Flipping the script on supply chain savings

April 30, 2019 |  Revenue Cycle, Value

Medical inventory room

When hospitals look at improving their supply chain to save money, it’s no surprise that the first thing they consider is their supply costs — and then try to address workflow efficiencies.

At Northfield Hospital + Clinics, we turned that approach on its head by changing how our materials management staff works. Specifically, we set up a management system using our MEDITECH EHR that automates the manual count and inventory requisition process, giving our team a list of departments and the supplies for each, first thing every morning.

By using RFID to track each piece of inventory — all the way down to individual bandages — we’ve eliminated data entry and the walking around the hospital for the materials management staff running back and forth to the departments. Instead, we’re able to come into work each day and before we arrive, MEDITECH, RFID and RPA have already determined what the stocking needs are throughout our hospital. In fact, MEDITECH prints out our “pick lists” in our storeroom and our staff can plan their day accordingly.

This new workflow immediately made our materials management staff more efficient, and that has allowed us to address our other priority: Lowering supply costs.

A quick improvement

This is a huge departure from where Northfield’s supply chain operations stood just two years ago: Prior to implementation, we were counting inventory by hand and filing paper requisitions for more supplies.

For an organization like ours — with primary care clinics, urgent care facilities, and a network of specialty care centers in the Twin Cities region — that’s a lot of staff time for a process that we knew we could update and improve.

We started with staffing and workflow because it’s the biggest expense; taking the typical route and focusing on contracts first is, to me, trying to save pennies when there are dollars flying out your window.

After putting our new system in place, we cut the time spent counting supplies by 60 to 70 percent to start — and we’re now closer to a 95-percent reduction with the implementation of RFID and RPA.

And because of how quickly we saw results, it didn’t take long before our clinical departments were asking when they’d get the new system in place.

Getting the most out of the EHR

One thing that brought us to this point was asking questions about the EHR’s capabilities, and being persistent in using them.

In my experience, I feel a very low percentage of people use software to its full extent; the same thing is true with EHRs — many people complain about what it can’t do, without really knowing what it can do.

But as we found, the capabilities are there, though I think most people just don’t know how far they can go with their EHR.

One great example with this project was how we were able to adapt our MEDITECH EHR to the specific workflow we wanted to put in place. Having a flexible platform allowed us to create this new system — and achieve impressive results. By being able to track all the inventory in real time and with a high degree of accuracy, we are able to be more effective in inventory management.

We also reduced our standing inventory by 25 to 50 percent almost immediately, because we made our supply chain process so much more efficient.

These are the things you want an EHR to help you with, and we’re very pleased with the project so far.

Taking a different route to improve supply chain

At Northfield, we took a different approach to supply chain by looking at our staffing and developing efficiencies first, and then working on other priorities like pricing and contract penetration once we noticed how much time we were getting back each day.

The way I put it is, we needed to work through our list of “have to's”, so that we would be able to move onto the “need to's.”

Going into this project, our top “have to” was walking around the hospital to determine what needed stock and how much was needed.  By the end of the day, we did not have much time to work on contracting or pricing to lower our supply costs.

When I talk to other supply chain and logistic leaders, we discuss considering looking at their MM workflow first, in terms of what their staff is doing on a day-to-day basis. Once the staff is working more efficiently, they’ll then have the opportunity to improve other areas.

I also encourage hospital executives and managers to ask direct questions of their EHR vendor, and figure out how the platform can support their goals as an organization.

Taking on a project like this may seem daunting, but our experience at Northfield shows that with some innovation, creativity, and patience, healthcare organizations can work collaboratively with EHR vendors to automate inventory control, lower staff costs, and reduce spending on supplies.

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Written by Burdette Brown, Director of Supply Chain Operations, Northfield Hospital + Clinics

Burdette Brown is a innovative, collabrative and inspirational leader in the Supply Chain world. He has converted multiple hospitals to offsite distirbution, par levels to two bin KanBan, capital purchasing programs, and worked with multiple EHRs, including conversion/building of a new EHR. Director of Supply Chain at Northfield since 2017, Burdette is also an industry leader in using RFID and RPA to automate supply chain processes. With a Black Belt LEAN Six Sigma, as well as an entrepreneur, Burdette and change go hand-in-hand.
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