Health logistics in New Zealand: research driving efficiency and excellence

Health logistics is an essential component of the healthcare system, involving the effective demand management of medical products, services, and information via planning, implementation, and control of the goods movement and storage (WHO, 2024). As New Zealand moves forward, health logistics will become increasingly important. This notion is particularly supported by the Government Policy Statement on Health in enhancing the provision of healthcare services with five priorities: access, timeliness, quality, workforce, and infrastructure (Ministry of Health – Manatū Hauora, 2024). Health logistics management is also topical, as it addresses medical demand with inventory preparation to ensure efficiency and cost-effectiveness, and tackles supply chain disruptions stemming from trade wars and tariffs.

Implementation of health logistics research can enhance healthcare service delivery. By conducting process analysis, studies identify disconnections and inefficiencies along the health supply chain and thereby develop strategies to streamline the operations. For example, DHL has conducted studies of logistics processes, partners and operations in its freight services for pharmaceutical products.  Ensuring the timely and efficient delivery of health supplies such as drugs, supplements, and equipment is particularly vital for New Zealand with its geographical position on global freight lines increasing sourcing costs and lead time. Optimising logistics can promote accessibility and resource availability for healthcare service providers, patients, and other stakeholders.

In regards to ensuring cost-effectiveness, New Zealand's healthcare system operates with a categorised budget system similar to many other countries (e.g., the application of Diagnosis-Related Groups - DRG).  Under the constraints of DRG budget classifications achieving efficiency is crucial to provide diagnosis and treatments for patients in time and avoiding waste of perishable medical products. Implementing principles and technologies from health logistics research helps predict the demand for medical supplies and services, provides hospital information systems with the capability of supply chain management for transparency, thereby enhancing planning and allocation of resources (Saha and Rathore, 2024). This not only helps reduce waste but also effectively manage costs. For example, predictive analytics and Artificial Intelligence assisted decision-making can optimise the use of laboratory consumables in the hospital by linking urgent care diagnosis to electronic health records (EHR) and laboratory resources (Wang et al, 2022). Likewise, well-forecasted vaccine demands during flu seasons or demands from other infectious diseases can improve the availability of inventory for vaccines, drugs, testing kits, etc., and avoid over-purchasing. Further, efficient logistics can also lower operational costs by optimising cold chain capacities and minimising inventory holding costs (Jackson, et al, 2024).

Recent economic dynamics, including trade wars and tariffs, have kindled fires on the global supply chain (e.g., reports on Newswire: Tariffs disrupt U.S. Healthcare Costs) , which will continue to impact New Zealand's health sector after the COVID-19 pandemic (Suda et al, 2022). Tariffs and trade wars creates uncertainty for imported medical supplies and materials, potentially adding to the overall expenditure on healthcare services and domestic health supplement production. These trade barriers can also create temporary or long-term shortages of quality medical supplies. Health logistics research informs enacting strategies to mitigate these challenges. This includes work capacity planning, diversified sourcing, better procurement agreements, and development of contingency plans to ensure continuous supplies in a public health context.

Health logistics is multidisciplinary in nature, and its research creates synergies in innovation and collaboration across various fields. By bringing together practitioners and academics from the medical, logistics, manufacturing, and technology fields, research projects can drive the development of new solutions and technologies. Integrating advanced technologies such as artificial intelligence (AI), for example, is perceived as beneficial by health professionals, and it can facilitate the decision-making of consumption and replenishment of medical items (Jackson et al, 2024, & Sharma et al, 2025). With technology rapidly changing, collaborative research can also establish best practices and future protocols, benefiting the entire healthcare system.

In sum, continuing research in health logistics can enhance the delivery of healthcare services, achieve efficiency and cost-effectiveness, and enable the system to cope with the challenges brought by trade wars and tariffs. Additionally, bringing multidisciplinary collaboration can jointly set the standards and protocols for the adoption of new technologies and solutions. As New Zealand aims to promote industrial activities, improve our population health, and lead in innovation, investment in health logistics and supply chain research is essential for achieving these goals.  

 References

Jackson, I., Namdar, J., Saénz, M.J., Elmquist III, R. A., & Dávila Novoa, L. R (2024). Revolutionize cold chain: an AI/ML driven approach to overcome capacity shortages. International Journal of Production Research, 63(6),
2190–2212.

Minister of Health. (2024). Government Policy Statement on Health 2024 – 2027. Wellington: Ministry of Health.

Sharma, A., Kumar Sharma, B., & Bhatt, V. (2025). Artificial intelligence in healthcare logistics – moderating role of industry pressure and organisational readiness. Journal of Decision Systems, 34(1).

Saha, E. and Rathore, P. (2024) The impact of healthcare 4.0 technologies on healthcare supply chain performance: Extending the organizational information processing theory, Technological Forecasting and Social Change, Vol. 201, 123256.

Suda KJ., Kim, KC, Hernandez I, Gellad, WF, Rothenberger, S, Campbell, A, Malliart, L, Tadrous, M (2022) The global impact of COVID-19 on drug purchases: A cross-sectional time series analysis, Journal of the American Pharmacists Association, Vol 62, Issue 3, P 766-774.

Wang, WYC, Jiang, PHW, Tiong GT, and Hsieh, CC. (2022) Gauging the Gaps for Decision Support - Data Integration in the Hospital Information Systems with Machine Learning. In Proceedings of the 6th International Conference on Medical and Health Informatics (ICMHI '22). Association for Computing Machinery, New York, NY, USA, 43–47.

World Health Organisation. (2024). Digital transformation handbook for health supply chain architecture, Geneva, SMART Guidelines collection.

Dr William Wang is Associate Professor of Digital Business and Supply Chain Management at The University of Waikato, and an External Member of the Centre for Supply Chain Management at the University of Auckland Business School.  He can be contacted at william.wang@waikato.ac.nz.