What organizations have not recognized is that in order to realize improvements, the pre-requisition process must be examined. The management of the Clinical Supply Chain needs to include an examination of the processes that take place before the “Requisition to Check” process even begins. A business model for Clinical Supply Chain needs to be implemented that is a marriage of clinical practice with sound financial management. The foundation is the model is constant, collaborative dialogue between clinicians and supply chain staff.

Additionally, organizations are reviving Value Analysis Teams to aid in cost management, quality improvement, customer satisfaction and profit growth. With 60-70% of all the product purchased in an organization being clinical or clinically related, this can be a key factor in Supply Chain optimization.

Value Analysis Teams provide a systematic approach for providing, creating or researching the right functions for the millions of dollars of products, services and technologies that are necessary to operate a healthcare organization.

Stanford Hospital and Clinics, an internationally recognized healthcare organization consistently recognized as one of America’s Best Hospitals, sought to improve their Clinical Supply Chain by streamlining processes for ordering, managing, storing and distributing supplies in all locations. Stanford was able to achieve significant operational and financial improvements by building a strong business model based on an examination of the clinical processes and efficiencies in the OR Supply Chain, Central Services, Nursing and the Lab. Additionally, Stanford is actively preparing for the construction of several new facilities, including expanding space at Lucile Packard Children’s Hospital, by defining future state efficient supply chain processes in the new departments.

Prior to engaging ISH to facilitate their supply chain transformation, Nursing had control of ordering supplies within Perioperative Services. Their requests were basically “rubber stamped,” leading to excess inventory and little or no standardization of supplies. In all areas, excessive time was spent on supply chain activities. Additionally, there were operational challenges, including poor space utilization, inaccurate or missing data, lack of standardization, and inefficient utilization of the MMIS.

With the engagement of ISH, an analysis of processes within the Clinical Supply Chain was begun. Working closely with the Value Analysis Committee consisting of Clinical staff, Materials Management, departmental staff and members of Quality Assurance, current processes were examined to determine areas for operational improvements. In particular, the OR staff mapped out a strategy to customize supply chain processes in the specialty OR’s. Clinicians helped to determine what supplies were necessary given the space allotted.

In the Main Hospital, achievements included:

• Implementation of a perpetual inventory for 2,700 line items with a value of $2.85M utilizing existing McKesson PMM software. The hospital recognized the inventory as an asset and the perpetual inventory brought about a reduction in overstocks and stock-outs increasing the surgical case fill rate from 92% to 99%.
• Development and implementation of policies and procedures for new processes implemented in Surgical Materials Management, resulting in more time efficient processes within the department, and created greater surgeon satisfaction
• Establishment of new row, rack and bin system for case cart picking, The organization realized greater efficiency in pulling cases and reduced the case pick time from 23 minutes to 16 minutes.
• Identification of 600 non-moving items for an inventory reduction of $780K. The hospital recognized an appropriate increase in cash flow and a liability reduction.
• Design and implementation of a new supply usage and returns tracking process and reporting procedures, resulting in improved inventory management with the establishment of more accurate inventory maximums and reorder points.
• Working with the clinical staff, redesigned two central cores to meet supply and instrument requirements establishing new par levels and locations, providing improved clinician and physician satisfaction with the ability to locate needed supplies and/or instruments
• Design and implementation of new processes to replenish OR room stock and central cores, removing the burden from the OR staff and placing the responsibility with Materials Management, thereby creating improved clinician and physician satisfaction
• Implementation of new standards for Item Master descriptions in PMM updating over 16,000 item descriptions. With the interfaces to the Surgical Services MMIS, the ability to find items in the database was improved reducing time spent locating items.
  

For Ambulatory:

• Design and implementation of a new shelving layout for central storage area and 2 central cores for instruments and supplies, resulting in more accuracy of instrument selection, reduced time spent finding supplies, and greater clinician satisfaction
• Working with clinicians, developed basic and specialty room stock for 12 OR’s and 2 central cores. Clinicians spend less time searching for specialized materials and have more time for clinical tasks
• Moved and restocked (row, rack and bin) the Ambulatory Surgery Center in 3 days
  

• Design and implementation of new supply chain for 7 new OR’s to open in 2008
• Development of new room stock and specialty stock requirements
• Development of new case cart pick and delivery system
• Design of new Surgical Materials and Sterile Processing areas for new hospital with an additional new 12 OR’s to open in 2015
• Analysis and download of exiting preference cards, which improved the forecasting ability for needed supplies, equipment and instrumentation
• Discovery of lost preference cards for numerous procedures resulting in increased physician satisfaction
  

• Design of supply chain system for a new 8 OR Ambulatory Surgery Center which maintained the established vision of the Supply Chain process for this new facility
• Design of Sterile Processing and Surgical Materials area for supplies and instrument inventory. This reduced the required square footage resulting in lower construction costs.
• Assisted with design of new OR’s and Central Core for supply and instrument storage resulting in the improvement of the operational layout of the new OR’s while minimizing the total area needed to store supplies and instrumentation
• Development of new case cart picking process and delivery system to meet the special requirements of this facility. This process overcame the logistical issues associated with case cart delivery between two different building on the same campus, thereby saving valuable time and costs.
  

• Overcoming challenges with space utilization with creative racking, stackable bins, use of cabinets already installed in the closets, creation of bedside charts, and utilization of nursing care stations (NICU) as par locations
• Establishment of par level determinations with short term replenishment audits to assure accurate data
• Implementation of bar code scanning by Nursing for chargeable products only, with incentives for compliance
• Replenishment levels were established, and staff educated
• Unit “Supply Champions” designated to act as liaisons to staff
• Regular meetings were established to maintain quality
• Guidelines for product review and usage were established
• Clinical coordinator was designated to approve all items
• Stock for all rooms was determined
• Efficient arrangement for rooms was determined
• Online ordering was facilitated
• Use of handhelds was developed
• Vendor was contracted to par and restock units
• Procedure was developed for ordering when par is out
• Financial and quality audit steps within supply chain were developed
• Procedure was put in place for Nursing and Materials to ensure accurate and quality services

The Lab is another vital area with opportunities for Supply Chain improvements. Stanford was seeking to implement an improved Laboratory Supply Chain Process. The existing process was inefficient, with blanket orders coming from various departments, an inefficient use of automation for processes, and an inefficient and often non-compliant use of storeroom space. Excessive time was spent on supply chain activities. Inconsistent ordering processes made it difficult to manage inventory. Data necessary to drive purchasing decisions was not consistently available.

Working closely with Lab Staff and the Value Analysis committee, opportunities for increased efficiency were identified and new processes put in place. These included:

• Establishment of an Interim Materials Manager for the Lab providing both day-to-day oversight of the department and also analysis of processes which resulted in greater efficiency
• Setup of two perpetual inventories for the Lab (Main Hospital and off site) allowing the organization to recognized the stock as an asset, and providing a reduction in overstock and stock outs
• Utilization of usage reports to assist with potential stock items as well as using them to set up min/max levels for inventory which reduced overstock, thereby providing cost savings, and assuring minimum levels were met thus improving clinician and physician satisfaction
• Setup of par areas for various departments within the Lab, reducing time spent searching for materials
• Materials Management took over ordering process for general items and worked with clinical staff to develop appropriate par levels on reagents for Lab departments. This gave clinical staff more time to spend with patient related tasks.
• Redesign of the Lab storerooms resulting in ease of locating supplies
• Assuring that regulatory compliance in how supplies were stored was met

• Development of strategies for moving the ordering process of reagents under MM
• Elimination of blanket orders
• Elimination of phone orders, utilizing MMIS for ordering of all supplies
• Elimination of manual approvals by utilizing MMIS
• Training of all staff on MMIS to facilitate the automated processes

• Review of all service contracts to obtain best pricing
• Consolidation of supplies and reduced supply expenses
• Ensuring that supplies were available to customers in the most cost effective manner
• Implementation of vendor delivery directly to Lab to expedite receiving process

• Establishment of policies and procedures for scrubbing Lab Item Master File
• Set up of requisitions/forms for ordering of supplies
• Ensuring processes for accurate distribution of Laboratory product to floors and internal and external clinics
• Institution of financial and quality audit steps with supply chain
• Working with Lab staff to ensure accurate and quality service
• Utilizing handhelds for par levels
  

In the areas of Supply Chain, Nursing Units and the Lab, new processes in place created with a marriage of input from Clinical staff and sound business strategies will continue to bring added value to the organization. With the guidance of the Value Analysis Team, Stanford will continue to recognize cost reduction, customer satisfaction, quality improvement, and profit growth.