Case 6-A – Assignment Example

Case Problem 6 – A Just in Time Worries at the of Utah Hospital Case Problem 6 – A: Just in Time Worries at the University of Utah Hospital
1. How suitable is the just in time inventory management system for the University of Utah Hospital (as well as for other large hospitals)?
Just-in-time inventory management system is defined by the Farlex Financial Dictionary (2009) as “a supply chain management system designed to reduce carrying costs to a minimum. A firm only orders what it expects for its immediate needs; therefore, it keeps a low inventory. JIT systems require that the retailer at the end of the supply chain can accurately predict demand for its products. They also require that each stage of the supply chain knows exactly how much time it takes to fill an order when it is made” (par. 1). In a hospital setting, JIT management system would only be suitable for University of Utah Hospital, or for other large hospitals, for that matter, if the following conditions are met: (1) close and coordinated relationship between the hospital and suppliers; (2) an effective communication system between the hospital and identified suppliers must be instituted (use of online computer technology between hospital and supplier/s); (3) locations of identified suppliers need to be considered to take into account proximity to the hospital; and (4) an efficient purchase inventory officer at the hospital must identify and project demands for drugs with maximized accuracy.
2. What recommendations would you make to the hospital in question to have drugs available to deal with a pandemic or other emergency?
For hospitals opting to practice the JIT inventory management system and faced with a
pandemic or emergency situation, the careful management of inventories is critical. In the study made by Kua-Walker, the author revealed viability of the following recommendations: (1) the need for “buffer or safety inventory” (Baum, 2006; Whitson, 1997); (2) using the JIT system only on hospital items (administrative supplies, linens) that are not affected by emergency situations (Kim & Rifai, 1992); (3) and the design of an emergency response plan incorporating the supplier and nearby-hospitals to address critical drugs during emergency situations (Kua-Walker, 2010, 6).
Baum, N.H. (2006). “‘Just in time’ means more dimes in your pocket: Stocking only what your
practice needs takes careful planning, but offers big savings.” (The Bottom Line). Urology Times, 34 (1), 28.
Kim, G.C. & Rifai, A.K. (1992). “Efficient approach to health care industry material resource
management: An empirical research.” Hospital Material Management Quarterly, 13(3), 10- 25.
Kua-Walker, Y.A. (2010). Can a Just-in-time Inventory System Help Reduce Costs and
Increase Productivity in Hospitals? Retrieved 07 October 2010.

Farlex Financial Dictionary. (2009). Definition of Just in Time. Retrieved 07 October 2010.

Whitson, D. (1997). “Applying just-in-time systems in health care.” IIE Solutions, 29(8), 32 –