Blood banks could cut transport costs by 10% without slowing hospital deliveries

Summary

• In both the Netherlands and Finland, alternative distribution networks reduced blood-transport costs by about 10% without making hospital deliveries slower or less reliable.

  
  

• Some of the tested networks needed fewer distribution centres while still meeting the same delivery-time requirements, indicating that lower operating costs do not necessarily mean reduced service levels.

  
  

• The model combines hospital locations, blood demand and actual road travel times to show where distribution centres can be placed while keeping time-sensitive blood supplies within reach of hospitals.

Why does the location of blood distribution centres matter?

Hospitals keep limited stocks of red blood cells, platelets and other blood products because these products cannot be stored indefinitely. When demand changes, or an urgent transfusion is needed, hospitals depend on rapid resupply.

Too few distribution centres can increase travel time. Too many can raise operating costs. Their location therefore affects both the reliability and cost of the supply network.

Why is this a prescriptive analytics problem?

The decision is where distribution centres should be located and how many are needed. A good network must keep emergency deliveries within an acceptable time while avoiding unnecessary transport and facility costs.

Prescriptive analytics makes that trade-off explicit by comparing alternative network designs against both objectives rather than optimising cost or speed in isolation.

How did the collaboration test different network designs?

Researchers from Sanquin (The Dutch Blood Bank), the Finnish Red Cross Blood Service and Amsterdam Business School developed a mathematical location model using hospital locations, typical demand and realistic road travel times.

They tested the model in the Netherlands and Finland, two health systems with very different geography and hospital density. The model allowed planners to place more weight on transport cost, delivery time or a balance between the two.

What did the findings show?

In both countries, the model identified distribution networks that reduced transport costs by about 10% without slowing or reducing reliability of deliveries. In some cases, the same delivery targets could be maintained with fewer distribution centres, creating potential savings in both transport and facility operation.

For patients who need blood during surgery, cancer treatment, childbirth complications or trauma care, this development allows for continued timely access. The team showed that lower logistics costs do not necessarily require a reduction in delivery performance.

How can the findings inform other applications?

The model can be adapted to blood services in other geographies by starting with basic inputs such as hospital locations and travel times, especially since the research code is openly available.

The same type of location decision can also appear in other time-sensitive health supply chains, including laboratories, medicine distribution and emergency stock placement. Future developments could investigate how to also account for local constraints such as road reliability, facility capacity, and regional demand patterns.