Point-Of-Use Automation as a Value Proposition in Supply

Chain ManagementPresenters:

William Stitt, CMRP FAHRMM CHLCorporate Director, Materials Management

University Community Health, Tampa FL

Judith Proctor, MBA CMRPDirector of Supply Chain Services

Munroe Regional Medical Center, Ocala FL

The “Value Proposition” Value Proposition can be simply defined as

the primary benefit of a product or service.

When considering the value proposition of supply chain automation, consider these questions: Why should I purchase and implement a (this)

system? Why should I do anything at all?

Value Factors Objective/Goal Impact Criteria Resources Cost Return Validation

Define the Objective What are we trying to achieve?

Better inventory management Reduce labor resources Take care of patients more effectively

What are we willing to change or sacrifice? Blow it up and start over Enhancement

Define the need and priority. Who is driving the bus? (clinicians or materials)

What happens if we do nothing?

The Impact of Automation Workflow

Breaking the “we’ve always done it this way” mentality.

Does simplification through automation actually make it more complex?

Staff and labor resources More, less or the same? Clinical and Materials

Customer Satisfaction

The Impact of Automation (continued)

Reporting and data capture Financial IT Department

Implementation and Support (Resources)

Criteria and Functionality Will the solution support providing the

appropriate level of service to our customers? Layering vs. Redesign The vendor’s “concept” and functional use

may not be the same! “It looks good on paper”

The selected criteria in selecting a system should be in the line with the impact automation will have on your supply chain!

Resources Financial What will it take to implement?

Materials staff time Changing behaviors

How long? Can a fast implementation be successful?

Information Technology support Develop policies and procedures Administrative Support Communication

Resource Management through Project Planning A project plan, even pre-system selection can

assist in meeting your goals: Who will be affected? How will they be affected? A resource “inventory”:

Physical-Equipment needs, equipment placement, network connectivity, utilities, etc.

Technology-Interface development, network infrastructure, testing and backups.

Intellectual-Process flowcharting, policy and procedure development, system testing.

Labor-In all facets of the project.

Cost & Return on Investment System Pricing

How much is it? Do we know the real costs? (Acquisition vs.

Ownership) Calculating a Return on Your Investment

Is a financial return necessary? Quantifiable reconciliation The price of operational “excellence” Was it a selling point of the system?

Revenue capture Reduce staff Cost savings

Validation Success or Failure?

Will the system perform the way we think it will? How will we know?

Does implementation=success? Plan for ongoing evaluation post installation is key!

Audit Tools People and Financial

Operational Indicators Benchmarking Customer Satisfaction

Validation Tools Consider the development of a vision

document related to supply chain automation activities. Our ultimate goal as corporate materials management is

to create a world class supply operation that supports the activities of the clinical staff, and provides the highest level of care to our patients. Automation of the supply chain in a multitude of forms can support that endeavor and meet and exceed our goals in the area of financial and inventory accountability, customer satisfaction and clinical excellence. Any automation introduced into the equation must function with transparency with regards to our business operations and with a positive financial and procedural return on investment.

Validation Tools A decision matrix based on organizational

goals and criteria can also assist in the evaluation of technology solutions related to the supply chain While such a tool can be subjective, it can raise

awareness as to the specific criteria/issues that surround the selection of automation within your supply chain.

Technology Decision Matrix

A Case Study

Automating the Supply Chain at the Point of Use

Munroe Regional Medical Center

421 Bed Non-Profit Community – Based 421 Bed Non-Profit Community – Based HospitalHospital

Located in Ocala, Florida, just north of Orlando Two Individual Emergency Centers Twelve Operating Room Suites Four Open Heart State-of-the-Art Theaters Four Cardiac Cath Lab Suites

The MRMC Challenge Control and Stabilize Inventory in the

Operating Room, Open Heart, and Cardiac Cath Lab areas

Drive Major Cost Reduction Refocus Nursing Time and Utilization Implement Supply Automation at the Point of

Use in these Traditionally High Cost Procedure Areas

Existing Challenges: Clinical

Reduce Stock Outs and Supply Safaris

Ease for End Users Optimize Space Reduce Non-Patient

Care Tasks

Existing Challenges: Operational

Standardized reorder and stocking processes Reduce restocking time and optimize par levels Enable perpetual inventory housewide Expand item

database

Existing Challenges: Financial Stabilize Inventory

Define & Manage Reduction in

Cost/Procedure Develop & Monitor

Benchmark Enhance

Documentation of Usage & Charging Improve Patient Charge

Capture Proactively Manage

GPO Volume Requirements

Before Automation Managing over 4000

Line Items in the OR, OH, CCL

Manual Inventory Counts

Item Locations in Vast & Duplicate Areas

Manual Charge Capture Bi-Annual Physical

Inventory Required 3 Days

POU Integration

ADT

Distribution

MMIS

Vendors

Billing

Pt Issues

Refills

Replenish

Pt Info

Pt BillingRefill Data

Database

EDI

ADTRequisition

Automation at the Point of Care“Make no mistake . . . . . You must hit take!”

Implementation Benefits

Associate Satisfaction Case Picking Improved Patient

Charge Capture Diminished Stock outs Efficient Refill Process Automated Inventory

Management

Financial Results

11% reduction

22% reduction

17% reduction

36 months24 months12 monthsReduction over benchmark

9% reduction

12% reduction

13% reduction

27% reductionCardiac Cath Lab (Procedure)

19% reduction

Open HeartOR (Case)

26% reduction Operating Room (Case)

Revenue Changes

2002 to 2005 Percent Change in Surgical Services per case revenue 71% 2002 Cost to Revenue 14% 2005 Cost to Revenue 8%

2002 to 2005 Percent Change in Open Heart per case revenue 90% 2002 Cost to Revenue 20% 2005 Cost to Revenue 9%

Financial

Savings Results

$4,909,389

N/A

$1,200,000

$4,318,329

2nd Year

$2,663,896

$400,000

$800,000

$2,094,761

1st Year

?Net Reimbursable Revenue

3rd Year

TOTALLess cost of program (including FTE’s,Lease, Service & Renovations)

N/AInventory Reduction

$3,434,396Supply Spend Reduction

Future Projects

POU Enhancements

More Items Integrated into POU Automation - (On going)

Implantables Lot # Tracking/JCAHO - (Completed in Open Heart)

More Interfacing with Systems to Document Product Use on the Clinical Records - (Working on a Witt Interface)

Integrate Preference Cards into POU Automation Utilization Standardization - (Implemented in OR)

POU Integration

ADT

Distribution

MMIS

Vendors

Billing

Pt Issues

Refills

Replenish

Pt Info

Pt BillingRefill Data

Database

EDI

ADTRequisition

WittDocumentation

New Projects within POU

Improvement in Inventory Turns Using equipment to help drive compliance with

Patient Care Protocols Wireless system for supply carts Robotics L & D Improve resource utilization

Robotics

Results Summary

Before Automation

After Automation

Questions and Answers

Thank You!