PowerPoint Presentation

Reducing Stock-Outs in MD Anderson Cancer Centers Outpatient ClinicsDavid Bivens, Caitlin Byler, Rachel Douglas, & Kaycee Wilson

Speaker: Kaycee Wilson, Quality Engineer1Supply Availability Project Teams

SteeringCommitteeOffice of PerformanceImprovementMaterials ManagementMelanoma & Skin CenterSusan FergusonCynthia PowersJeremy VilesByron MainJimmy ShermanDavid BivensRachel DouglasKaycee WilsonCaitlin BylerAntonio OdemsPete VerdoneJohn MorganTravis KingCarl CroftonMimi BrooksOguna TaylorCynarra OsbornOletha JonesRosa RodriguezFrom Manual:You look at each shelf in the par and go right to left scanning each item to bring it up to full stock. You cannot order more than what the handheld says.

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Current Inventory Management Process

1345Note: Those orders arrive the next evening

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Note: Items Received were Ordered Night BeforeClinic CloseClinic Open

From Manual:You look at each shelf in the par and go right to left scanning each item to bring it up to full stock. You cannot order more than what the handheld says.

3New Supply Process Objectives

Quantitative ObjectivesMinimize: Stock-outs ( Patients Denied Care )Subject to:Available SpaceAvailable LaborInventory Cost

Qualitative ObjectivesEase of UseEase of ImplementationEase of Sustainment

4Process Observation and AnalysisFour inventory process areas were identified for improvement effortsLevel SettingReorder SignalReorder QuantityBusiness Roles

5Baseline AnalysisLevel Setting

6Pilot Solution Level Setting1. PAR Level2. Reorder PointThere are two numbers important for level settingReorder PointBased on a one day delay between order and actual deliveryCalculated with historical ordering data by material repsCalculated based on items pulled from the warehouseDerived using statistical analysis yielding stock-out risk

PAR LevelBased on current workload

7Baseline AnalysisReorder Signaling

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Pilot Solution for Reorder Signaling

9Baseline AnalysisOrder Quantities

The materials rep will have to put the number remaining in the bin in the handheld.10Pilot Solution Order QuantitiesAlways order the same amount

Always order about bin size11Baseline AnalysisBusiness RolesMaterials ManagementResponsible for responding to clinic requests for par changesResponsible for order and delivery of suppliesClinicsResponsible for setting the inventory level of each item

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Daily Clinic Usage Nightly Replenishment

Pull the card when the supply level is at or below the tapeline 1Place the card in the low stock bin2Deliver supplies & make sure that the waterline holds the reorder point quantity1Put all cards in the ordered bin back on delivered item bins2Pull out all of the cards in the low stock bin3Scan the barcode on the back of the card and enter the handheld # in handheld. If you have to pull the quantity from the warehouse, pull the warehouse # amount

Back of Card4Place scanned cards in the ordered bin7

Pull the card when you use the item1

OrderedLow StockPilot Resupply Process and Business Roles! Note13PAR Setup Process and Business RolesCard SlotClinical TeamMaterials Management Team

Approve/Disapprove suggested removal of items3Reset levels1Request approval for removal of low usage items from Par (Red Tagging)2Put in waterlinesand adjust preset levels4Reorganize closet with nursing feedback5Relabel7Create Stock Cards8Reset Par in handhelds6**Blue boxes represent steps requiring tool created by OPI14P59 Melanoma and Skin Center Baseline

15P59 Melanoma and Skin Center Pilot Setup

16Tapeline Setting & Fixed Ordering Methodology(R,s,Q) Model

17Tapeline Setting & Fixed Ordering MethodologyReorder Point

18Tapeline Setting & Fixed Ordering Methodology**See References Slide19Reorder Point Setting & Fixed Ordering Simulation

DEMONSTRATION20Stock Card Template

21Summary of AssumptionsObjective stock-out minimizationCarry a minimum of two days on handConstraints labor, space, and budgetIncrease the days on hand to meet labor standardsDistribution of daily demand - normalSet reorder points according to a normal distributionDaily supply usageEstimate daily demand using work days between ordering instances

22Pilot Issues

23Future WorkPedi Child & Adolescent CenterCardiopulmonary CenterBreast CenterLeukemia CenterClinical & Translational Research Center

24ReferencesJunior, M.L. and M.G. Filho. 2010. Variations of the kanban system: Literature review and classification. Int. J. Production Economics, 125: 13-21.Chan, F.T.S. 2001. Effect of kanban size on just-in-time manufacturing systems. Journal of Materials Processing Technology, 116: 146-160.Kumar, C.S. and R. Panneerselvam. 2007. Literature review of JIT-KANBAN system. Int. J. Adv Manuf Technol, 32: 393- 408.Bijvank, M. and I. Vis. 2011. Lost-sales inventory theory: A review. European Journal of Operational Research, 215: 1-13.Johansen, S.G. and R.M. Hill. 2000. The (r,Q) control of a periodic-review inventory system with continuous demand and lost sales. Int. J. of Production Economics, 68: 279-286.Bijvank, M. and I. Vis. 2012. Inventory control for point-of-use locations in hospitals. Journal of the Operational Research Society, 63: 497-510.Baganha, M.P., D.F. Pyke, and G. Ferrer. 1996. The undershoot of the reorder point: Tests of an approximation. Int. J. of Production Economics, 45: 311-320.

Silver, E.A., D.F. Pyke, and R. Peterson. 1998. Inventory Management and Production Planning and Scheduling. 3rd Edition. Hoboken, NJ: John Wiley & Sons.25