Transcript supply chain

Implementing Vendor Owner
Inventory Through Point of
Use Automation
William Mosser, CMRP
KTM Consulting, LLC
Key Discussion Points
• IDN Background
• Need for Change
• Perioperative Services Project
• Old Disconnected Supply Chain
• New Integrated Supply Chain
• Methodology & Toolkit for Success
Takeaways
• Project Approach and Decision Milestones:
• Integration of Clinical Process and Supply Chain
• Infrastructure Development
• Traditional Procurement Cycle Replacement
• Link to Charge Master and Revenue Cycle
• ‘How to Guide’ including Methodology for Success
• Tools for Monitoring Progress
Urban University Based IDN
•
•
•
•
•
•
4 Hospital IDN (non-profit) in Northeast
– Academic Medical Center (671 beds)
– Community Acute Care Hospital (197 beds)
– Urban Low Acuity (135 beds)
– Behavioral Health Hospital (136 beds) with ED & 24 med/surg beds
$150 million spend in Supplies & Pharmaceuticals/$1 billion revenue
245,000 ED visits; 62,000 inpatient discharges; 480,000 outpatient visits;
and 6,100 births.
63% of Admissions are from Emergency Room
CMI at 1.63/1.11
Payer Mix of 45% Medical Assistance; 36% Medicare; 19% Private Payers
Academic Center Operating Room
•
•
•
•
•
•
•
•
•
•
•
•
11,000 surgical cases
17 operating rooms
55/45 Outpatient to Inpatient
Many services, low volume per type of case
33% cases started late
25% cases add-ons to the schedule
15% cases cancelled due to resource shortages
4 storage locations within operating room walls
Just in Case Order Model
$4.1 million inventory (Periodic)
$20 million annual spend
12% Consigned Inventory
–
–
–
Heart Valves
Some hardware
VADs
Case for Change
Operating Room Inventory Trends
2002-2008
Case load relatively flat
Service Design, Management
and Improvement Model
PLAN/CONTROL
•
•
•
•
•
Design concept
Develop business plan
Verify alignment
Establish design team
Monitor Control Plan
DESIGN
IMPROVE
•
•
•
•
•
•
•
Implement best solution
Monitor results
Anchor and disseminate improvements
Review program/service outcomes
Evaluate best practices
Review technological advances
Identify additional improvement opportunities
ASSESS
•
•
•
•
Identify special cause conditions
Analyze cause
Identify potential solutions
Select best solution
•
•
•
•
•
•
Identify requirements & validate project
Create design to meet requirements
Validate continuance
Define measures
Pilot or test design
Implement
MEASURE
• Monitor process performance
• Identify out of control conditions
OR Supply Chain
Starts Here
Rx Manufacturer
Supplies Utilized @ POC
Rx Distributor
M/S Manufacturers
LUOM Delivery
Bulk Delivery
M/S Distributor
Manual Receiving
Warehouse
Manual Receiving
Storeroom
Stock Picked
Supply Cart/Closet
PPI Manufacturer
Data Keyed into MMIS
Specialty Manufacturer
Specialty Distributors
Vendor Order Entry
Replenishment
Processed
Perioperative Clinicians View of the ‘supply chain ‘
Linen &
Laundry
EVS
P&T
Committee
Pharmacy
Central
Supply
Rx
Distributor
VATs
Med-Surg
Distributor
Contracting
Central
Receiving
Purchasing
Accounting
Medical
Storeroom
Vendors
Dietary
Facilities
Capital
Project
Management
IT
End User Issues








Clinical Resources
Confused/Too Involved
Multiple Storerooms
Lack of Trust created
redundancy
Direct from Vendor
Philosophy
Who handles my stat
needs?
Who to call for pickup &
delivery?
Where can I store my
equipment?
Who do I call for Service?
Supply Variety
•
•
•
•
•
•
Too many varieties
Too many vendors
Direct access to Surgeons
created unapproved orders
Different prices at each
hospital
Stock versus Non-stock
ordering confusion
Training on new products
was lacking
Logistics Maze






Clinical Resources
Confused/Too Involved
Finding someone’s order
Transferring supplies to
another facility
Tracking Deliveries from
Outside
Who to call to resolve
problems?
Waiting for return calls
Internal Delivery Services




Who delivers what?
When do they deliver?
How long till next delivery
occurs?
Bottom Line: We have
redundant delivery staff
services that few understand
Data Issues






Redundant, manually
maintained item master
Inaccurate or incomplete
pricing
Resource Maps not
maintained
Multiple systems without
interfaces
‘Bill Only Pos’ prevalent in
free form text format
Redundancy for Revenue
Cycle, Implant Tracking, and
Patient Records
Perioperative Improvement
Opportunities








Supply Cost per Case twice national benchmark
Block Scheduling not monitored effectively
Outpatient volume at differs significantly from inpatient volume in
complexity, length of case and PACU stay.
Staffing begins at 7 AM, cases not scheduled to begin until 8 AM.
Average length of procedure is significantly longer than nationally
accepted benchmarks for comparable facilities.
Resource maps incomplete and outdated
Overtime percentage in Perioperative Services was 12% compared to
Benchmark of 2% based on AORN and comparable facility benchmarks.
PACU shows significant issues with length of stay and patient throughput
traceable to areas beyond Perioperative services
16
Strategic Vision & Plan
What’s Needed to Succeed?
•
•
•
•
Strategic Vision & Plan
Clinical Buy-in/Executive Support
Focused Teams with Common Goals
Clean and Controlled Formulary or Catalog
• Electronic Product ID/Data Standards
• Comparative Analysis
• Common Distribution Channel
• Best Practice Partners
• Technology Plan
• Point-of-Use Technology
• Electronic Product ID
• Integration Engine
Value Proposition
• Build Framework for Perioperative Services to gain control over:
•
•
•
•
•
•
•
Non-Wage Data Integrity
Inventory
Product Management
Supply Distribution & Logistics Efficiencies
Contract & Pricing Management
Procurement Cycle
Point of Use Inventory Utilization
• Implement Tools and Process Improvements to drive and sustain
savings
• Complement or replace existing Business and Technology
investments
• Establish a best practice supply distribution model that aligns the
expense more closely to the time of use
• Monitor & track progress on an on-going basis
Vision
To create a Business Model that will allow access to
data across the entire supply chain from point of
manufacture to point of use, thus creating a seamless
flow of product, information and cash that will have
products available at point of use when required,
through multiple delivery channels, at the lowest cost.
2
Automotive Model
Customer
Order
Production Schedule
Bill of Material
}
ERP
Assembly Parts List
Operating Room Model
Surgical Case
OR Schedule
Resource Map
}
ORIT
Case Pick List
Planned Supply Chain
Central Warehouse & Supply
Distribution Partners
Low Unit of
Measure
Electronically
Received
Authorized
Distributor / Mfg.
Utilization
Reports
Healthcore South Contract Compliance
$8,000,000
.com
engine
Actual
$7,000,000
Commitment
Last Year Actual
$6,000,000
$5,000,000
$4,000,000
HIS/Billing
Supplies
Delivered
To Floor
$3,000,000
$2,000,000
EDI/XML
Phone/Fax
$1,000,000
$-
Healthcore South
EDI/XML
Lubbuck Mercy
Clovis Regional
Hereford Clinic
Borger Clinic
Plainview Sub-Acute
POU Station or
Patient
Data Collection
MMIS/ERP
7
Starts Here
Process Design Teams
•
•
•
•
•
•
•
•
•
•
Governance Oversight
Product Management
Data Management
IT
Logistics & Distribution
Procurement Cycle
Revenue Cycle
Patient Record
Accounting & Controls
Project Management
• Executive Management
• Physician Leadership
• MMIS Team with Vendor
Support
• CIO, IT & Super Users
• Vendor Support
• Purch/Rec/AP
• Pat Accounting/CDM
• HIS
• Finance & Internal Audit
• Supply Chain & OI
Process Design Rules
• Stuff is Stuff
• Common approach for All
Items
• Minimal Clinical Staff
Involvement
• Common Data/Multiple
Technologies
• Align and Integrate Data
• Patient Record/Implant
Record
• Product Tracking
• Revenue Cycle
• Performance Tracking
• Cost per Unit of Service
• Perpetual Inventory
• Capture item use at Point of
Care
• Delivery to Point of Use
• Pay for what you use
• Manage what you need
• Track Cost per Episode of
Care
• Decision Support Information
Primary Design Components
• Team Building & Project
Management
• Master Data Cleansing
• Resource Map Improvement
and Management Process
• IT Systems Upgrade &
Integration
• Case Specific Logistics
redesign
• Inventory Logistics Redesign
• POU Automation
Implementation
• Surgeon Driven Comparative
Analysis
• Vendor Partner Selection
• Item Contract Expansion
• Consignment Negotiations
• Procurement Redesign
• Revenue Cycle Optimization
• EMR Development
• Metrics Tracking
• End User Training and
Compliance Monitoring
Perioperative Supply/Equipment/Instrument
Progress
Metrics
Phase
•Cost Per Case by
Specialty & by
Physician
•Schedule Compliance
•Late
•Add-ons
Case
•Cancelled
•# Minutes in PACU
•Fill Rates
•QA Check Compliance
•???
Inventory
Spend
Down
*
Storage
Redesign
Staff
Performance
Development
*
*
Patient
Demand
Matching
Vendor
Consolidation
*
CDM Data
Synchronizatio
n
*
Team
Building
*
Instrument
Management
Picking
Redesign
*
Common
Catalog
*
*
*
Value
Analysis
Cost per
UOS
*
II
QA
Controls
Inventory
Controls &
Reporting
KPIs &
OR IT
*
Systems
*
Preference
Card
Management
III
POU
Instrument
Tracking &
Integration
Utilization
Mgmt
Case
Vendor
Control
Automated
Procurement
Cycle
Product
Standardization
ECommerce
Logistics
Redesign
IV
Wall to
Wall
Inventory
Cart
•Excessive
turnaround
Policies &
Procedures
V
Integrated
Perioperative
Supply
Chain
Vendor
Demand
Owned
Pull
Inventory
Inventory
OR Schedule
Alignment
I
Contract
Instrument
Compliance
Mgmt
*
Project
Organization
&
Controls
*
Principles
Of
Procurement
*
Order
Management
Methodology & Tools
(Project Management Culture)
Roll-Out Plan
Design
•
Service/Support Infrastructure Development
–
What, Where, Who
•
Values & Guiding Principles
•
Project Management Strategy
•
Mission/Vision/Charter
•
Communications Mechanisms & Audiences
Measure
•
Identify Current Performance Levels (Cost & Service)
–
Customer Satisfaction Survey
–
KPIs
–
Cost per Workload Unit
–
Solucient Total Cost
–
Supply Breakdown Wait Times or Cancellations
•
Process Flow development
Assess
•
Assess Current Reporting
•
Common Data & Systems Management Strategy Review
•
Operational & Functional Assessments – Gap Analysis
•
Define Common Data Warehouse with Interfaces to/From
Existing Systems?.
•
E-procurement & Global Catalog approach.
•
Decision Support Resource Availability
•
Pilot Solutions
Improve
•
Study Pilot outcomes
•
Optimize LUM Delivery
•
Optimize Freight Management & Direct Purchasing
•
Optimize E-procurement & Global Catalog approach.
•
Monitor GI Lab Support Standards
–
Sourcing & Contracting
–
Inventory Management
–
Integrated Procurement
–
Logistics & Delivery Services
–
determine Targets & Develop Action Plans
–
PI Initiatives?
•
Insure Commitment of Resources
–
staffing & matrix management organization
structure
–
capability development
–
Systems & support infrastructure
Plan/Control
•
Change Management Process & Plan
•
Implement system wide policies & procedures
•
Monitor Performance
•
Problem Management Resolution
•
Perform Ongoing Measurement
–
Customer Satisfaction Survey
–
KPIs
–
Cost per Workload Unit
–
Solucient Total Cost
–
Supply Breakdown Wait Times or Cancellations
Project Charter
University Health
IMPROVEMENT TEAM
Charter
Date:
Scope of Opportunity:
Boundaries:
Project Name:
Hospital(s) Name:
Desired Outcomes / Benefits Matrix:
Opportunity Statement:
Anticipated Deliverables: List
Executive Sponsor(s):
Predicted Impact:
 Opportunity for Improvement
 Solve a Known Problem/Process
 Evaluate Stability of Process/Problem  Revenue Enhancement
 Other:
 Expense Reduction
Contributions to Temple University Health System-wide Goals:
Anticipated Date Project Will be Completed:
Process/Outcome can be described as:  High Risk  High Volume  Problem Prone
Area(s) (potentially) Impacted:
 Quality of Care
 Liability/Risk
 Ethical Impact
 Patient Safety
 Safety
Functions:
 Ethics, Rights and Responsibilities (RI)
 Provision of Care (PC)
 Medication Management (MM)
 Improving Organization Performance (PI)
 Leadership (LD)
 Management of Environment of Care (EC)
Priority Focused Areas:
 Assessment and Care/Services
 Communication
 Credentialed Practitioners
 Equipment Use
 Infection Control
 Information Management
 Medication Management
 Organizational Structure
Team Membership
 Customer Satisfaction (internal or external)
 Regulatory Compliance
 Public Relations
 Cost of Care
 Financial Impact
 Other
 Management of Human Resources (HR)
 Management of Information (IM)
 Surveillance, Prevention, and Control of Infection (IC)
 Medical Staff (MS)
 Nursing (NR)
 Not Applicable (NA)
 Orientation & Training
 Patient Safety
 Physical Environment
 Quality Improvement Expertise/Activities
 Rights & Ethics
 Staffing
 Other
Members
Department/Title
Leader
Facilitator
Approval for Team:
Executive Sponsor(s):
______________________Date:______________
Executive Sponsor(s):
_____________________ Date:______________
*Committee(s):
______________________ Date:______________
______________________ Date:______________
* (State the specific committee(s) if applicable)
Statement Of Work
Version 1.0
Updated
Statements of Work
3/10/2009
STATEMENT OF WORK (S.O.W.)
PROJECT IDENTIFICATION
Project Name
Customer Name
OUT OF SCOPE
RESOURCES REQUIRED
Project Number
MILESTONES
INTRODUCTION
ANCIAL IMPACT
Comparison Analysis
DESCRIPTION OF PRODUCT(S) OR SERVICE(S) TO BE DELIVERED
Customer Requirements
Characteristics of Project Deliverables (e.g. Technical, Functional etc.)
PERFORMANCE METRICS
Evaluation Expectations
Scorecards
Quarterly Business Review
OUT OF SCOPE
RESOURCES REQUIRED
MILESTONES
Signature of Sponsor
Signature of project manager
Name:
Date:
Name:
Date:
Signature:
Signature:
Master Plan
First Phase
Month
Task ID
9/1/
Project Tasks
1) Development of Supply Distribution FTE Impact Plan
- meetings and strategy sessions with HR
- meetings and planning sessions with supervisory staff
2) Analysis and review of proposal and Impact Plan
3) Continued evaluation and meetings for Data Cleansing
4) Contract review and finalization of agreement for
LUM & POU
5) Review of first pass contractual agreement
- modifications and changes
- review of first pass revisions from legal
and project staff; review and negotiations
6) Confirm POU internal cost component in financials
Milestone
Conclusion
Page 1
9/15
10/1
10/15/
11/1/
11/15
12/1
12/15
12/31
Master Plan
First Phase
Month
Task ID
9/1
Project Tasks
7) Second pass reviews of Agreement
- modifications and changes
- second pass, tertiary revisions by legal
- review of modifications
- final negotiations of terms and conditions
- final legal and commercial review of terms and conditions
- contract acceptance and signoff
8) Review and analysis of revised financials
- discussions and negotiations on cost savings and
incentives
- development of clinical risk sharing models and metrics
- development of internal financial process controls
- final review and incorporation of financial deliverables
into agreement
9) Review and analysis of implementation plans
- meetings on plan tasks and rollout
- development of plan for best optimal fit
- plan review/revisions based on operational strategy
- plan acceptance
Milestone
Conclusion
Page 2
9/15
10/1/
10/15/
11/1
11/15
12/1
12/15/
12/31
Master Plan
First Phase
Month
Task ID
9/1
Project Tasks
10) Development of first phase communication plan for
staff/network presentation
- presentations as may be required
11) Initial organizational meetings on implementation team
makeup and responsibilities
13) Finalization acceptance/timing/rejection of
divisional/service offerings with planned integration
14) First phase complete/contract signing
Milestone
Conclusion
Page 3
9/15
10/1
10/15
11/1
11/15
12/1
12/15
12/31
Implementation Timeline
QTR 1
Scope &
Baselines
Established
Meet &
Assess
Data Cleansing
& Management
QTR 2
Charter &
Plan
Define &
Assess
Baselines
Completed
Data
Cleansing
QTR 4
QTR 3
Ongoing Project Management
New Item
Controls
Follow-Up
Distribution
Optimization
Define &
Measure
Inventory
Leveling
Control Plan
Follow-Up
LUM Delivery LUM
Optimization
Define &
Measure
Inventory
Leveling
Control Plan
Follow-Up
Technology
Optimization
POU in all areas
Inventory and
Procurement
Optimization
Plan
Analysis &
Define Processes
Plan
Analysis &
Define Process
Define &
Measure
Implementation
Planning & Prep
Follow-Up
Implementation & Follow-Up
Analyze & Implement
Lessons Learned
Observations
•
Every entity will NOT be in the same place at the same
time. Customize your approach and use the right tools
and process for each depending on their level of maturity
in Performance Excellence.
•
Never underestimate the power of modeling, coaching,
and mentoring.
•
Balance focus on Improvement Initiatives while still
keeping eye-on-the-ball on routine operational & financial
management. If you’re successful at one, but not the
other, you’re not optimizing.
•
To achieve Long Term Success, balance focus on
Operational & Clinical Improvement with Strategies for
Growth.
Observations
•
Engage CEOs and Senior Teams in the DESIGN of the
process to ensure effective engagement and support of OI
projects.
•
Project Management models are not necessarily “natural”
to Clinical Staff, Finance Teams/ CFOs… They must
become comfortable in working with you to understand
and monitor financial results
•
Invest in your people around tools and methodologies
early enough to ensure they could maintain savings and
run projects. Ensure this investment doesn’t wobble
Observations
•
Monitor partnership commitments consistently to
quantify value and maturity of your processes and
approach.
•
Integrate Supply Chain with Revenue Cycle/Clinical
Quality Projects more seamlessly with traditional
operational projects to ensure commonality of process /
approach / and ownership.
•
Ensure external participants understand that there are
multiple stakeholders / customers in the process.
•
Measure, Measure, Measure
“If you can’t measure it, you can’t control it, and
you can’t improve it.” - Jack Welch – Former CEO GE
ANY QUESTIONS??