Cost effectiveness of sterilization logistics Västernorrland County Council

Abstract: As a result of the current global financial recession public health care in Sweden is receiving less subsidies from the Government. These circumstances call for logistic improvements in order to slash health care costs and retain high quality service. This thesis is commisioned by Västernorrland County Council and comprises the sterilization logistics at the three county hospitals. The focal point of the thesis is the flow of material and information between the sterilization department (supplier) and the operating department (internal customer). There are currently one sterilzation department at each of the three hospitals with responsibilities to sterilize and deliver operating instruments to their customers. The operating departments are the largest customers in terms of revenue and quantity. To decribe the present situation of the flow of material and infomartion an account of the business has been conducted and analyzed with logistics methods. Furthermore, the commisioner expressed a desire of investigating prevailing conditions for implementing pull based production into the organisation and consequences of having external transports between hospitals (if a production facility was to be shut down). Moreover, conditions for implenting lean principles into the organisation have been surveyed. When analyzing the flow of material and information some problem areas have been identified. The current break down of responsibility for the product flow between supplier and customer may cause multiple unnecessary control check points, whereas alloting one of the departments with responsibility of the majority of the flow might be more favourable for overall performance. Furthermore, capital occupied in stock are high and so is the ratio of resterilization of unused products. The results of the external transports study was ambigous as the facility costs for the Örnsköldsvik and Sollefteå sterilization departments were similar. Therefore, further work is needed to establish what functions are required at the hospital where production might be shut down. However, transports in favour of local production show great potential for decreasing overall costs. This study also show that conditions for implementation of lean principles within sterilization activities in Västernorrland City Council are not optimal. However, present push based production is causing high stock levels. Any changes in ways of production must be designed to accompany safety guidelines enforced by the operating department.