Healing Mexico's Health-Care System

Enrique Ruelas
Carlos Niezen
Ricardo Arce

Improving supply chain efficiency is a common business strategy that can give an impressive boost to the bottom line. But when the Mexican government recently used supply chain tactics to improve its health-care system, the benefits stretched beyond profit-and-loss statements; they affected the wellbeing of the country’s nearly 24 million citizens.

In 2002, the government began working with A.T. Kearney to improve its faltering health-care system. The overall approach involved immediately shoring up the system’s foundation and building a stronger infrastructure. There were short-term fixes, such as improving procurement processes, inventory, demand planning and regulation. And there were long-term solutions, such as a total restructuring of the medicine supply chain. The Ministry of Health also introduced a series of change-management initiatives to encourage a system-wide attitude adjustment.

Already, the country is earning high marks for its innovative approach. In less than two years, the government improved its supply chain service levels—defined by the number of patients who received full prescriptions—from 70 percent to more than 90 percent, while reducing drug unit costs by 5 to 10 percent.