Benefits of a hospital two-bin kanban system

Abstract

Managing the distribution of medical supplies to clinical units within a hospital is a key component of a hospital’s administrative costs. In an attempt to control costs, Walter Reed National Military Medical Center (WRNMMC) installed a two-bin kanban system across multiple departments. In this thesis, we analyze the effectiveness of the kanban system from two viewpoints: organizational benefits—defined as the process of organizing the supply-chain into the two-bin kanban system—and inventory benefit—defined as the effects of staging the resupply in a two-bin fashion. We analyze two years of data, across twelve departments, comprising almost 375,000 items ordered. The results show significant organizational benefits to the hospital overall, and a steady-state in inventory costs. The data did not show consistent results across individual departments, with departments experiencing increases, decreases, and steady-states for both benefits. Additionally, we note that there is further room for WRNMMC to exploit the kanban system's ability to optimize inventory sizes via the two-bin kanban process.