OPEX Cost Optimization

Operational Excellence Success Story

OPEX Cost Optimization

Client Overview

  • Client Name: Multi-Specialty Hospital – Number of Beds: 500+
  • Industry: Healthcare
  • Location: UAE

Challenge

In a healthcare facility, maintaining medical equipment to ensure readiness and availability for treatment according to both international and local standards is a fundamental requirement. However, the costs associated with medical equipment maintenance and management have become increasingly significant. Healthcare providers face the challenge of optimizing these expenses while ensuring that the quality of patient services and treatments remains uncompromised. Balancing the need for high-quality care with cost efficiency presents a critical issue for the industry.

Solution Provided

Service/Consulting Provided: Our consulting service
focused on medical equipment maintenance & management
based on the following key aspects:

Implementation Details

Biomedical staff development

  • Reviewed Biomed staff count, their expertise and distribution.
  • Developed a plan for technical & soft skills training.
  • Provided required test equipment and tools.
  • Established KPIs for staff performance evaluation.
  • Reviewed available SOPs and workflows, added new and updated old SOPs.

Equipment Utilization

  • Reviewed asset distribution among the different hospital departments
  • Identified the number of assets and operating hours,
  • Based on the collected information identified the asset utilization and relevance of keeping assets in the same department or move it to another one, or even remove it from service.

Effective contracts negotiation

  • Identified assets to be contracted.
  • Defined the scope of work, considering the inhouse biomed team experience/capabilities.
  • Compare offered contract prices with similar assets under contract.
  • Evaluate cost of ownership over the asset life cycle.
  • Set KPIs for the contractor performance monitoring.

New Equipment selection criteria

  • Reviewed new assets selection criteria,
  • Included criteria for asset’s technical evaluation & cost of ownership.
  • Added new criteria relevant to sustainability and environmental aspects.

Digital transformation

  • Improved processes resulted in smooth workflow.
  • Reduced manual activities for obtaining a time efficient operation.
  • Established KPIs for monitoring relevant operation segments.
  • Implemented Business Intelligent tools.

Diversify Spare parts outsourcing

  • Acquire quotations for OEM spare parts from different reliable resources.
  • Implemented intelligent spare parts management.

Results & Outcomes

Cost Optimization
  • Staff development and redistribution: Saved amount/Year 28%
  • Staff Count
  • Staff Cost

Figure 1: Staff development and redistribution Impact

Cost Optimization
  • Maintenance contracts proper scope definition and negotiation resulted in a cost decrease of 28%

Service Contracts

Figure 3: Maintenance Contract Impact

Cost Optimization
  • Diversity of procurement sources for spare parts, material, test equipment and others yield in a yearly cost decrease of 24%

Spare Parts, Material Costs, Test Equipment, and other OP Cost

Figure 2: Diversity of procurement sources Impact

Cost Optimization
  • An overall cost optimization of 27% achieved after one year of implementing the cost optimization plan

Figure 4: Overall OPEX Optimization

Key Takeaways

  • Effective maintenance and management of medical equipment are crucial for ensuring a smooth daily workflow and timely patient treatment.
    Implementing a robust management system is essential for optimizing service provision and reducing costs.
  • Diversifying sources for spare parts and material procurement has led to a 24% decrease in annual spare parts costs.
  • The establishment of proper standard operating procedures (SOPs) and the strategic redistribution and development of staff, along with targeted training, have enhanced the productivity of engineers and technicians.This approach has contributed to a significant reduction of 28% in the annual manpower budget for contracted equipment.
  • Careful scoping and negotiation of contracts have resulted in a 28% reduction in the annual budget allocated for contractual agreements.

Conclusion

In conclusion aligning all the key factors and implementing effective equipment distribution across hospitals and clinics, has led to a substantial overall cost optimization of 27%. Furthermore, maintaining records of equipment utilization, ensuring proper distribution, and establishing suitable criteria for new equipment selection have equipped the client with essential tools for making informed decisions, ultimately helping them avoid unnecessary investments in capital equipment.

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