v.4 attaining the elusive e's in supply chain management:
TRANSCRIPT
V.4 Attaining the Elusive E’s in Supply Chain Management:Easy, Efficient, and Electronic
Attaining the Elusive E’s in Supply Chain Management: Easy, Efficient,
and Electronic
Paul PeabodyVice President & Chief Information Officer
Beaumont Hospitals
Royal Oak, Michigan
David WhiteSenior Business Operations Analyst
Beaumont Hospitals
Troy, Michigan
About Beaumont
Opened in 1955 as single 238-bed hospitalOpened in 1955 as single 238-bed hospital
Grew to two-hospital regional medical system Grew to two-hospital regional medical system located in Royal Oak and Troy, Michiganlocated in Royal Oak and Troy, Michigan
Royal OakRoyal Oak – 1,061-bed tertiary care, teaching, – 1,061-bed tertiary care, teaching, research and referral hospitalresearch and referral hospital
Second highest number inpatient admissions, nationallySecond highest number inpatient admissions, nationallySecond highest number surgeries, nationallySecond highest number surgeries, nationally
TroyTroy – 254-bed community hospital ranked among – 254-bed community hospital ranked among nation's busiest smaller community hospitalsnation's busiest smaller community hospitals
Sources: American Hospital Association,Sources: American Hospital Association,Annual Data Exchange SurveyAnnual Data Exchange Survey
About Beaumont
Beaumont Royal Oak
Beaumont Troy
About Beaumont
2005StatisticsAbout Beaumont
American Association of Retired Persons (AARP)“Top 50 Hospitals”
American Hospital Association“Quest for Quality”
American Nurses Credentialing Association“Magnet Status”
Hospitals & Health Networks“Health Care’s 100 Most Wired”
National Research Corporation“Consumer Choice Award”
Solucient“100 Top Hospitals – National Benchmarks for Success”
U.S. News and World Report“America’s Best Hospitals”in 11 medical specialties
Awards & RecognitionAbout Beaumont
ERP/Suite
Infrastructure
Optimization
Projects
Operational
Impact
Financial
Impact
Beaumonte3 Solution
Beaumonte3 Solution
Rolled out Oracle E-Business Suite 11i ERP in July 2001Human Resources
Human Resources, Employee Self-ServiceSupply Chain
Purchasing, Inventory/Order Management, iProcurement Self-Service, Payables, E-Commerce Gateway
FinancialsGeneral Ledger, Cash Management, Fixed Assets
Post-Production Expansion from July 2001 to presentHuman Resources
iRecruitment Self-Service (2004), Benefits Self-Service (2005)Supply Chain
GHX expansion (2002), Handheld Ordering module (2004),Patient Supply Charging module (2005)
FinancialsMiscellaneous Cash module (2003)
Reengineered over 600 business processes
Beaumonte3 Solution
ERP ProjectCommittee Structure
ERP/Suite
Infrastructure
Optimization
Projects
Operational
Impact
Financial
Impact
Beaumonte3 Solution
Supply ChainOptimization Projects
Supply ChainOptimization Projects
ERP/Suite
Infrastructure
Optimization
Projects
Operational
Impact
Financial
Impact
Beaumonte3 Solution
Why focus on process?
Avoid technology supporting a poor process Implement better processes not just better technologyNew technology on top of a bad process results in bad result FASTERPromote integration of systems, information
End user acceptance
Return on investmentCan’t improve what you can’t measure
Operational Impact
Sample Process
Procure-to-Pay Cycle
Sample Process
Procure-to-Pay Cycle
Operational Impact
Legacy/BaselineProcure-to-Pay Cycle
Process was largelypaper-based relying onmanually-intensive steps
½ to 1 DAY 1 to 2 Days1 to 2 Days
7 Days 3 Days 1 Day
Manually Search Paper
Catalog
Fax, Phone, or In-House Mail Paper
Requisitions
Requisition Input
Fax, Phone, Traditional EDI
Purchase Orders
Supplier Order
Fulfillment
Receive Product
Paper Invoice Mailed to AP
Invoice Matched to
PO
In-House Mail Invoice Holds
to Invoice Approver
Hold Response Sent to AP
Hold Resolved,
Invoice Paid
Printed Check Mailed to Supplier
Technology-driven, reengineered process with high-level of process automation
RequisitionAutosourcedinto Purchase
Order
RequisitionGenerated by
Handheld
PO Routedthrough
ElectronicExchange
Check OrderStatus Online
EvaluatedReceipt
Settlement(Pay on Receipt)
ElectronicFund Transfer
SupplierOrder
Fulfillment
ReceiveProduct(Advanced
Shipment Notice)
Exchange-basedorder routing andorder placement
Web-based orderstatus checks andonline reporting
Electronic order capture viahandheld device
Automated requisitionconversion into standardpurchase order
Accurate product identification and accuratepricing at front-end (requisition) precludesoccurrences of back-end (invoice)discrepancies
Complete automation dramatically reducesduration of procure-to-pay cycle
Real-Time
1 Day
1 Day / Payment Terms
Post-Production Procure-to-Pay Cycle
Sample Process
Patient Supply
Charge Process
Sample Process
Patient Supply
Charge Process
Operational Impact
Process largelypaper-based relying on manually-intensive steps
Legacy/BaselinePatient Charge Process
Distribution Clerk
Completes Request
Office Clerk Collects
Completed Requests
Distribution Clerk Tubes/
Delivers Product to Unit
Office Clerk Sorts Request
Sheets
Office Clerk Identifies
Requesting RC
Unit Staff Submits Product Request
Office Clerk Enters
Expenses/Charges
Data TechTransfers
Changes to BackendSystems
Data TechBacks UpLegacySystem
Product Request
Arrives in Distribution
Distribution Clerk Retrieves
Product
Office Clerk Files Request
Sheets
Technology-driven, reengineered process with high-level of process automation
Future/PlannedPatient Charge Process
Distribution Clerk Tubes/
Delivers Product to Unit
Data TechTransfers
Changes to BackendSystems
Distribution Clerk Retrieves
Product
Product Request
Arrives in Inventory Ctrl
Unit Staff Submits Product
Request via Web
Distribution Clerk Scans-In
Request Transaction ID
ERP/Suite
Infrastructure
Optimization
Projects
Operational
Impact
Financial
Impact
Beaumonte3 Solution
Financial Impact
Business Case
Results
Business Case
Results
Financial Impact | 2001
Financial Impact | 2002
Financial Impact | 2003
Financial Impact | 2004
Financial Impact | 2005
Royal Oak & TroyMichiganBeaumont Hospitals
Questions?Questions?
Paul Peabody
Vice President &Chief Information Officer
David White
Senior BusinessOperations Analyst
Royal Oak & TroyMichiganBeaumont Hospitals