improving inventory management

1

Improving InventoryImproving InventoryManagementManagement

Du NguyenAshley Benedict

Shands HealthCare

Information Systems Optimization, Process Improvement andQuality Control Methodologies

Shands at University of FloridaShands at University of Florida

Located in Gainesville, Florida570-bed academic tertiary care hospital142 intensive care beds

2

BackgroundBackground

In 2002, Shands at UF implemented an electronicscanning and inventory management system.New system keeps an accurate on-hand inventorycount and allows for automatic notification of criticalsupply outages.System automatically charges patients for suppliesused.Eliminated manual “piggy back” product stickerprocess.Nursing’s buy-in was crucial.

Initial Nursing Buy-In and Utilization AgreementInitial Nursing Buy-In and Utilization Agreement

Prior to system implementation, Nursing agreed thatthey would comply by scanning all patient chargeableand critical supplies.Chargeable supplies include approximately 800different medical supplies.Critical supplies are medical supplies that individualNursing units identified as being critical or necessary totheir patient population.– Nursing determines each item’s critical replenishment point.

3

How the Electronic Inventory Management SystemHow the Electronic Inventory Management SystemWorksWorks

The electronic system is interfaced with both thehospital’s patient billing system and the offsitewarehouse’s inventory distribution system.When a chargeable item is correctly scanned, the itemis charged to a patient’s account and also deductedfrom the current inventory level.When a critical item is correctly scanned, the item isdeducted from the current inventory level.Once a critical supply reaches its replenishment point,the system alerts the CDC to restock.The critical supplies are brought up to the appropriateNursing unit.

Electronic Inventory System and Daily Counting andElectronic Inventory System and Daily Counting andStocking of SuppliesStocking of Supplies

Counting of supplies occurs between 9 AM and 2 PM.Inaccurate inventory levels in system are corrected bycounter.Once count is completed for a particular unit, adiscrepancy report is generated for chargeablesupplies.– Report lists discrepancies between inventory level in system

and count.Simultaneously, order is sent to offsite distributionwarehouse.Warehouse fills all orders.Warehouse delivers supplies to hospital at 6 PM, 8 PM,and 10 PM.CDC staff stock supplies in the clean holding roomsbetween 6 PM - 6 AM.

4

Initial ProblemInitial Problem

Low scanning compliance throughout the hospital.SICU and CICU has the highest utilization of supplies– In December 2003, SICU and CICU’s cost of medical supplies

not captured were $24,824 and $16,517 respectively.– These two units accounted for 38% of the total cost of medical

supplies not captured for December.

Initial blame for poor scanning compliance was placedthroughout the supply chain.

Multi-Departmental Team Sets ObjectivesMulti-Departmental Team Sets Objectives

The newly formed team consisted of representativesfrom four different departments– SICU– CICU– Materials Management’s Central Distribution Center (CDC)– Management Engineering

5

Project ObjectivesProject Objectives

Determine causes for low scanning compliance and lowutilization of the current scanning and inventorymanagement system.Recommend information systems, process flow, andquality control improvements to increase the scanningcompliance and maintain accurate inventory levels onCDC stocked supplies.Estimate financial impact of improvements.

Recommendations & ImpactRecommendations & Impact

6

Untracked Inventory and Lost Charges duringUntracked Inventory and Lost Charges duringDowntime and Emergent CasesDowntime and Emergent Cases

Downtime Issues– Routine system maintenance or

technical problems.– Unable to scan barcode.– Unable to update inventory system.– Charges not applied to patient

accounts.

ProblemProblem

Doe, John Doe, Jane000111111111000111111111000111111111

000111111111000111111111000111111111

000111111111000111111111000111111111

000111111111 000111111111

000111111111

000111111111

000111111111 000111111111

Doe, John

Doe, JaneDoe, John

Doe, JohnDoe, JohnDoe, John

Doe, Jane Doe, JaneDoe, John

Doe, JohnDoe, JaneDoe, Jane

Doe, John

ERROR: Systemis not responding.

Emergent Medical Cases– Staff have no time to scan.– Supplies not tracked in the inventory system.– Charges not applied to patient accounts.

RecommendationsRecommendations

Implement a manual charging process duringdowntime and emergent cases.– Manual charge sheets used to record supplies used.– Barcode scanning sheets used to process manual charges.


7


Manual Charge SheetManual Charge Sheet

Surgical ICU Clean Holding Room Manual Charge Sheet Date

PT Name/MR:

Description Location Circle Size if Applicable

LINES1 Wireguides 0305 60cm-teflon 50cm-.018 50cm-.0352 MAC Two Lumen Central Venous Access Kit 04013 Introducer - Check Flo Performer Tray 6F 04054 Introducer - Cook Access Plus 9F 0402

4F/5cm 4F/8cm 4F/12cm5F/15cm 5F/20cm

6 Central Lines: Triple Lumen 0403-0404 7F/15cm 7F/20cm7 Dialysis Catheters 0406-0304 11.5F/24cm 12F/20cm 12F/15cmBard 12F/20cmBard

8 PA Catheters 0203, 0204,0302 Paceport Pacing Wire Bipolar CCO

9 LidCo CCO 0302-0303 Lithium Vial Flow Sensor Kit10 PICC Lines 0201 4F Dual 6F Dual11 PICC Microintroducers 0202 3.5F/10cm 4.5F/10cm 5F/5cm12 PICC Needles 0201 17ga 19ga13 PICC Insertion Tray 020214 Arrow Radial Artery Catherization Set 0904

5 Central Lines: Single Lumen 0402, 0404,0405

AmountUsed

Doe, John / 12345678

1

1

1/1/05


Barcode Scanning SheetBarcode Scanning Sheet

LINESWireguides Wireguides Wireguides60cm-telfon 50cm-.018 50cm-.035

5573104 5573103 5573102

Introducer Introducer Check Flo Performer Tray 6F Cook Access Plus 9F

2104410 5505512 5505510

Central Lines: Single Lumen Central Lines: Single Lumen Central Lines: Single Lumen4F/5cm 4F/8cm 4F/12cm

5530220 5530230 5514250

Central Lines: Single Lumen Central Lines: Single Lumen5F/15cm 5F/20cm

5514260 5514270

Central Lines: Triple Lumen Central Lines: Triple Lumen7F/15cm 7F/20cm

5590375 5590380

1

2

5

6

3 4MAC Two Lumen Central Venous Access Kit

8

Ensures that supplies will be captured in inventorysystem.Decreases cost of medical supplies not charged.Increases replenishment rates of critical medicalsupplies used during computer downtime andemergent cases.


ImpactImpact

Inconsistent Labeling, Mislabeling and Work Out LabelsInconsistent Labeling, Mislabeling and Work Out Labels

Nursing was frustrated and confused as to whichsupplies require scanning.Inconsistent labeling of yellow and white barcodes fromone pod to another pod in the same unit.Mislabeling causes incorrect items to be scanned.– Inventory system decrements the wrong item.– Incorrect item is charged.

Worn out barcode labels on the supply bins– Difficult for staff to read and scan.

ProblemProblem

9


Standardized the scanning process.– Only yellow barcodes for chargeable and critical supplies.

Labeled barcodes consistently.Revised clean holding room profiles.– Update barcode labels.

Posted reminder signs to scan yellow barcodes only.



SignsSigns

10

Decreases nurses' frustrations by simplifyingscanning process.Increases scanning compliance.Increases patient charges and inventory trackingaccuracy.


ImpactImpact

Barcode Scanning during Admission and ProcedureBarcode Scanning during Admission and ProcedurePreparation is Time ConsumingPreparation is Time Consuming

Admissions and procedures require multiple suppliesto be gathered and scanned.Scanning of supplies was time consuming.Increased probability of scanning incorrect barcodes.

ProblemProblem

TracheostomyPlacementProcedure

11


Designed and implemented a "virtual kit" process fortracking admission and procedure supplies.– Single barcode is scanned.– Inventory decrements.– Patient account is charged.

CICU “Virtual Kits”– Adult cardiac surgery admissions– Pediatric admissions– Thoracotomy procedure

SICU “Virtual Kit”– Tracheostomy placement procedure



Virtual Kit ExampleVirtual Kit ExampleDept: 6313 Par: S04 Kit: 10

Description QuantityADULT OXISENSOR 1ARMBOARD 9 1BASIN EMESIS 9 MAUVE 500CC 1CABLE PACEMAKER #5833 1CONN 5-IN-1 STRL CUSTOM 1CONNECTOR T-PLASTIC 1CUFF BLOOD PRESS ADULT WALL 1DRESSING ABTIMICROBAL W/CHG 1 1DRESSING TEGADERM TRANS 4X4 3/4 1FORCEP KELLY 5 1/2 STR 1HEPARIN 1,000U 500ML 2B0953 3INTERLINK T W/LL 2N3328 R T-CONNECT 4LOTION SKIN 2 OZ 96/CS 1MOUTHWASH 4 OZ 1NS 500ML 2B1323 1PETROLEUM JELLY WHITE 1OZ 1POWDER BABY 4 OZ 1RESTRAINT WRIST ADULT 1SCISSOR IRIS 4 1/2 STR 1SLIPPER PATIENT SFTY SKID LRG 1SOAP BABY BATH 4OZ 1SPIROMETER ICEN ADT ADULT 1SPONGE GAUZE 4X4 16PLY STERILE 1STETHOSCOPE ADULT 1SUCTION HANDLE YANKAUER 1SYRINGE CATH TIP 60CC 1TAPE ADHES 1/2 ROLL 1TAPE MEDIPORE 2X10 1TB SUCTION NONCOND 6 1TOOTHETTE DISP DENTIES 5UNIV HAND/WRIST RESTRAINT 1URINAL 1VALVE ANTI-REFLUX 1

Total Number of Items for Kit: 42

ADULT CARDIAC SURGERYADMISSION KIT

Dept: 6313 Par: S04 Kit: 10

Description QuantityADULT OXISENSOR 1ARMBOARD 9 1BASIN EMESIS 9 MAUVE 500CC 1CABLE PACEMAKER #5833 1


12

ImpactImpact


Decrease scanning time.– Increase patient care time.

Increase in scanning compliance.– Increase inventory accuracy.– Reduce scanning errors.

Reduce critical supply outages.

Lack of Communication between Nursing and theLack of Communication between Nursing and theMaterials ManagementMaterials Management

Nursing did not trust Materials Management‘s ability toresolve problems.– Stemmed from past problems caused by the previously

contracted distributor.

Poor communication between the contracteddistributor, the hospital’s internal CDC and Nursing.Unresolved issues– Process to charge damaged or expired items.– Process to credit items to the unit.

ProblemProblem

13


Posted communication logs in each clean holdingroom.– Allows Nursing to notify Materials Management when

problems arise.– Allows Materials Management to notify Nursing when there

are product changes, outages or substitutions.

Implemented new procedure for disposal of damagedor expired items.Provided Nursing with routine report of items that hadbeen credited to their unit.


Lack of Communication between Nursing andLack of Communication between Nursing andthe Materials Managementthe Materials ManagementCommunications LogCommunications Log

UNIT MONTH

ISSUES OR CONCERNS1. Date Time

Issue

2. Date Time

Issue

3. Date Time

Issue

PRODUCT CHANGES, SUBSTITUTIONS OR OUTAGES1.

2.

3.

4.

Please document any supply issues or concerns you have regarding your unit's par service. The list of product changes, substitution and outages is below. Please contact the CDC at ext. 50203 for extra request.

CDC AND NURSING COMMUNICATION LOG

14

Increase in communication between Nursing andMaterials Management.Problems identified and resolved in a shorter amountof time.Increase scanning compliance since damaged anddisposed items are accounted for in the inventorymanagement system.Reduce Nursing’s time spent searching fordiscrepancies.


ImpactImpact

Lack of Compliance IncentivesLack of Compliance Incentives

Hospital staff had no real incentive to comply with thescanning policy.Nurses were simply told that they should scanbarcodes, but there were no repercussions.No efficient means to track individual scanningcompliance.

ProblemProblem

15


Implemented a reward program– Recognize Nursing units that maintain a 95% scanning

compliance for 3 consecutive months.

Displayed trends of monthly scanning compliancerates for each Nursing unit– Nursing units can see results of their efforts.



High Compliance Reward ProgramHigh Compliance Reward Program

16

Inventory level in inventory management system ismore accurate.– Consequently reducing critical supply outages.

Nursing feels rewarded for proactively scanningmedical supplies.Encourages units with low compliance to scan.Creates scanning awareness in the Nursing units.


ImpactImpact

Lack of Quality Assurance ProgramLack of Quality Assurance Program

No routine quality assurance program.Limited amount of checks and balances to assure thatservice levels were meeting the needs of the customer.

ProblemProblem

17


Hired a quality assurance coordinatorand established a quality assuranceprogram.Developed a clean holding room auditprocess to track the following.– Condition of barcode labels.– Rotation and stocking of supplies– Overall organization of the clean holding

room.



Unit Quality Assurance ReviewUnit Quality Assurance ReviewUnit Quality Assurance Review Unit: Date:

Responsibility

Barcode Labels Quantity Identified

Quantity Checked

1. Missing barcode labels?

2. Incorrect barcode labels?

3. Non-scannable barcode labels?

Stock Quantity Identified

Quantity Checked

4. Outdated products?

5. Outage / substitution notifications?

6. Stock not rotated?

7. Mis-stocked products?

8. Overstocked products?

General Yes No

9. Credit bin emptied?

10. General neatness of room? (drawer label signs correct)11. Supply located below redline?

12. Supply equipment maintained? (bottom drawer is solid)13. Communication log posted?

Comments:

Action

18

Early detection of problems or issues.Improved overall quality of inventory managementoperations and clean holding room organization.


ImpactImpact

Inappropriate Removal of SuppliesInappropriate Removal of Supplies

Unlimited access to medical supplies allowedindividuals to go to another unit’s clean holding roomand retrieve supplies without charging.– Doors are unlocked by an ID badge scanning system.

Inaccurate inventory levels in system.Charges not properly applied to patient accounts.Can negatively impact the budget of the Nursing unitwho supplies are retrieved from for patients not on theirunit.

ProblemProblem

19


Replaced use of ID badge to access clean holdingroom with punch code locks.


Supplies are now controlled by each Nursing unit.– Code locks can be changed as needed.

Reduction in critical outages.Accurate inventory levels in inventory managementsystem.Reduction in discrepancies.


ImpactImpact

20

Manual Process to Track Customer SatisfactionManual Process to Track Customer Satisfaction

Unable to track customer satisfaction efficiently.Satisfaction surveys in the past were handed out tohospital staff to complete.Materials Management clerk would spend timeinputting the survey responses in a spreadsheet beforeresults could be tallied and suggestions could beconsidered.Inability to respond in a timely manner to problemareas.

ProblemProblem


Allowed Nursing unit staff to complete onlinesatisfaction surveys.


21

Enables rapid response to comments andsuggestions.Implement improvements to improve customerservice.


ImpactImpact

Percent Compliance Rate fromPercent Compliance Rate fromNovember 2003 – August 2004 for SICUNovember 2003 – August 2004 for SICU

Nursing Unit: SICUPercent Compliance for Scanning Medical Supplies

51%57% 59%

89% 86%

100% 96% 100%92%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04

Month

Perc

ent C

ompl

ianc

e

22

Nursing Unit: CICUPercent Compliance for Scanning Medical Supplies

43%37% 40%

67%

88%99% 100% 98%

81%89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Month

Perc

ent C

ompl

ianc

e

Percent Compliance Rate fromPercent Compliance Rate fromNovember 2003 – August 2004 for CICUNovember 2003 – August 2004 for CICU

Percent Compliance Rate for November 2003 byPercent Compliance Rate for November 2003 byNursing UnitNursing Unit

Percent Compliance for Scanning Medical SuppliesNovember 2003

November Overall: 53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

54 55 64 65 74 75 95 33ni 35ni 42bmt 44/45 52mi 82psy 94imc burn burnclinic

ci L&D MB pi si

Nursing Unit

Per

cent

Com

plia

nce

23

Percent Compliance for Scanning Medical SuppliesAugust 2004

August Overall: 92%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

54 55 64 65 74 75 95 33ni 35ni 42bmt 44/45 52mi 82psy 94imc burn burnclinic

ci L&D MB pi si

Nursing Unit

Perc

ent C

ompl

ianc

e

Percent Compliance Rate for August 2004 byPercent Compliance Rate for August 2004 byNursing UnitNursing Unit

ConclusionsConclusions

In August 2004, SICU and CICU accounted for only 9%of total cost of products not captured.– Decrease of 29% from December 2003.

Cost of Products Not Captured– SICU and CICU = $1,442– Overall Hospital = $15,695

Scanning Compliance Percentage– SICU and CICU = 95%– Overall Hospital = 89%

Gross Revenue Captured– SICU and CICU = $625,735– Overall Hospital = $2,137,537

1

IMPROVING INVENTORY MANAGEMENT THROUGH INFORMATION SYSTEMS OPTIMIZATION, PROCESS IMPROVEMENT

AND QUALITY CONTROL METHODOLOGIES

By Du Nguyen, MSIE and Ashley Benedict, Shands HealthCare

Abstract

Inventory management of medical supplies continues to pose challenges for many hospital systems. Shands Hospital at the University of Florida’s Materials Management department discovered the trials and tribulations involved with implementing a new inventory management system. In 2002, the hospital’s new electronic scanning and inventory management system was implemented in order to both track par stock inventory and charge patients for medical supplies. Two years following the implementation of the system, occurrences of stock-outs and lost charges resulted from the low scanning compliance rates among hospital staff. Surprisingly, the new system failed to achieve the charge capture rates of the previous manual “piggy back” product sticker process.

In November 2003, the Materials Management department began tracking two measures. The first is the cost of medical supplies not captured, which is the cost of medical supplies issued to a nursing unit but never scanned nor charged to a patient. The second measure is the scanning compliance percentage determine by the cost of supplies charged divided by the cost of supplies scanned. The gross revenue captured was also tracked. The two units with the highest cost of medical supplies not captured are the Surgical Intensive Care Unit (SICU) and the Cardiac Intensive Care Unit (CICU).

After continued decline in scanning compliance was observed in December 2003, a team was formed to assist the SICU and CICU to increase compliance. In December 2003, SICU and CICU’s cost of medical supplies not captured were $24,824 and $16,517 respectively. These two units accounted for 38% of the total cost of medical supplies not captured for December. The newly formed team consisting of representatives from SICU and CICU, Materials Management’s Central Distribution Center (CDC) and Management Engineering began working together in February of 2004 to make improvements that would reduce medical supply critical outages and increase scanning compliance.

Medical Supply Inventory Management Supply chain management took a new turn at

Shands Hospital at University of Florida when it implemented an electronic scanning and inventory management system in 2002. The hospital was optimistic that the new technology would keep an accurate on-hand inventory count and allow for automatic notification of critical supply outages that may occur on any of the Nursing units. In addition, the system can also automatically charge patients for supplies used, eliminating the manual “piggy back” product sticker process.

The piggy back process involved five people at the warehouse printing stickers and placing them on individual supplies. In the hospital, the nurse peeled the sticker off the supply and placed the sticker next to the patient’s name on a large log sheet. At the end of the day, a unit clerk would gather the large log sheet and record the charges in the unit’s logbook. The logbooks containing the charge information were collected from individual Nursing units, and three staff members in the Materials Management department manually entered charges into the computer. The new electronic scanning system eliminated the need for the manual charging each day and also eliminated the five employees in the warehouse and two employees in the Materials Management department.

The new electronic scanning system was implemented as a means for the hospital to eliminate the need for manual charging and inventory tracking. The electronic system would require the hospital staff to scan in chargeable and critical supplies as they retrieved them from their storage areas. On all Nursing units, there is a primary clean holding room where the majority of medical supplies are stored. The intensive care units also have additional supply storage areas located in their pods.

Prior to implementing the new system, Nursing agreed that they would comply with requirements to keep the electronic system accurate by using it to scan in all patient chargeable and critical supplies. Chargeable supplies include approximately 800 different medical supplies in the hospital, which insurance payors have approved for charging to patients, outside of hospital room charges. This chargeable supply list may fluctuate

2

due to items being added to and deleted from the inventory management system. Critical supplies are those medical supplies that each individual Nursing unit identified as being critical or necessary to the unit’s patient population. Nursing determines each item’s critical replenishment point.

The electronic system is interfaced with both the hospital’s patient billing system and the offsite warehouse’s inventory distribution system. When a chargeable item is used and the corresponding bar code is correctly scanned, the item is charged to a patient’s account and also deducted from the current inventory level. The replenishment level for critical supplies is 50% of their maximum par level. When a critical supply reaches its replenishment point, a critical alert report to restock is printed up in Central Distribution Center (CDC) located in the hospital. The critical supplies would be brought up to the Nursing unit that generated the report.

The electronic inventory system plays an integral part in the daily counting and stocking of supplies. Counting of supplies in the Nursing units’ clean holding rooms occur between 9 AM and 2 PM. This process is necessary to ensure that inventory levels are accurate for supplies that require scanning as well as supplies that do not require scanning. During the counting process, inaccurate inventory levels as reported by the system are corrected by the counter who manually enters the amount that is counted. Once the count is complete for a particular unit, a discrepancy report on chargeable supplies is printed up. The report lists the discrepancies between the inventory level in the system and what was counted. An order is also sent to the offsite warehouse. The warehouse then fills all the orders and delivers the supplies to the hospital at 6 PM, 8 PM, and 10 PM. The CDC staff then stocks the delivered supplies in the clean holding rooms between 6 PM and 6 AM.

Low Scanning Compliance after System

Implementation Two years following the electronic inventory

management system's implementation, the hospital was surprised at the low scanning compliance by Nursing and other unit staff. High non-captured supply costs triggered the attention of hospital administration, which put pressure on Nursing to find a solution. The following are the key statistics for the SICU and CICU, the two units with highest losses in supply charges, compared to the overall hospital’s statistics for November 2003, prior to improvement initiatives: Cost of Medical Supplies Not Captured

SICU and CICU = $38,131

Overall Hospital = $101,585 Scanning Compliance Percentage

SICU and CICU = 47% Overall Hospital = 54%

Gross Revenue Captured SICU and CICU = $309,736 Overall Hospital = $1,029,064

Initially, the blame for the poor scanning

compliance was placed throughout the supply chain. While Nursing admitted to not always scanning, the hospital’s contracted supplier at that time admitted to not stocking and counting the inventory with 100% accuracy. As a result, a medical supply management improvement project was initiated in February 2004 to address scanning compliance and other process issues. The multi-departmental project team was made up of representatives of Nursing for SICU and CICU, Materials Management’s CDC and Management Engineering.

The contracted distributor was the employer of the CDC staff prior to July 2004. In July, an operational business decision was made to shift the employment and management of the CDC staff to the hospital's Materials Management Department. The change allowed the hospital to have greater influence on hospital's internal supply distribution operations, which has been vital to process improvement initiatives.

Project Objectives The following objectives were developed after the

medical supply management improvement project was initiated: 1. Determine causes for low scanning compliance and

low utilization of the current scanning and inventory management system.

2. Recommend information systems, process flow, and quality control improvements to increase the scanning compliance and maintain accurate inventory levels on CDC stocked supplies.

3. Estimate financial impact of improvements.

Findings and Improvements Problem 1: Untracked Inventory and Lost Charges during Downtime and Emergent Cases

Originally, when the electronic inventory management system’s scanning module in the Nursing unit went down due to routine system maintenance or technical problems, the Nursing staff was unable to scan the barcodes and apply the charges to the patient

3

accounts. Ultimately, the inability of scanning resulted in lost charges and inaccurate on-hand inventory levels in the system. No manual records were kept of what supplies were retrieved for what patient, making it impossible to backtrack and apply charges.

During emergent cases, where patients required immediate attention, the nurses or clerks who retrieve the supplies do not have time to stop and scan. As a result, supplies were not tracked in the inventory system and charges were not applied to patient accounts. Improvements: Developed a manual charging process to capture

charges and inventory used during system downtime and emergent cases. The process consists of the following two elements: 1) Manual charge sheets are used to record the

supplies and respective quantities used on a particular patient during computer downtime or emergent cases. A nurse or a clerk can quickly complete the form after they have retrieved the supplies. See figure 1 for an example of a manual charge sheet for SICU’s clean holding room.

2) Barcode sheets are used to quickly scan the

supplies used from the manual charge sheets into the electronic scanning and inventory

management system. The barcode sheets prevent the clerk or nurse from searching for the individual bins for the corresponding barcodes to scan for supplies that are marked on the manual charge sheets. Figure 2 shows an example of a barcode sheet.

Impact: Ensures that supplies used during computer

downtimes or emergent cases will be captured in the inventory system at a later time.

Decreases the cost of medical supplies not charged by allowing the charges to be added to the patient account at a more appropriate time.

Increases the replenishment rates of critical medical supplies used during computer downtime and emergent cases.

Problem 2: Inconsistent Labeling, Mislabeling and Worn Out Labels

Nursing unit staff were often frustrated and confused as to which supplies require scanning due to inconsistent barcode labeling, mislabeling of items or worn out barcode labels.

Currently, barcode labels containing item specific information are placed on bins corresponding to the supplies stored in the bins. Yellow barcodes are used to identify items that are chargeable or considered critical to a specific Nursing unit’s clean holding room. White barcodes are used to identify all other supplies stored in the clean holding room.

Occurrences of inconsistent labeling of yellow and white barcodes from one pod to another pod in the same unit left nurses uncertain as to what supplies should be scanned. For example, one item that is labeled with a yellow barcode in Pod 1 in CICU indicates that it should be scanned. However, in Pod 2, that same item may be

Surgical ICU Clean Holding Room Manual Charge Sheet Date

PT Name/MR:

Description Location Circle Size if Applicable

LINES1 Wireguides 0305 60cm-teflon 50cm-.018 50cm-.0352 MAC Two Lumen Central Venous Access Kit 04013 Introducer - Check Flo Performer Tray 6F 04054 Introducer - Cook Access Plus 9F 0402

4F/5cm 4F/8cm 4F/12cm5F/15cm 5F/20cm

6 Central Lines: Triple Lumen 0403-0404 7F/15cm 7F/20cm7 Dialysis Catheters 0406-0304 11.5F/24cm 12F/20cm 12F/15cmBard 12F/20cmBard

8 PA Catheters 0203, 0204,0302 Paceport Pacing Wire Bipolar CCO

9 LidCo CCO 0302-0303 Lithium Vial Flow Sensor Kit10 PICC Lines 0201 4F Dual 6F Dual11 PICC Microintroducers 0202 3.5F/10cm 4.5F/10cm 5F/5cm12 PICC Needles 0201 17ga 19ga13 PICC Insertion Tray 020214 Arrow Radial Artery Catherization Set 0904

IVS15 Level One Tubing 030616 CVL Dressing Tray 0607

IV Fluid Type:RESPIRATORY

17 Trach Tray 010618 Thoracentesis Tray 010719 Thoracotomy Tray 010220 Chest Tubes 0307 20F 28F 32F 36F

6 6.5 7 7.58 8.5 9

22 ET Tube Exchanger 0901 11 1423 Trachs: Shiley 1006 #6 #8 Fenestr #824 Trachs: Portex Cuffed 1004 #9 #10 Fenestr #825 Inner Cannulas: Shiley 1005 #6 #826 Inner Cannulas: Shiley XLT 1007 #5 #6 #7 #827 Inner Cannulas: Portex 1005 #8 #928 Trach Ties 100429 Nasopharyngeal Airways 0910 28 30 32 3430 Blue Rhino Tray 020431 Hi Lo Evac 0909 7.5 832 Spirometer 1101

ET Tubes 0909

5 Central Lines: Single Lumen 0402, 0404,0405

AmountUsed

21

Figure 1. SICU’s Clean Holding Room Manual Charge Sheet Example

LINESWireguides Wireguides Wireguides60cm-telfon 50cm-.018 50cm-.035

5573104 5573103 5573102

Introducer Introducer Check Flo Performer Tray 6F Cook Access Plus 9F

2104410 5505512 5505510

Central Lines: Single Lumen Central Lines: Single Lumen Central Lines: Single Lumen4F/5cm 4F/8cm 4F/12cm

5530220 5530230 5514250

Central Lines: Single Lumen Central Lines: Single Lumen5F/15cm 5F/20cm

5514260 5514270

Central Lines: Triple Lumen Central Lines: Triple Lumen7F/15cm 7F/20cm

5590375 5590380

3 4MAC Two Lumen Central Venous Access Kit

1

2

5

6

Figure 2. SICU’s Clean Holding Barcode Sheet Example

4

labeled with a white barcode. Nurses often rotate through the pods based on their assignments and are faced with the decision of what to scan. Often nurses chose to either scan all barcodes regardless of color or scan only the yellow labels.

It was also observed for some supplies that the name of the item on the barcode label did not match the actual item in the corresponding bin. When mislabeling occurs, if an incorrect item is scanned, then the inventory system will decrement the wrong item. The supply that the nurse is retrieving and scanning may be a critical item that has a low quantity. The critical level is not reached since the wrong item was scanned and the CDC is not notified by the critical quantity error message. As a result, the Nursing units are making more calls down to the CDC to request more of that medical supply.

Worn out barcode labels on the supply bins make it difficult for staff to read the labels and scan correctly. It was requested that the supply stock technicians and counters notify the person in charge of making labels when they found worn out labels, however this rarely occurred. The worn out labels resulted in additional frustration for the staff. Improvements: Standardized the scanning process so only yellow

barcode labels, the chargeable and critical supplies, need to be scanned.

Ensured barcode labels consistency in each unit’s clean holding room and multiple pods.

Revised and update profiles of clean holding rooms and pod supply rooms to eliminate items that were no longer critical items or chargeable.

Replaced yellow barcodes of items that were no longer critical or chargeable.

Posted signs that state which barcodes to scan. Impact: Decreases nurses’ frustrations by standardizing and

simplifying the scanning process. Increases patient charges and inventory tracking due

to increase in scanning compliance. Problem 3: Barcode Scanning during Admission and Procedure Preparation is Time Consuming

Admissions and procedures require multiple supplies to be gathered and scanned. In the CICU where open-heart admissions are routine, the nurse must scan in several barcodes when the required supplies are gathered for the admission set-up. Due to the volume of supplies per set-up, the scanning of supplies was time consuming, increasing the probability for scanning the incorrect barcodes.

Improvements: Designed and implemented a “virtual kit” concept

for tracking admission and procedure supplies using a single barcode. When the barcode is scanned the inventory will decrement, and charges will be applied to the patient for all supplies assigned to that admission or procedure. See figure 3 for an example of the CICU Adult Cardiac Surgery Admission Kit.

The first virtual kit tested and successfully implemented was the adult cardiac surgery admissions kit in the CICU.

Other kits that have been implemented in CICU are pediatric admissions and thoracotomy procedure.

In the SICU, a kit was developed for the

Dept: 6313 Par: S04 Kit: 10

Description QuantityADULT OXISENSOR 1ARMBOARD 9 1BASIN EMESIS 9 MAUVE 500CC 1CABLE PACEMAKER #5833 1CONN 5-IN-1 STRL CUSTOM 1CONNECTOR T-PLASTIC 1CUFF BLOOD PRESS ADULT WALL 1DRESSING ABTIMICROBAL W/CHG 1 1DRESSING TEGADERM TRANS 4X4 3/4 1FORCEP KELLY 5 1/2 STR 1HEPARIN 1,000U 500ML 2B0953 3INTERLINK T W/LL 2N3328 R T-CONNECT 4LOTION SKIN 2 OZ 96/CS 1MOUTHWASH 4 OZ 1NS 500ML 2B1323 1PETROLEUM JELLY WHITE 1OZ 1POWDER BABY 4 OZ 1RESTRAINT WRIST ADULT 1SCISSOR IRIS 4 1/2 STR 1SLIPPER PATIENT SFTY SKID LRG 1SOAP BABY BATH 4OZ 1SPIROMETER ICEN ADT ADULT 1SPONGE GAUZE 4X4 16PLY STERILE 1STETHOSCOPE ADULT 1SUCTION HANDLE YANKAUER 1SYRINGE CATH TIP 60CC 1TAPE ADHES 1/2 ROLL 1TAPE MEDIPORE 2X10 1TB SUCTION NONCOND 6 1TOOTHETTE DISP DENTIES 5UNIV HAND/WRIST RESTRAINT 1URINAL 1VALVE ANTI-REFLUX 1

Total Number of Items for Kit: 42


Figure 3. Example of “Virtual Kit”

5

tracheostomy placement procedure. Impact: Decreases nurses' time spent scanning thus

improving patient care. Decreases nurses’ frustrations by simplifying the

scanning process. Increases inventory accuracy due to increase in

scanning compliance and reduction in scanning errors.

Reduces critical supply outages by scanning the items that are critical.

Problem 4: Lack of Communication between Nursing and the Materials Management

Nursing’s distrust of the Materials Management‘s ability to resolve problems has stemmed in part from past problems caused by the contracted distributor. Poor communication between the contracted distributor, the hospital’s internal CDC and Nursing made it hard to resolve any persistent issues. Some of the issues that have never been understood were the lack of a standard process on how to charge damaged or expired items and the lack of a process to credit items to the unit. Improvements: Posted communication logs in each clean holding

room to allow Nursing to notify Materials Management when problems arise, and allow Materials Management to notify Nursing when there are product changes, outages or substitutions. Figure 4 shows an example of a communication log.

Implemented a new procedure for disposal of damaged or expired items.

Provided Nursing with a report of items that had been credited to their unit.

Impact: Increases communication between Nursing and

Materials Management. Decreases response time to resolve problems. Increases scanning compliance since damaged and

disposed items are accounted for in the inventory management system.

Reduces Nursing’s time spent searching for discrepancies in uncharged supplies.

Problem 5: Lack of Compliance Incentives

Since the scanning system had been implemented, the hospital staff had no real incentive to comply with the scanning policy. Nurses were simply told to scan barcodes in order to keep the inventory system accurate and reduce critical supply outages. However, there were no repercussions for noncompliance. There were also no efficient means to track individual scanning compliance, making it difficult to hold an individual accountable.

Improvements: Implemented a reward program recognizing Nursing

units that maintain a 95% scanning compliance for 3 consecutive months.

Displayed trends of monthly scanning compliance rates for each Nursing unit, so they can see the results of their efforts.

Impact: Improves accuracy of inventory levels in the

inventory management system, consequently reducing critical supply outages.

Rewards Nursing units who proactively scan medical supplies correctly.

Encourages the low scanning compliance units to increase compliance.

Creates scanning awareness in the Nursing units. Problem 6: Lack of Quality Assurance Program

Under the management of the contracted supply distributor, there was not a routine quality assurance program. There was a limited amount of checks and balances to assure that service levels were meeting the needs of the customers. Improvements: Hired a quality assurance coordinator and establish a

quality assurance program.

Figure 4. Communication Log

UNIT MONTH

ISSUES OR CONCERNS1. Date Time

Issue

2. Date Time

Issue

3. Date Time

Issue

PRODUCT CHANGES, SUBSTITUTIONS OR OUTAGES1.

2.

3.

4.

Please document any supply issues or concerns you have regarding your unit's par service. The list of product changes, substitution and outages is below. Please contact the CDC at ext. 50203 for extra request.

CDC AND NURSING COMMUNICATION LOG

6

Developed a clean holding room audit process that will track the quality of the barcode labels, the stock and the overall organization of the clean holding room. See figure 5 for the Unit Quality Assurance Review.

Impact: Provides early detection of problems or issues. Improves overall quality of inventory management

operations and clean holding room organization. Problem 7: Inappropriate Removal of Supplies

The majority of the clean holding rooms in the hospital have doors that are unlocked by an ID badge scanning system. Nurses, physicians and clerks using their ID badges can access any clean holding room door in the hospital with this scan lock system. During the course of the project, it was determined that the unlimited access to medical supplies allowed individuals to go to another unit’s clean holding room and retrieve supplies without charging. The electronic scanning and inventory management system does allow supplies to be scanned and charged to patients on a different unit, although the process is more time consuming. Many individuals did not bother to scan in supplies that they retrieve from a different unit. As a result, real time inventory levels in the system were not accurate and charges were not properly applied.

Costs of supplies used and captured through the inventory management system are allocated or credited back into individual Nursing unit’s expense budgets at the end of each month by Materials Management. Each unit is credited back only the amount captured through the system by that specific unit. However, cost of supplies not captured or scanned in by a unit is deducted from its expense budget. Based on this procedure, if supplies are used on a patient from a different unit and

not correctly scanned in, then the unit where the supplies were originally retrieved from would be negatively impacted.

Improvements: Replaced use of ID badge to access clean holding

room with punch code locks. Impact: Each Nursing unit now controls supplies. Code locks can be changed as needed. Reduction in critical outages. Accurate inventory levels in inventory management

system. Reduction in discrepancies.

Problem 8: Manual Process to Track Customer Satisfaction

Measuring customer satisfaction has always been a way for the hospital’s Materials Management department to track how well the staff is responding to changes and improvements. Satisfaction surveys in the past were handed out to hospital staff to complete manually. A clerk would then spend time inputting the survey responses into a spreadsheet before results could be tallied and suggestions could be considered. Improvements: Allowed Nursing unit staff to complete online

satisfaction surveys. See figure 6 for an example of

the online survey. Impact: Gather feedback and respond to comments and

suggestions in a timely manner. Implement changes to improve customer service.

Figure 6. Online Satisfaction Survey

Unit Quality Assurance Review Unit: Date:

Responsibility

Barcode Labels Quantity Identified

Quantity Checked

1. Missing barcode labels?

2. Incorrect barcode labels?

3. Non-scannable barcode labels?

Stock Quantity Identified

Quantity Checked

4. Outdated products?

5. Outage / substitution notifications?

6. Stock not rotated?

7. Mis-stocked products?

8. Overstocked products?

General Yes No

9. Credit bin emptied?

10. General neatness of room? (drawer label signs correct)11. Supply located below redline?

12. Supply equipment maintained? (bottom drawer is solid)13. Communication log posted?

Comments:

Action

Figure 5. Unit Quality Assurance Review

7

Conclusion

The outcomes from the recommendations have resulted in a significant increase in scanning compliance in the SICU and CICU as well as hospital-wide. See figure 7 and 8 for SICU and CICU’s improvements in compliance. The overall patient charge capture compliance rate for the hospital has increased from 54% in November 2003 to 89% in August 2004. See figure 9 for the scanning compliance rates for all Nursing units in the hospital in August 2004.

Implementation of the recommendations has resulted in an estimated increase of gross revenue totaling $316,000 for SICU and CICU. In August 2004, these two units accounted for only 9% of the total cost of products not captured for August 2004, a decrease of 29% from December 2003. The cost of products not captured, scanning compliance and gross revenue captured for SICU, CICU and overall hospital for August 2004 were the following:

Cost of Products Not Captured

SICU and CICU = $1,442 Overall Hospital = $15,695

Scanning Compliance Percentage SICU and CICU = 95% Overall Hospital = 89%

Gross Revenue Captured SICU and CICU = $625,735 Overall Hospital = $2,137,537

Nursing Unit: CICUPercent Compliance for Scanning Medical Supplies

43%37% 40%

67%

88%99% 100% 98%

81%89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Month

Perc

ent C

ompl

ianc

e

Figure 8. Percent Compliance Rate from November 2003 – August 2004 for CICU

Figure 7. Percent Compliance Rate from November 2003 – August 2004 for SICU

Nursing Unit: SICUPercent Compliance for Scanning Medical Supplies

51%57% 59%

89% 86%

100% 96% 100%92%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04Month

Perc

ent C

ompl

ianc

e

Figure 9. Percent Compliance Rate for August 2004 for All Nursing Units

Percent Compliance for Scanning Medical SuppliesAugust 2004

August Overall: 92%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

54 55 64 65 74 75 95 33ni35ni

42bmt

44/4552mi

82psy94imc

burnburn clinic

ci L&DMB pi si

Nursing Unit

Perc

ent C

ompl

ianc

e

8

Biography Du Nguyen, BS Industrial Engineering, University of Florida, 2000; Masters of Science in Industrial Engineering, University of Florida, 2003 Du has worked for the Shands HealthCare Management Engineering Consulting Services department since 2000. As a senior management engineer, Du specializes in process improvement initiatives involving information technology integration in various areas of the hospital. She has also worked on financial modeling, facilities improvement, and database development. Du is currently working on obtaining her Executive Masters in Health Care Administration from the University of Florida. She has been a member of SHS since 2001. Ashley Benedict, BS Industrial Engineering, University of Florida, 2003 Ashley joined the Shands HealthCare Management Engineering Consulting Services department in June 2003. Her main focus has been database developments, staffing workload analysis and process improvements within different departments of the hospital. Ashley is currently working on obtaining her Master’s degree in Industrial and Systems Engineering from the University of Florida. She has been a member of SHS since 2002.

Acknowledgments The authors wish to thank David Hennessy and Bob Black from the Materials Management Department for their contribution to this project. Furthermore, thanks are due to the Surgical and Cardiac Intensive Care Units that took the initiative to recognize and resolve the issues with medical supply inventory and charging.

improving inventory management

Documents