Hôtel-Dieu de Lévis Hospital on the outskirts of Quebec City, Canada, mandated Logi-D to conduct a supply chain analysis and build a business case for its optimization. This teaching and research hospital offers general and specialized care.

The supply chain process costs for nursing units and the operating room were estimated at more than $1.6 million annually. It was calculated that the following gains could be generated by implementing the leading practices recommended by Logi-D:

• Annual recurrent replenishment process productivity gains: over $360,000
• Reduction in nursing personnel movements and the time spent looking for supplies in storage areas: more than $280,000 annually
• Reduction in supply costs due to a decrease in inventory shrinkage: close to $330,000 annually
• One-time inventory reduction savings: close to $1.5 million

The investment required to automate the supply chain through the implementation of the leading practices identified, including the establishment of an off-site warehouse, was estimated at just over $2.9 million.

Non-salary savings alone would allow for a payback period of less than four years, and productivity gains of more than $600,000 annually would be realized upon completion of the project. Proportionally, the results of this analysis are representative of the potential gains identified in all of the business case development projects led by the Logi-D consulting group.