Performance Analysis of Central Warehouses Activities in Quebec Health Care Institutions

Quebec’s health and social services network is currently working to optimize administrative procedures so as to meet ministry objectives. Supply and logistics management is among the activities targeted by these efforts. Based on a benchmarking study of the logistics activities of health care institutions on the Island of Montréal, this report analyzes the productivity of the central warehouses serving these institutions and seeks to identify practices yielding superior results. Central warehouses play a key role in health care institutions. Their staff must be able to efficiently receive material from external suppliers and prepare it to meet the needs of care units. The productivity of employees working in central warehouses was therefore measured based on these two activities: order reception and order preparation. The data analyzed came from twenty-one health care institutions divided into three sub-groups based on whether or not they included a surgical unit or provided specialized care.

Analysis of this data revealed the following:

• Almost all the institutions studied deal with major physical constraints (distance between receiving platform and central warehouse, low ceilings limiting vertical storage, divided storage areas, etc).

• Overall, the average performance of the three sub-groups is similar.

• However, if we separate the most effective institutions, we find significant differences with the averages of the other centres. This difference can be as much as 55% for reception activities and 87% for order preparation activities.

• Institutions posting the best results have largely implemented best inventory management practices: rotation of the location of materials to minimize movements, systematic use of performance indicators, use of electronic data interchange (EDI), and reminding employees of work instructions

• If institutions posting poorer results were to improve their practices, institutions on the Island of Montréal would not have to replace central warehouse employees who are due to retire in the coming years.

A follow-up study should seek to compare the performance levels of the best institutions in this survey with those in comparable sectors of activity. Such a benchmarking exercise would establish whether the best institutions could further improve their performance. It could also identify innovative approaches that could be implemented in the health care sector.