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TRANSCRIPT
Inventory Management Transformation:
Bringing Visibility to Your Clinical Inventory
Presenters:
Steve Pohlman, Sr. Director Materials
Management, Cleveland Clinic
Regina Schneider, Director of Nursing,
Cleveland Clinic
FACULTY DISCLOSURE
The faculty reported the following financial relationships or relationships to products or devices they or their spouse/life partner have with commercial interests related to the content of this CE activity:
Steve Pohlman: Nothing to Report
Regina Schneider: Nothing to Report
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Learning Objectives:1. Define risk-based contracting and its role in supply chain.
2. Identify best practices for cost-reduction, utilization review and reduction in variation in supply chain operations.
3. Examine tools to identify savings opportunities in your organization.
3
Supply Chain Vision
• PATIENTS FIRST
• Best in Class (Build vs. Buy vs. Partner)
• Enterprise Focus
• Revenue Generating
• Insource / Outsource Optimization
• Scalable Operation
• Partner to Core Business
• Data / Evidence Based Approach
• Physicians Incorporated in All Aspects
Scale of Operations• $3B Spend Oversight (~$2B CC)
• ~432K Purchase Orders
• ~1.3M PO Lines
• ~1,500 Contracts/Price Agreements
• 92K Part Numbers
• 133 Inventory Locations
• $126M in Owned Inventory (includes RX)
• Consigned Inventory $33M
• 97% Fill Rate
• 80 Automated Guided Vehicles (AGVs) at Main Campus
CC Supply Chain Journey
2007
Inability to realize
contracted savings.
Repositioned
responsibilities
2009
Value Based Sourcing Model
2011
Clinically Integrated Sourcing
2014
Platform for other
providers
2016
Inventory Transformation
• Evidence-based Decisions
• Physician Driven
• Clinical Alignment
• Value-based Sourcing $300M+ Savings
Strategic Tenets• Visibility from manufacturer to point of use
• Actionable intelligence via powerful analytics
• Eliminate inventory challenges with expired and
lost product
• Streamline by integration and interfaces
• Enable significant and sustainable supply chain
process and cost basis
• Full End-to-End Supply Chain and Channel
Optimization
• Allow clinical staff to work to top of licensure
Inventory Transformation
• Change materials process from a storeroom
centric vantage point to a patient and caregiver
centric service
• Designed solution from point of care back to
manufacturer
Bedside vs shelf
• Provider vs supplier perspective
• Integrated Supply Chain
organization
• Real time Utilization
• Expiration
• Chain of custody
• Location
• Fragmented Supply Chain
organization
• Historical Utilization
• No visibility
• No visibility
• Limited visibility
Supply Chain and Health Care
Inventory Management Transformation
Technology
• Implementation of the
Inventory
Management system
‒ LUM
‒ 2 Bin Kanban
‒ RFID
People and Process
•Understand workflows
‒ Nursing staff
‒ Local MM staff
‒ Top of Licensure
‒ Clinical Event focus
Support
•Center Of Excellence
‒ Implementation
‒ Consulting / Assessing
‒ Analytics
‒ Best Practices
•Ongoing Enhancements of
Software
Supply Chain Model with ValueLink
Inventory count
Product delivery…………………………………………...
Products are delivered to
customer dock/receiving
Central Store…………………………………………...
Customers place
product in Central
Store
Pick/Replenishment…………………………………………...
Customers pick product
to replenish departments
Departments…………………………………………...
Products are delivered
to individual
departments
Clinician Use…………………………………………...
Customer order…………………………………………...
Customers order
products electronically
Internal OrdersExternal Orders
Supply Chain Model with ValueLink
Inventory count
Product delivery…………………………………………...
Products are delivered to
customer dock/receiving
Central Store…………………………………………...
Customers place
product in Central
Store
Pick/Replenishment…………………………………………...
Customers pick product
to replenish departments
Departments…………………………………………...
Products are delivered
to individual
departments
Clinician Use…………………………………………...
Customer order…………………………………………...
Customers order
products electronically
EDI OrdersPar Optimization
Departmental Deliveries
Eliminates Touch Points
Med/Surg Distributor
Process Assessment Tools• Project Plan• Assessment TooloMotion and Time Studies (Pre and Post)oData ReviewoUnderstand current clinical workflowoUnderstand current MM workflowoDetermine who is ordering whatoGather tribal knowledgeoUnderstand supply storage areasoCAD Drawings
• Solution future workflow to accommodate clinical staff working to top of licensure
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Solution at a Glance
Just-in-time Scalable
Inventory Management Solutions
INVENTORY SYSTEM
INTELLIGENT
SUPPLY CHAIN
Low
Production
Cost
High
Production
Cost
Optimal tracking
and data
capture system
LUM
Low Cost Commodity
Products / High Velocity
2 Bin Kanban
Low Cost Commodity
Products / High Velocity
RFID
High Cost Products
High Cost Specialty Products
Cath/EP Lab Install
Completed
• RFID Cabinets (5), Wands & 2Bin Implemented
• First Install of RFID
• Integration with GE MacLab (Clinical System)
– Improved Documentation Workflow
Opportunity
• Expand Source Tagging
• Minimize Nurses
Involvement with
Inventory Management
RFID CABINET RFID CABINET 2 BIN
KANBAN
Inventory Management
Center of ExcellenceOur Mission:In pursuit of Patients First, the Inventory Management Center of Excellence
(IMCOE) actively partners with Caregivers to deliver best practice inventory
management solutions that support the strategic and operational goals of
the Cleveland Clinic.
Our Vision:The IMCOE provides the processes and governance in support of the
Inventory Transformation effort within Cleveland Clinic Supply Chain.
Our Values:The IMCOE values the following attributes to succeed in its mission:
• Patients First • Evidence based
• Collaborative • Process efficiencies
• Open • Quality performance
• Forthcoming • Empathetic
Inventory Management
Center of Excellence
Functional Responsibilities
• Subject Matter Expertise
– Inventory Management, CC Technology and Tools
• Establish standard work
– Reduce variation through enterprise
– Integration with clinical work flows
• Establish Best Practices
• Data, Metrics and Reporting
• Training, Policies and Procedures
• Integration support to other enterprise systems
• Enterprise Deployment – Project Management
Overview
• Hospital Go-live: Nov 15, 2016
• Merge of ASC/ED into hospital: Jan 7, 2017
• 126 Beds
• 12 ICU Beds
• 6 room OR (+ 4 procedure rooms)
• Cath / IR Hybrid lab
• ED, Lab, Imaging, Pharmacy
Avon Highlights
• 7 departments live on the CIMS platform
− Surgery − Cath/IR Lab
− Nursing Units − Radiology
− Pharmacy − Emergency Department
− Lab − Respiratory
• Expired implants & supplies were identified
through CIMS at Go-live
• Improved clinical workflow
Inventory Management by the Numbers
• Smart (RFID), Cabinets: 17
• Point Of Use Nurse Stations (OR, Cath/IR Lab): 11
• Total inventory value managed: $1,844,991
• Total Inventory Owned value: $1,514,464
• Total SKUs managed: 3,445
• Total Unique Instances (EA) managed: 306,390
• Suppliers: 302
• Expired items since 9/2016: 104 ($37,608)
Inventory Visibility
Department Owned Consigned
Surgery $862,715 $219,936
Cath/IR $398,026 $110,590
Nursing $141,327 $ -
Radiology $53,205 $ -
ED $46,398 $ -
Lab $10,677 $ -
Pharmacy $2,117 $ -
System Value
• Supply Chain staff assumes inventory management
duties: Cath Lab Nurses 6-8 Hours per day (FV)
Pharmacy Supply Tech .75 Hours per Day (AH)
Laboratory Supply Tech: 2 Hours Per Day (AH)
Respiratory Nurse 1 Hours Per Day (AH)
Value: Reallocation of Labor, Nursing work at top of Licensure
• Expiry Optimization $37,608 of Expired Products identified
─ Patient Safety
─ Enterprise opportunityo Shift at risk items across the enterprise
Value: Patient safety. Optimize SPEND
System Value
• PAR Location Optimization High utilization items identified = Adjusted 30% of
Total (658)
─ Top 10 Supplies, 90 day activity
3 Month Spend annualized = $517K
Value: Respond to Demand signal, improve SERVICE.
Medium Glove 2456 ReadyBath 3114
Carafe 1899 10cc Flush 2217
Mouthwash 181 .5L NS Solution 365
Chux 3635 Isolation gowns 1267
1L NS Solution 2171 AA Battery 948
System Value
• PAR Location Optimization
Low utilization Items identified = $460K
─ Requires Clinical decision making
259 SKU’s in OR ($270K)
427 SKU’s in Cath/IR Lab ($190K)
─ Enterprise opportunity:
Shift of at risk items across enterprise
Value: Inventory reduction opportunity. Optimize
SPEND
Nursing Feedback
• Quick, efficient, simple
• Price visibility: decreases waste. Saves both time and money
• Ability to identify expired product – patient safety
• Focus on patient and surgical team
Nursing Feedback
• The staff can’t wait until the next versions of the product – technology advancements!!!
• Relationship with Supply Chain
• Understand process, utilization, pricing
Inventory Visibility
Inventory Value by Vendor
1. Vendor A $89,890 6. Vendor F $39,946
2. Vendor B $82,222 7. Vendor G $31,102
3. Vendor C $70,806 8. Vendor H $26,260
4. Vendor D $65,312 9. Vendor I $24,439
5. Vendor E $52,642 10. Vendor J $12,257
Inventory Visibility
Top 5 Vendor increases over past 3 months
Vendor QTY Increase Value Increase
Vendor A 27 $38,378
Vendor B 33 $20,075
Vendor C 127 $16,561
Vendor D 88 $15,028
Vendor E 24 $7,094
• $78k inventory increase over the past 3 months
Top 5 Product increases over past 3 months
Vendor ProductQTY
Increase
Value
Increase
Vendor A Product A 3 $30,105
Vendor B Product B 33 $7,277
Vendor C Product C 63 $7,245
Vendor D Product D 13 $6,175
Vendor E Product E 9 $6,155
Inventory Visibility
Product Waste
(10.18.16 – 02.27.17)
Expired $38,216
Opened – Not Used $9,462
Defective/Damaged $639
Total Waste $48,317
Inventory Visibility
Expired
20 16
29 38
15
$6,194$6,351
$10,585
$7,125$7,962
0
10
20
30
40
$0$2,000$4,000$6,000$8,000
$10,000$12,000
10 11 12 1 2
2016 2017
Expired by Month
• Monthly review of near-expired
• Displayed by vendor and product
• Shift near expired to other hospitals, when possible
Inventory Visibility
Expired
• $14,973 Inventory < 90 days until Expiration
March $3,123
April $9,251
May $2,599
Inventory Visibility
1635
67
95 87
$1,222
$6,890
$11,079
$15,724
$18,504
0102030405060708090100
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
10 11 12 1 2
2016 2017
Lost
Monthly "Lost" Product
“Lost” Product
Inventory Visibility
Slow Move• $169k of product with no use since Go-Live
112
54
6
54
13
61
21
$23,077
$14,591
$11,307$9,793 $9,408 $8,963 $7,451
0
20
40
60
80
100
120
$0
$5,000
$10,000
$15,000
$20,000
$25,000
Arthrex Covidien MusculoskeletalTransplantFoundation
Boston Scientific Stryker C.R.Bard Depuy Mitek
Smart PAR Recommendation’s
Vendor A Vendor B Vendor C Vendor D Vendor E Vendor F Vendor G
Summary
• Proactive Point of Care Supply Chain
• Patient Safety Focused
• Inventory Optimization
• Enterprise level system of control
Learn – Adjust – Optimize - Innovate
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