Northwestern Memorial Healthcare

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  • 1. Supply Chain Distribution & Logistics Improvement Project Northwestern Memorial Hospital Profile Licensed Beds: 868 Annual Admissions: IP: 47,739 ED: 80,696 Annual Surgical Cases: IP: 13,275 OP: 19,628 Operating Rooms: 52 Operating Room Inventory: Owned: $14.1M Consigned: $9.5M MMIS System: PeopleSoft ORIS System: Cerner
  • 2. Supply Chain Distribution & Logistics Overview of Complete Supply Chain Strategic Redesign Supply Chain Portfolio Exec Sponsors: Gary Fennessy, Nick Rave & Eric Conley Strategic Contracting Distribution & Transaction Product Utilization Sourcing Management Logistics Management(Nancy Hensley) (Jennifer McPherren) (Karen Anderson) (Nancy Hensley) (Brian Stepien) David Wente Colleen Schmiege Eric Hartlauf Arshia Wajid Michael Manalo Goals Ensure that Ensure contract Centralize Optimize the cost Leverage existing investments in new compliance controls, give of medical purchasing system products are safe associated with back nursing time supplies and drugs that drive optimal and effective with price, terms, condi and improve cash by standardizing workflow in the defined measures tions, and NMH flow by optimizing utilization, reducin supply chain. for improved patient policy. par g variability, and outcomes. (Medical levels, reducing increasing end Device Committee) the risk of expired user awareness. product and automating Focus for IDN Summit replenishment . Innovation Award
  • 3. Supply Chain Distribution & Logistics Problem StatementHistorically there was no centralized, standardized Inventory Management process inSurgical Services. This resulted in excess inventory, waste, inefficiency and manualreplenishment practices and the potential for patient safety risks.Key Issues/Concerns: Clinical Time Spent Managing Supplies Overall Awareness/Importance of Inventory Management Inaccurate & Surplus Inventory No Standardized Ordering Processes Decentralized Consignment Management Charge Capture Loss Manual Processes Waste (Expiration & Product Obsolescence) Product Availability Issues
  • 4. Supply Chain Distribution & Logistics Goal StatementDevelop a series of controls to optimize inventory levels, automatereplenishment, increase charge capture, and minimize waste and ensure productavailability to improve patient safety.Key Deliverables: Create Implant Store Give Time Back to Nurses Establish Standardized Ordering Controls Reconcile Inventory Increase Inventory Turns Increase Charge Capture Decrease Waste (Product Expiration) Centralize Consignment Management Automate Replenishment
  • 5. Supply Chain Distribution & Logistics Collaborative Project & Initiatives Workflow Redesign and Technology Integration Diagnostic Imaging/ Supply Professional Management Services Transition Development of Internal InventoryTurn Metrics/Goals Surgical Charge Capture Finance Services Reconciliation Objective: Process Decrease Cost Implementation Minimize Waste Streamline Slow Move/No of Expired Process Move Inventory Product Reviews Reduction Maintain Quality Patient Care Supply Physicians Item Master Chain Cleanse Initiative Central Special Requests Sterile Elimination Instrument Tray Controls Standardization Initiative
  • 6. Supply Chain Distribution & Logistics Project Timeline Phase I Phase II Phase III Process Redesign Automation Expansion Centralized Surgical Implemented Reallocation ofServices Inventory Interim Barcode Resources toManagement Technology Centralize Remaining Departments Created Implant Implementing RFIDStore Technology to Expansion of RFID Automate Inventory Technology Inter-disciplinary ManagementCollaboration to Integration toDevelop Standardized AutomateControls Replenishment &(Consignment, Valuation Demand Planning, Expiration, ChargeCapture)
  • 7. Supply Chain Distribution & Logistics Hard Dollar Results Surgery Expired Inventory Surgery Charge Capture Increase $3,315,259$700,000 $665,040 $3,500,000$650,000$600,000 $3,000,000$550,000 $2,500,000 $482,484$500,000$450,000 $2,000,000 $397,247$400,000 $1,500,000$350,000$300,000 $1,000,000$250,000$200,000 $500,000 FY09 FY10 FY11 FY10Q1 FY10Q2 FY10Q3 FY10Q4 FY11Q1 FY11Q2 FY11Q3 FY11Q4 Surgery Inventory Value Surgery Inventory Turns$19,000,000 6 $18,176,703$18,000,000 5.5 5.5 6 5.2 5.2$17,000,000 5 4.8$16,000,000$15,000,000 5 4.3 4.2 4.2 $14,072,301 4.1$14,000,000 4$13,000,000 4$12,000,000 3 FY09 FY10Q1 FY10Q2 FY10Q3 FY10Q4 FY11Q1 FY11Q2 FY11Q3 FY11Q4
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