Measuring performance of government-supported drug warehouses using DEA to improve quality of drug distribution

Abstract

PurposeDrug warehouses (DWs) play a crucial role in drug distribution of government-supported healthcare supply chain as it controls both the cost and responsiveness of the logistics activities. The current study proposes a methodology using data envelopment analysis (DEA) to estimate the performance along different dimensions and was applied to 30 government-supported DWs.Design/methodology/approachThis study employs DEA to evaluate the performance and relative technical efficiency of DWs. In this research, four inputs and six outputs are identified based on intensive literature review and discussion with all stakeholders of DWs. The inputs are warehouse storage capacity, temperature-controlled storage capacity, number of skilled employees and operational cost, while the outputs are fill rate, number of generic drugs, volume of drugs, consumption points, inventory turns ratio and time efficiency.FindingsResults show that 30% DWs operate at the most productive scale size with 100% efficiency level while 47% DWs have a significant possibility for further enhancement in productive efficiency and 23% DWs should diminish their operational size to increase their productivity level. It was also found that achieving 100% operational productivity along warehouse space capacity needs significant effort, whereas other three inputs, namely temperature-controlled capacity, number of skilled employees and operational cost, require comparatively less effort. Similarly, it was observed that the performance along the fill rate and time efficiency is satisfactory, whereas the performance along other fours output variables (i.e. number of generic drugs, volume of drugs, consumption points and inventory turns ratio) needs to be improved.Practical implicationsThe findings offer insights on the inputs and outputs that significantly contribute to efficiencies so that inefficient DWs can focus on these factors.Originality/valueAlthough many issues related to DEA have been widely researched and reported, but no literature has been found for analysis of DWs in general and government-supported DWs specifically to find out efficiencies for supply chain performance improvement.

DEA-Based PROMETHEE II Distribution-Center Productivity Model: Evaluation and Location Strategies Formulation

“…Indubitably, the existence of such applications provides a sort of validation of the outcomes discussed in this paper. Several previous research works were carefully selected and are listed in Table 5 in order to enrich the discussion in terms of how these previous studies contribute differently compared to the current study, and considering the use of DEA and PROMETHEE [29][30][31][32][33][34][35][36][37][38]. Irrelevant application to the "distribution centers".…”

“…Measuring performance of government-supported drug warehouses using DEA to improve quality of drug distribution [37]. 2020 Context: Drug warehouses; Criteria: 4 inputs (warehouse storage capacity, temperature-controlled storage capacity, number of skilled employees and operational cost) and 6 outputs (fill rate, number of generic drugs, volume of drugs, consumption points, inventory turns ratio and time efficiency); Alternatives: Warehouses.…”

“…The abovementioned MCDM research and applications were developed intentionally for DCs where such an MCDM dilemma could also be extended to cover the issue of evaluating and selecting warehouse and logistic center locations [11,28]. In this regard, further MCDM studies, particularly DEA and PROMETHEE applications, can be found in [29][30][31][32][33][34][35][36][37][38].…”

Classifying healthcare warehouses according to their performance. A Cluster Analysis-based approach

“…Drugs, except for those ones that are very specific or with high economic values, and consumable goods are typically managed as stock items. This policy is applied to the healthcare products that are used by multiple hospital wards on a constant basis, so that keeping a reserve in a warehouse enables a prompt delivery to points of use, without running the risk of items stored for a long-time wasting space and value as well as being subjected to obsolescence (Akcay and Lu, 2017; Dixit et al , 2020). On the contrary, suppliers send direct delivery products either to the warehouse or to points of use.…”

“…Performance measurement is highly needed for any organization in order to highlight the existing problems (Dixit et al , 2020) and there is a broad stream of literature focusing on the development and on the assessment of warehouse and inventory performance, in both manufacturing and healthcare sectors. The broad interest on the topic depends on the high impacts that warehouses processes have on cost.…”