6 keys to supply chain management
This past March, Texas Children's Hospital in Houston opened its Texas Children's Hospital Pavilion for Women after recently expanding a new West Campus in an effort to meet growing needs and a shift in population base. And with this growth, said Rick McFee, director of supply chain management at Texas Children's, there came an excellent opportunity to streamline the system's supply chain.
"Due to both of those projects as new projects, we had the ability to look at supply chain and how we were managing all that activity," he said. "It gave us the opportunity to look at new ways of doing that."
McFee, based on his experiences, outlines six keys to supply chain management.
1. IT systems should support maximum flexibility. When deciding on an IT system, said McFee, the organization chose to look, first and foremost, for one that gave them maximum flexibility. "We were making sure we could manage multiple types of items," he said. "For example, not every item can fit into the same box or container, so we needed to make sure we had maximum flexibility." Having a close-cabinet system, he added, results in more limitations than an open-cabinet system, putting the emphasis on barcoding to streamline processes. "So as long as you can grab that item and scan its barcode, or have the barcode label close to the item's location, the system works," he said. "That was one of the things we were looking for: the flexibility to manage multiple different types and sizes of projects without limitations to the physical constraint."
[See also: Supply chain costs in the crosshairs.]
2. Try to manage utilization at the floor level. Within Texas Children's facilities, said McFee, a nurse can pick up an item and see barcoding from both the manufacturer and the facility itself, allowing them to scan either code and document the inventory. "From a nursing perspective, they can scan it when they're pulling it off the shelf, or when they have it in their hand," said McFee. "In all of these systems that we used, the key concept is to try to manage the utilization at the floor level to the point where the user – the nurse, the technician, whoever – is basically documenting their use of that item." And, in the background, McFee continued, the system manages the generation of, say, a replenishment request automatically, "without someone having to go up and count every shelf," he said.
3. Include nurses on compliance efforts. McFee said they both train and monitor nurses on their compliance efforts, while identifying folks who may be having issues maintaining compliance. "We're talking down to the individual level or groups of folks," he said. "So if we find an item that's consistently not being captured, we work with nursing on how we can improve that, and how [we] can handle [this] in a different way." McFee added nurses also took a hard look at their own utilization patterns, which allowed the organization to dramatically reduce numbers when shifting to a new system. "We reduced the numbers for what [nurses] thought they'd be using," he said. "In some cases, they had a 10- to 12-day supply sitting on the shelves, and they were down to three to five a day for most items. That was a dramatic reduction."
[See also: Supply chain leaders say docs more involved in purchase decisions.]
4. Be aware of utilization patterns. An advantage of using a system to help streamline supply chain efforts is having the ability to key in your "true utilization patterns," he said. "All of these systems manage those utilization numbers, and they allow you to tweak those numbers to fit the true utilization patterns," he said. Communication with nurses and this function, McFee said, played a large part in the overall reduction in the inventory sitting on the floor. "That was through a multiple step process," he said. "We went through to right-size our inventory for the right volume of activity they were expecting."
5. Review your standardization and have a strong value analysis process. This is an "old stand-by" point, said McFee, and includes making sure you don't duplicate products in your supply chains. "And that means a pretty robust value analysis process, and one that's looking for opportunities, especially where we may be using a different manufacturer for achieving the same functional requirements," he said. "It's also looking at what you can do to reduce those number of overall lines." The value analysis process, he added, should look at any addition to the supply chain from a value perspective, while comparing it to what an organization currently has in stock. "We're always looking to use the best, most efficient and most effective product," he said. "[For example,] if you have a product and you're getting a great price on it, but in reality, you're using two or three of them when one should be working – finding these issues and those items and working closely with the clinical staff to identify those opportunities for change. It's part of what our value analysis does."
6. Don't forget about the data. Lastly, said McFee, you can't forget about the data. "Data, data, data," he said. "If you're not tracking it and you don't have your utilization activity through your ERP system or your point-of-sales system, you need that utilization data on everything." He added that purchasing systems should be linked to a point-of-sales system, allowing for a "single item master," he said. "So if someone goes to order something, if it's an item that's already out there, we may prevent them from creating a PO if they could get it from our warehouse," he said. "Or, we may have a contract established for an item with a vendor. We may not stock it, but the pricing has been established, which cuts out a significant amount of time within our purchasing function."
