Orlando’s Arnold Palmer Hospital, founded in 1989, specializes in treatment of women and children and is renowned for its high-quality rankings (top 10% of 2000 benchmarked hospitals), its labor and delivery volume (more than 16,000 births per year, and growing), and its neonatal intensive care unit (one of the highest survival rates in the nation). But quality medical practices and high patient satisfaction require costly inventory-some $30 million per year and thousands of SKUs. With pressure on medical care to manage and reduce costs, Arnold Palmer Hospital has turned toward controlling its inventory with just-in-time (JIT) techniques.
Within the hospital, for example, drugs are now distributed at nursing workstations via dispensing machines (almost like vending machines0 that electronically track patient usage and post the related charge to each patient. The dispensing stations are refilled each night, based on patient demand and prescriptions written by doctors.

Discussion Questions
1. What do you recommend by done when an error is found in a pack as it is opened for an operation?
2. How might the procedure for custom surgical packs described here be improved?
3. Why discussing JIT in services, the text notes that suppliers, layout, inventory, and scheduling are all used. Provide an example of each of these at Arnold Palmer Hospital.
4. When a doctor proposes a new surgical procedure, how do you recommend the SKU for a new customer pack be entered into the hospital’s supply-chain system?