Evaluating the strategic roles of reverse logistics in private hospitals: case studies in Thailand

This thesis is a study of reverse logistics structures, processes and their characteristics in Thai private hospitals. The research evaluates the strategic importance and role of reverse logistics operations in creating business value in hospitals. The research literature suggests that the adoption of reverse logistics, specifically reverse logistics activities, can result, through the adoption of an RL strategy, in added business value. The intent in this research is to use the activities of Reverse Logistics (re-use, re-sale, re-distribution, repair, refurbishing, remanufacturing, retrieval, recycling and incineration) to examine how these activities are used strategically in hospitals in Thailand to create business value for these organisations. The research addresses the question: “What strategic roles does the implementation of reverse logistics activities play in private hospitals in Thailand?”. The research is grounded in a theoretical model that argues that an overall, front-stage, strategy drives organisations business goals and that this is supported by a ‘back-stage or hidden strategy that focuses on the operations of that organisation and that both are necessary for strategic success and the attainment of competitive advantage. In this research part of that back-stage strategy is the operationalization of reverse logistics activities and that these both support the overall company strategy and themselves create business value. The overall context of the research is an interpretivist multiple-case study based on interviews with key stakeholders and a focus group with relevant industry experience. The population and sample for this research includes three significant private hospitals in Bangkok (Bangkok Pattaya Hospital, Vejthani Hospital and Bumrungrad Hospital) as case studies.

The research shows that reverse logistics activities in each of 4 similar departments in the three Thai private hospitals results in the creation of business value for each hospital. The research shows that the strategy of Bumrungrad, Vejthani, and Bangkok Pattaya Hospitals are relevant to their vision and mission focusing on customer satisfaction and the customer as the core business. This strategy, it is argued in the thesis, can be seen as a ‘front strategy’ or ‘obvious strategy’ resulting from the hospitals wanting to provide excellent medical services to people who will then be return customers. The front stage relates to the development of an image as a high quality provider of medical services. The research also argues there is a ‘back stage’ used to support the creation of that image, a strategy built on implementation of a supply chain strategy that becomes an integral part of hospital policy. The research shows that whilst much existing research literature supports a view that adopting reverse logistics, specifically reverse logistics activities in hospitals, can result in added business value, this research confirms that view but it questions the simplicity of the relationship proposed in the extant literature. This research demonstrates the complexity of the RL activities used in each hospital and the associated complexity of types of business value created. These complex relationships (between RL and business value) are all happening simultaneously. The strategy is not a simple one, but the research confirms the importance of strategy in healthcare operations. The research also shows that the back stage strategy of operations, the adoption of supply chain strategy and subsequent adoption of reverse logistics activities, re-enforces the intent and direction of the front stage focus of each hospital in terms of their ‘image’. The research shows that reverse logistics strategy in the Thai hospitals was driven by the need to save costs, use resources efficiently and maintain business plans that delivered high quality health services at high prices. The high level of competition in the Thai hospitals, however, is based on their image and reputations but the research also shows that where these hospitals get their competitive advantage is by focusing heavily on customers' wants and needs through operational efficiency and cost management, delivered through effective supply chain operations, specifically, through their adoption and use of reverse logistics.