackson, president of Penske Logistics. "That is driving more just-in-time shipments and less storage. Order frequencies have increased, and the quantities have decreased as the confidence in the network grows."

Optimizing the supply chain can help drive more effective patient care at the lowest operational costs. "As long as they have a reliable supply chain to get what they need when they need it, they don't have to stock extra supplies," Jackson said.

Reliable Service

Dependability is critical for lean inventories to work, and Penske helps facilitate just-in-time deliveries by providing visibility throughout the supply chain. "We give real-time traffic and weather updates along with the estimated time of arrivals and exception reporting," Jackson said. "If various storms roll across the U.S. over the period of one week, it stresses the supply chain, and our customers need that visibility."

Through its ClearChain® technology suite, Penske Logistics houses information in a central repository that makes it organized and easily accessible. Multiple parties within the supply chain can access and use the information to improve service and decision-making.

At the same time, Penske works with its customers to create emergency action plans to get ahead of potential disruptions or recover quickly if a disruption occurs. That can be especially important for health care providers and distributors, which often experience unpredicted demand surges. "During some events, a lot of our customers may not run, so we'll have drivers idle who we can move into a health care position if we need to," Jackson said.

During COVID-19, for example, Penske was able to pivot drivers to critical accounts as some customers' operations slowed. "We can also scale our operations by tapping into Penske's fleet of rental trucks," Jackson said. "We just don't have equipment issues because we have so much availability."

The ability to leverage multiple sources of capacity can help mitigate supply chain disruptions no matter what has caused them.

Unique Solutions

Health care facilities, such as hospitals and surgery centers, often require multiple delivery points. "We may be there for multiple hours delivering to various points within the facility to ensure each division has the appropriate supplies," Jackson said, adding that Penske completes attended and unattended deliveries. "Some are done overnight or very early in the morning when things aren't quite as busy, so they're ready for the day."

The deliveries are highly customized depending on the health care facility's needs. "We may have a tote for a knee replacement for a specific operation or a tote for various kits that go to a certain surgery ward," Jackson said, adding that drivers may also handle stock rotation in storage rooms.

Deliveries can be done in totes, pallets or cages and typically use returnable containers that have to be managed. "The hospital doesn't want them there taking up space, and the distribution center needs to clean them, recycle them and get them back into the loop," Jackson said.

While the health care facility dictates its specific delivery needs, Penske Logistics can accommodate a variety of equipment. "We're using electric pallet jacks, hand trucks and forklifts," Jackson said.

A Competitive Advantage

In health care, logistics is about more than the movement of goods. It is about patient care, and it is critical to have the right products available at the right time. A reliable, optimized supply chain drives more effective patient care at the lowest operational cost. That, in turn, creates a competitive advantage for health care providers and improves patient outcomes.

"Instantly knowing where your products are within the supply chain is critical in a health care setting and gives you a competitive edge," Jackson said. "The quality and efficiency of the supply chain has a direct impact on patient care."

Jeff Jackson
Jeff Jackson is president of Penske Logistics. He is a transportation industry veteran who has held operations management and leadership roles at both Penske Logistics and Penske Truck Leasing, across a career that has spanned nearly three decades.