Northwestern Memorial Healthcare

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Supply Chain Distribution & Logistics Improvement Project 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 Northwestern Memorial Hospital Profile

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Transcript of Northwestern Memorial Healthcare

Page 1: Northwestern Memorial Healthcare

Supply Chain Distribution & LogisticsImprovement Project

• 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

Northwestern Memorial Hospital Profile

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Ensure that investments in new products are safe and effective with defined measures for improved patient outcomes. (Medical Device Committee)

Leverage existing purchasing system that drive optimal workflow in the supply chain.

Optimize the cost of medical supplies and drugs by standardizing utilization, reducing variability, and increasing end user awareness.

Centralize controls, give back nursing time and improve cash flow by optimizing par levels, reducing the risk of expired product and automating replenishment .

Ensure contract compliance associated with price, terms, conditions, and NMH policy.

Goals

Supply Chain Portfolio

Exec Sponsors: Gary Fennessy, Nick Rave & Eric Conley

Strategic Sourcing

(Nancy Hensley)

David Wente

Contracting Management

(Jennifer McPherren)

Colleen Schmiege

Distribution & Logistics

(Brian Stepien)

Eric Hartlauf

Product Utilization

(Karen Anderson)

Arshia Wajid

Transaction Management

(Nancy Hensley)

Michael Manalo

Supply Chain Distribution & LogisticsOverview of Complete Supply Chain Strategic Redesign

Focus for IDN Summit Innovation Award

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Supply Chain Distribution & LogisticsProblem Statement

Historically there was no centralized, standardized Inventory Management process in Surgical Services. This resulted in excess inventory, waste, inefficiency and manual replenishment 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

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Develop a series of controls to optimize inventory levels, automate replenishment, increase charge capture, and minimize waste and ensure product availability 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

Supply Chain Distribution & LogisticsGoal Statement

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Objective:

Decrease Cost

Minimize Waste

Streamline Process

Maintain Quality Patient Care

Diagnostic Imaging/

Professional Services

Surgical Services

Physicians

Central Sterile

Supply Chain

Finance

Instrument Tray Standardization

Initiative

Supply Management

Transition

Slow Move/No Move Inventory

Reduction

Charge Capture Reconciliation

Process

Implementation of Expired

Product Reviews

Supply Chain Distribution & LogisticsCollaborative Project & Initiatives

Development of Internal Inventory

Turn Metrics/Goals

Workflow Redesign and Technology

Integration

Item Master Cleanse Initiative

Special Requests Elimination Controls

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Phase IProcess Redesign

Phase IIAutomation

Phase IIIExpansion

• Centralized Surgical Services Inventory Management

• Created “Implant Store” • Inter-disciplinary Collaboration to Develop Standardized Controls (Consignment, Valuation, Expiration, Charge Capture)

• Implemented Interim Barcode Technology

• Implementing RFID Technology to Automate Inventory Management

• Reallocation of Resources to Centralize Remaining Departments

• Expansion of RFID Technology

• Integration to Automate Replenishment & Demand Planning

Supply Chain Distribution & LogisticsProject Timeline

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Supply Chain Distribution & Logistics Hard Dollar Results

FY09 FY10 FY11 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 $600,000 $650,000 $700,000 $665,040

$482,484

$397,247

Surgery Expired Inventory

FY10Q1 FY10Q2 FY10Q3 FY10Q4 FY11Q1 FY11Q2 FY11Q3 FY11Q4 $500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000 $3,315,259

Surgery Charge Capture Increase

FY09

FY10Q1

FY10Q2

FY10Q3

FY10Q4

FY11Q1

FY11Q2

FY11Q3

FY11Q4

$12,000,000

$13,000,000

$14,000,000

$15,000,000

$16,000,000

$17,000,000

$18,000,000

$19,000,000 $18,176,703

$14,072,301

Surgery Inventory Value

FY09 FY10Q1 FY10Q2 FY10Q3 FY10Q4 FY11Q1 FY11Q2 FY11Q3 FY11Q43

4

5

6

4.3 4.2 4.2 4.1

4.8

5.2 5.2

5.5 5.5

Surgery Inventory Turns

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54%

46%Patient Care ManagedSupply Chain Managed

1%

99%

Patient Care ManagedSupply Chain Managed

Supply Chain Distribution & Logistics Soft Dollar Results

Baseline Current

% of Supplies Managed

(Nursing Time Spent on Inventory Management)

Other Key Improvements• Streamlined Clinical Documentation• Improved Accuracy of Clinical Documentation • Improved Supply Availability for Patient Care• Complete, Real Time Visibility to Available Inventory

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Supply Chain Distribution & Logistics Bringing Outside RFID Technology to Healthcare

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Supply Chain Distribution & Logistics Next Steps

Short Term (3-6 Months)• Centralize and Implement RFID in the following Departments

• Cardiac Cath Lab• Interventional Radiology• EP Lab• GI Lab

Long Term (6-18 Months)• Develop Automated RFID Patient Billing/Documentation Tool• Integrate RFID Technology for Instrument Tray Tracking• Explore Opportunities in Pharmacy & Clinical Laboratories• Develop Online Physician Request Portal