Bridging the last-mile gap: How to reduce costs in healthcare logistics?

While the aim is to improve the quality of healthcare all around the globe, different logistical challenges arise. In the coming years, the healthcare supply chain will develop towards more efficient healthcare logistics by lowering inventory levels throughout the chain. The aim is to reduce hospital costs, improve access to medicine and free up budget for other healthcare activities.

Traditionally, healthcare organisations have a large amount of medical goods in their lab inventory with most facilities purchasing medical supplies in bulk. This keeps the total number of deliveries low, reducing transport and order costs. In this way, medical facilities always have their medicine, vaccines and blood products readily stored for emergency cases. 

Inventory challenges

However, this comes at a cost. A high cost that involves keeping inventory at sufficient levels. Every year approximately $10 billion worth of medication is thrown away due to fast approaching expiry dates. This urge to focus on keeping distribution costs of medical goods low by reducing the number of transports needed, causes the need for a higher level of inventory that is partly wasted if not used. This phenomena exists because the use of specific medical goods heavily fluctuates, and yet still needs to be available at all times.

To overcome such waste, many specific medical goods and blood products could be stored at central hospitals. In the past years, research has been done on new supply chain models for the healthcare industry. Linking central hospitals to regional and local healthcare facilities is key to centralised storage of medical goods.

Logistical challenges

Traffic jams and bad infrastructure cause delays and limit the much needed access to quality healthcare products that are stored in centralised locations. As more and more specialised medical goods are stored in central (academic) hospitals and more people need to be taken care of at home, a logistical challenge arises. 

Reducing inventory can be a solution to reducing waste and therefore improving healthcare in both developed and developing regions. However, for that to work a physical distance between central hospitals and (non-urban) clinics needs to be overcome, with on-demand transport of single specialised medical goods. 

Drones as a solution

The current means of transporting medical goods to clinics is overwhelmingly done by road. This can pose a problem for both developing and developed countries when congested roads create gridlock and infrastructure becomes limited due to natural disasters. Moreover, because storing medicine can be costly, medical goods are kept in central hospitals, making access to medicine and vaccinations extremely difficult for rural communities.

While healthcare demand is peaking around the globe, a lean approach to healthcare is critical. Drones can help contribute to the solution by helping to overcome medical inventory waste, and increasing access to specialised and emergency healthcare by providing medical goods on-demand to non-urban clinics. While healthcare demand is peaking around the globe, a lean approach to healthcare is critical.