<ul><li>III.1 Using Point-of-Use Systems to Implement Demand Pull Inventory </li></ul>
Using Point-of-Use Systems to Implement Demand Pull Inventory <ul><li>Bill Mosser, CMRP </li></ul><ul><li>Managing Directo...
Discussion Points <ul><li>Who is Temple University Health System? </li></ul><ul><li>TUHS Supply Chain Strategy </li></ul><...
TUHS <ul><li>5 Hospital System (non-profit) in Northeast Philadelphia </li></ul><ul><ul><li>Temple University Hospital (67...
Healthcare Operations Snapshot <ul><li>Press Ganey Scores  -  The Health System’s composite score for the first quarter of...
TUHS Supply Chain Strategy Prior State <ul><li>Inventory Ownership </li></ul><ul><li>Cath Lab </li></ul><ul><li>Interventi...
TUHS Supply Chain Strategy Value Analysis Principles TUHS Policies & Procedures Central Contracting Team Building Common S...
<ul><li>Expensive, manually intensive activities </li></ul><ul><li>Multiple product handling activities </li></ul><ul><li>...
FY04 Year End Inventory Levels
Supply Variety <ul><li>Too many varieties </li></ul><ul><li>Too many vendors </li></ul><ul><li>Different prices at each ho...
Logistics Maze <ul><li>Finding someone’s order </li></ul><ul><li>Transferring supplies  to another facility </li></ul><ul>...
Internal Delivery Services <ul><li>Who delivers what? </li></ul><ul><li>When do they deliver? </li></ul><ul><li>How long t...
End User Issues <ul><li>Multiple Bulk Warehouses </li></ul><ul><li>Multiple Storerooms </li></ul><ul><li>Direct from Vendo...
TUHS Supply Distribution Chain Rx Manufacturer Vendor Order Entry Supply Cart/Closet  Replenishment Processed Supplies Uti...
Pharmaceutical distribution process Document in system RN order entry MD writes order Rx tech picks order Rx checks order ...
Med/Surg distribution process Patient manually billed Chart sheets collected Nurse remove supply Order Put Away Order put ...
Issue Summary <ul><li>Inaccurate and incomplete Catalogs </li></ul><ul><li>Lack of streamlined processes </li></ul><ul><li...
How do we Resolve? <ul><li>Common, clean Catalog of Products </li></ul><ul><li>Central Warehouse for Optimizing Inventory ...
Demand Pull Vision <ul><li>To create a Business Model that will allow access to data across the entire supply chain from p...
TUHS Supply Chain Vision   Effectively Integrated POC Station or  Data Collection Patient Central Warehouse & Supply Distr...
Key Enablers <ul><li>Executive Management Support </li></ul><ul><li>Clean, Timely Updated Catalog </li></ul><ul><li>A syst...
Clinical Staff Involvement in Supply Chain TARGET: reduce the supply chain  steps of pharmaceuticals and supplies  by more...
 
Value Proposition <ul><li>Establish Framework for TUHS to gain full control over: </li></ul><ul><ul><ul><li>Non-Wage Data ...
Diligence:Source of Savings Best practice  Consumption reduction Contract compliance Lower cost alternatives Standardizati...
Proposed Implementation Timeline Pharmaceuticals Education, Monitoring, Drug Conversion, Inventory Transition 1 st  Qtr 20...
Proposed Implementation Timeline Supplies Validate, Cleanse & Enrich 1 st  Qtr 2006 4 th  Qtr 2005 3 rd  Qtr 2006 2 nd  Qt...
What’s Been Completed? <ul><li>Executive Management Support in Place </li></ul><ul><li>Vendor Partner Chosen and Contract ...
Next Steps <ul><li>Finalize Risk Sharing Contract </li></ul><ul><li>Implement Common Catalog </li></ul><ul><li>Complete Fo...
Future State Characteristics
TUHS Business Processes   Vendor Owned Inventory     True E-Commerce   Product Standardization   Point of Use Systems   Co...
 
ANY QUESTIONS??
Month Milestone Conclusion Task ID  9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Pro...
Month Milestone Conclusion Task ID  9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Pro...
Month Milestone Conclusion Task ID  9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Pro...
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  • Our three year strategy is to convert from the traditional decentralized, vendor driven, reactive model with different contracts, catalogs and processes to a system wide integrated supply chain complete with Demand Pull, Vendor Owned Inventory, Supply Formulary driven model with full contract compliance .
  • We’ve taken a building block approach focusing our initial efforts on developing the infrastructure to sustain an expanded and long term strategy. The green blocks have been completed. The yellow blocks are in the development and implementation staged for FY2006,. The gray boxes represent our future plans to complete the integration process.
  • Typically there are more than 19 steps in a typical hospital pharmaceutical distribution process (if possible, customize for customer)
  • Typically there are more than 20 steps in a hospital med-surg distribution process (if possible, customize for customer)
  • One company. One solution. One source. Cardinal Health.
  • LogisticSource can reduce the supply chain steps of pharmaceuticals &amp; supplies by more than 70%
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  • III.1 Using Point-of-Use Systems to Implement Demand Pull ...

    1. 2. <ul><li>III.1 Using Point-of-Use Systems to Implement Demand Pull Inventory </li></ul>
    2. 3. Using Point-of-Use Systems to Implement Demand Pull Inventory <ul><li>Bill Mosser, CMRP </li></ul><ul><li>Managing Director- Supply Chain Services </li></ul><ul><li>Temple University Health System </li></ul><ul><li>Philadelphia, PA </li></ul>
    3. 4. Discussion Points <ul><li>Who is Temple University Health System? </li></ul><ul><li>TUHS Supply Chain Strategy </li></ul><ul><li>TUHS Inventory Management </li></ul><ul><li>Demand Pull Inventory Model </li></ul><ul><li>Point of Use Systems </li></ul><ul><li>Pharmacy Pilot </li></ul><ul><li>Hospital Supply Pilot </li></ul><ul><li>Next Steps </li></ul><ul><li>Q&A </li></ul>
    4. 5. TUHS <ul><li>5 Hospital System (non-profit) in Northeast Philadelphia </li></ul><ul><ul><li>Temple University Hospital (671 beds) </li></ul></ul><ul><ul><li>Temple University Children’s Medical Center (68 beds) </li></ul></ul><ul><ul><li>Jeanes Hospital (197 beds) </li></ul></ul><ul><ul><li>Northeastern Hospital (200 beds) </li></ul></ul><ul><ul><li>Episcopal Campus (Behavioral Health Center & 24 beds) </li></ul></ul><ul><li>$140 million spend in Supplies & Pharmaceuticals </li></ul><ul><li>System Goals </li></ul><ul><ul><li>Employer of Choice </li></ul></ul><ul><ul><li>Premier Healthcare System within our market </li></ul></ul><ul><ul><li>2% operating margin on healthcare operations </li></ul></ul>
    5. 6. Healthcare Operations Snapshot <ul><li>Press Ganey Scores - The Health System’s composite score for the first quarter of fiscal year 2005 was 82.5 and we ranked at the 27th percentile. Currently our score is 84.6 and we have moved to the 64th percentile. </li></ul><ul><li>Operations Improvement program – Achieved $42.2 million which exceeded our 2005 budgeted target of $33.5 million. When added to our 2004 realized initiatives of $14.1 million the 2005 cumulative annual value achieved through our Operations Improvement Initiative was $56.4 million. </li></ul><ul><li>We make considerable use of the Solucient Benchmarking data to evaluate our expense performance. While we continue to strive for improvement our efforts to date have been successful. Our supply and pharmaceutical costs at our general med-surg hospitals benchmark at or better than the 25th percentile. Labor costs at Temple University Hospital are also at the 25th percentile. The community hospitals are working to bring their labor costs to within the 25th percentile. </li></ul><ul><li>Information technology investments are necessary for us to achieve a better level of clinical and operational effectiveness. Our seven year technology plan calls for an investment of approximately $186.0 million and will be focused in those areas that will allow us to redefine our processes and cost structure. </li></ul><ul><li>Medical Staff development strategies are focused on a better alignment between the physicians and the hospital to emphasize our surgical programs. </li></ul><ul><li>Prior to FY2004, the Supply Chain was decentralized and independent </li></ul><ul><li>Supply Chain Goals </li></ul><ul><ul><li>Reduce operating expenses by $27-32 million by FY2006 </li></ul></ul><ul><ul><li>Improve service & quality through improved relationships </li></ul></ul><ul><ul><li>Develop capability within 18 months or buy it </li></ul></ul>
    6. 7. TUHS Supply Chain Strategy Prior State <ul><li>Inventory Ownership </li></ul><ul><li>Cath Lab </li></ul><ul><li>Interventional Radiology </li></ul><ul><li>OR </li></ul><ul><li>Pharmacy </li></ul><ul><li>Distribution Services </li></ul><ul><li>99% Fill Rates </li></ul><ul><li>2 nd & 3 rd Shift Focus </li></ul><ul><li>Minimal Onsite Storage </li></ul><ul><li>Expense Management </li></ul><ul><li>Benchmarking-Cost per UOS </li></ul><ul><li>Operations Analysis </li></ul><ul><li>Freight Analysis </li></ul><ul><li>Price Parity </li></ul><ul><li>Contract Utilization </li></ul><ul><li>Contract Recovery </li></ul><ul><li>Common Catalog </li></ul><ul><li>Standard Nomenclature </li></ul><ul><li>Contract Compliance </li></ul><ul><li>Supply Tracking </li></ul><ul><li>Decision Support </li></ul>Strategic Plan Future State <ul><li>Formulary- </li></ul><ul><li>Classified, clean & synchronized item files </li></ul><ul><li>Easy to use web based technology with insignificant implementation cost </li></ul><ul><li>Inventory- </li></ul><ul><li>Track –Vendor Owned & Managed ( Lot Number, Expiration, Wastage) </li></ul><ul><li>Pay as we use Products </li></ul><ul><li>Provide high & easy visibility to usage data across the system </li></ul><ul><li>Contracts/Purchasing- </li></ul><ul><li>Leverage stronger negotiation </li></ul><ul><li>Realize maximum rebate recovery </li></ul><ul><li>Require compliance </li></ul><ul><li>Drive visibility for price differences </li></ul><ul><li>Executives- </li></ul><ul><li>Track cost/procedure, duration of procedure </li></ul><ul><li>Decisions based on reliable & complete data </li></ul><ul><li>Report spend by cost center & service line </li></ul><ul><li>Products & Services- </li></ul><ul><li>Achieve maximum standardization </li></ul><ul><li>Benchmark acquisition pricing </li></ul><ul><li>Enable optimum & acceptable utilization </li></ul><ul><li>Compare product categories from pricing & contract perspective </li></ul><ul><li>Clinicians- </li></ul><ul><li>Facilitate more time with patients </li></ul><ul><li>Enable QA reports based on patient outcomes </li></ul><ul><li>Provide preference list by MDs </li></ul><ul><li>Data Cleansing Services </li></ul><ul><li>Normalize & rationalize data </li></ul><ul><li>Classify using UNSPSC code </li></ul><ul><li>Vendor Driven Environment </li></ul><ul><li>Disparate & Incomplete Item catalogs </li></ul><ul><li>Different MMIS & Clinical systems </li></ul><ul><li>Disconnected Work Processes </li></ul><ul><li>Standard business rules lacking system wide </li></ul><ul><li>Supply management tools lacking </li></ul><ul><ul><li>Inventory mgmt </li></ul></ul><ul><ul><li>Contract mgmt </li></ul></ul><ul><ul><li>Benchmarking </li></ul></ul><ul><li>Urgency for savings </li></ul>
    7. 8. TUHS Supply Chain Strategy Value Analysis Principles TUHS Policies & Procedures Central Contracting Team Building Common Sourcing Single GPO Integrated Supply Chain Vendor Relationship Development Capital PO Controls TAC Prime Distributors Central Warehouse Contract Compliance Common Catalog Automated Par Management KPIs & Cost per UOS Capital Management Vendor Management Principles Of Procurement Common Product Selection Hospital Level Controls Price Leveling Requirements Driven Contracts POU Systems Integrated Procurement Cycle Wall to Wall Inventory Vendor Certification Utilization Management Strategic Capital Management Inventory Spend Down Product Standardization ECommerce On-Line Requisitions System Wide Controls FY07+ FY06 FY05 FY04 Formulary Management Strategic Sourcing Common Systems Patient Demand Matching Demand Pull Inventory Clinical Engineering
    8. 9. <ul><li>Expensive, manually intensive activities </li></ul><ul><li>Multiple product handling activities </li></ul><ul><li>Excessive inventory carrying costs </li></ul><ul><li>Lack of information sharing </li></ul><ul><li>Minimal cooperation among supply chain entities </li></ul><ul><li>Poor fill rates </li></ul><ul><li>Operations focus vs. focus on customer needs </li></ul><ul><li>Stock versus non-stock </li></ul><ul><li>KPIs </li></ul><ul><ul><li>25 th % or better in Supply $ as % of NPR & TOE; and per APD </li></ul></ul><ul><ul><li>75 th % in Supply $ per AD </li></ul></ul><ul><li>Inventory $$ </li></ul><ul><li>Too much on the shelves Proliferation of New Products </li></ul><ul><li>‘ Back Door’ Purchasing </li></ul><ul><ul><li>50% of total purchasing w/o POs </li></ul></ul><ul><li>Contracts are Missing </li></ul><ul><ul><li><60% of Supply Contracts </li></ul></ul><ul><ul><li><25% of Purchased Services </li></ul></ul><ul><li>Deliveries Bypass Receiving </li></ul><ul><li>Procurement Controls are Lacking </li></ul>Current Problems and Barriers
    9. 10. FY04 Year End Inventory Levels
    10. 11. Supply Variety <ul><li>Too many varieties </li></ul><ul><li>Too many vendors </li></ul><ul><li>Different prices at each hospital </li></ul><ul><li>Stock versus Non-stock ordering confusion </li></ul><ul><li>Training on new products </li></ul>
    11. 12. Logistics Maze <ul><li>Finding someone’s order </li></ul><ul><li>Transferring supplies to another facility </li></ul><ul><li>Tracking Deliveries from Outside </li></ul><ul><li>Who to call to resolve problems? </li></ul><ul><li>Waiting for return calls </li></ul>
    12. 13. Internal Delivery Services <ul><li>Who delivers what? </li></ul><ul><li>When do they deliver? </li></ul><ul><li>How long till next delivery occurs? </li></ul><ul><li>Bottom Line: We have redundant delivery staff services that few understand </li></ul>
    13. 14. End User Issues <ul><li>Multiple Bulk Warehouses </li></ul><ul><li>Multiple Storerooms </li></ul><ul><li>Direct from Vendor Philosophy </li></ul><ul><li>Who handles my stat needs? </li></ul><ul><li>Who to call for pickup & delivery? </li></ul><ul><li>Where can I store my equipment? </li></ul><ul><li>Who do I call for Service? </li></ul>
    14. 15. TUHS Supply Distribution Chain Rx Manufacturer Vendor Order Entry Supply Cart/Closet Replenishment Processed Supplies Utilized @ POC Data Keyed into MMIS Stock Picked Storeroom Manual Receiving Warehouse Bulk Delivery Rx Distributor M/S Manufacturers M/S Distributor PPI Manufacturer Specialty Manufacturer Specialty Distributors LUOM Delivery Manual Receiving Starts Here
    15. 16. Pharmaceutical distribution process Document in system RN order entry MD writes order Rx tech picks order Rx checks order Drug to floor Nurse removes Rx validates order Meds restocked Meds transported to Rx Rework of unused meds Patient credited Meds separated Order stocked in pharmacy Reorder book Order separated Order received Transmit order Order entry Patient care
    16. 17. Med/Surg distribution process Patient manually billed Chart sheets collected Nurse remove supply Order Put Away Order put away Delivery to Floor Select product Dept orders Purchasing review Order placed Dock delivery rec’v Product electronic rec’v Delivery to storeroom Patient charge stickers MM/Clinical manual inventory MM electronically places order Order picked Order transport to departments Sticker attached to charge sheet Special Orders Patient care
    17. 18. Issue Summary <ul><li>Inaccurate and incomplete Catalogs </li></ul><ul><li>Lack of streamlined processes </li></ul><ul><li>Over-Use of clinical personnel </li></ul><ul><li>Increase in supply expenses </li></ul><ul><li>Inadequate inventory control </li></ul><ul><li>Access to performance metrics and actionable information </li></ul>
    18. 19. How do we Resolve? <ul><li>Common, clean Catalog of Products </li></ul><ul><li>Central Warehouse for Optimizing Inventory </li></ul><ul><li>Streamlined Distribution Processes </li></ul><ul><li>Point of Care Data Collection Systems </li></ul><ul><li>Systems & Measures Defined & in Place </li></ul><ul><li>Aligned Storage & Delivery Capabilities in Departments </li></ul><ul><li>Volume based Inventory Levels </li></ul><ul><li>Ecommerce Systems </li></ul><ul><li>DEMAND PULL INVENTORY MODEL </li></ul>
    19. 20. Demand Pull Vision <ul><li>To create a Business Model that will allow access to data across the entire supply chain from point of manufacture to point of use, thus creating a seamless flow of product, information and cash that will have products available at point of use when required, through multiple delivery channels, at the lowest cost. </li></ul>2
    20. 21. TUHS Supply Chain Vision Effectively Integrated POC Station or Data Collection Patient Central Warehouse & Supply Distribution Partner EDI/XML MMIS/ERP .com engine Low Unit of Measure Electronically Received Supplies Delivered To Floor HIS/Billing EDI/XML Phone/Fax Authorized Distributor / Mfg. Starts Here Utilization Reports
    21. 22. Key Enablers <ul><li>Executive Management Support </li></ul><ul><li>Clean, Timely Updated Catalog </li></ul><ul><li>A system that aligns the expense more closely to the time of use </li></ul><ul><li>Culture of Change </li></ul><ul><ul><li>Process improvement </li></ul></ul><ul><ul><ul><li>Emphasis on customer service </li></ul></ul></ul><ul><ul><ul><li>Emphasis on product logistics </li></ul></ul></ul><ul><ul><li>Partnering </li></ul></ul><ul><ul><ul><li>Cross-organizational process orientation </li></ul></ul></ul><ul><ul><ul><li>Increased outsourcing </li></ul></ul></ul><ul><ul><ul><li>Shared services </li></ul></ul></ul><ul><li>Real-time information sharing </li></ul><ul><li>Enabling technology </li></ul><ul><ul><li>E-commerce </li></ul></ul>
    22. 23. Clinical Staff Involvement in Supply Chain TARGET: reduce the supply chain steps of pharmaceuticals and supplies by more than 70% Pharmaceuticals Supplies Administered and documented Rx validates order Nurse removes meds Unused meds rework process eliminated Order transported to depts. Order put away Nurse removes supply Patient care RN order entry Order received Order stocked In MedStation ® MD writes order Reorder process
    23. 25. Value Proposition <ul><li>Establish Framework for TUHS to gain full control over: </li></ul><ul><ul><ul><li>Non-Wage Data Integrity Challenges across the health system </li></ul></ul></ul><ul><ul><ul><li>Contract Management </li></ul></ul></ul><ul><ul><ul><li>Product Management </li></ul></ul></ul><ul><ul><ul><li>Procurement Cycle </li></ul></ul></ul><ul><ul><ul><li>Point of Use Inventory Utilization </li></ul></ul></ul><ul><ul><ul><li>Supply Distribution & Logistics Efficiencies </li></ul></ul></ul><ul><li>Implement Tools and Improvements to drive and sustain savings </li></ul><ul><li>Complement or replace existing Business and Technology investments </li></ul><ul><li>Allow TUHS to provide a best practice supply distribution model </li></ul><ul><li>Monitor & track progress on an on-going basis </li></ul>
    24. 26. Diligence:Source of Savings Best practice Consumption reduction Contract compliance Lower cost alternatives Standardization Therapeutic equivalents Waste reduction Warehouse & Storeroom Distribution Transportation Departmental Purchasing Accounts Payable Cost of Capital Vendor Owned Inventory Obsolescence Overhead Shrinkage TUHS: $11.2 Million Official $3-8 Million Unofficial TUHS: $ 4.2 Million SCS $?? Departmental TUHS Opportunity Estimated between $4 to 12M <ul><li>Space </li></ul><ul><ul><li>Warehouse, Storeroom & Departmental </li></ul></ul><ul><li>Revenue enhancement </li></ul><ul><ul><li>Operating room efficiencies & charge </li></ul></ul><ul><ul><li>capture </li></ul></ul>Pharmaceutical and medical supply utilization reduction Labor reduction Inventory reduction
    25. 27. Proposed Implementation Timeline Pharmaceuticals Education, Monitoring, Drug Conversion, Inventory Transition 1 st Qtr 2005 4 th Qtr 2004 3 rd Qtr 2005 2 nd Qtr 2005 Reporting & Monitoring (on-going) Ongoing Collaboration & Implementation SERVICE Common Wholesaler Implementation Conversion Refining & Expansion (on-going) Validate Database Initiative Implementation Build Database & Admin Function Expense Mgmt Started June 2005 & Ongoing POU System Implementation Common Formulary Partnership Development
    26. 28. Proposed Implementation Timeline Supplies Validate, Cleanse & Enrich 1 st Qtr 2006 4 th Qtr 2005 3 rd Qtr 2006 2 nd Qtr 2006 Reporting & Monitoring (on-going) Ongoing Collaboration & Implementation SERVICE Common Supply Catalog Extraction & Business Rules Extraction & Validate User Training Upload Ongoing Cleansing Validate Database Pilots Initiative Implementation Build Database & Admin Function Expense Mgmt Cost Per Unit of Service & KPI Reporting Started June 2005 & Ongoing Data Cleansing & Warehouse Inventory Management Partnership Development
    27. 29. What’s Been Completed? <ul><li>Executive Management Support in Place </li></ul><ul><li>Vendor Partner Chosen and Contract in Final Negotiations </li></ul><ul><li>90% Patient Care Areas have implemented POU for Medications </li></ul><ul><li>Remaining Departments targeted by June 2006 </li></ul><ul><li>200-250 Common Drugs packaged, ordered & delivered via integrated demand pull model at all sites </li></ul><ul><li>200-300 care specific drugs being converted to integrated demand pull model </li></ul><ul><li>Min/Max System in place for remaining drugs </li></ul><ul><li>Electronic Drug Ordering & Receipt in place…….invoicing next </li></ul><ul><li>Common Supply Catalog Cleansed, Created and Ready for Implementation 3/15/2006 </li></ul><ul><li>Business Process redesign at TUCMC (Pilot) </li></ul>
    28. 30. Next Steps <ul><li>Finalize Risk Sharing Contract </li></ul><ul><li>Implement Common Catalog </li></ul><ul><li>Complete Formulary Conversion for all Drugs at all sites </li></ul><ul><li>Finalize e-Procurement model for Pharmacy </li></ul><ul><li>Convert to Vendor Owned Inventory for Pharmacy </li></ul><ul><li>Plan & Implement Pilot Project at TUCMC </li></ul><ul><ul><li>Quantify all inventories </li></ul></ul><ul><ul><li>Determine benchmark levels and identify outliers </li></ul></ul><ul><ul><li>Develop Action Plans </li></ul></ul><ul><ul><li>Verify Item Catalog </li></ul></ul><ul><ul><li>Establish IT requirements </li></ul></ul><ul><ul><li>Align Technology as required </li></ul></ul><ul><li>Plan Implementation Projects for </li></ul><ul><ul><li>Nursing Departments - all sites </li></ul></ul><ul><ul><li>OR </li></ul></ul><ul><ul><li>CCL </li></ul></ul><ul><ul><li>IRAD </li></ul></ul><ul><ul><li>Who’s Next? </li></ul></ul>
    29. 31. Future State Characteristics
    30. 32. TUHS Business Processes Vendor Owned Inventory True E-Commerce Product Standardization Point of Use Systems Comprehensive Inventory Management Prime Vendor Programs/Scheduled Deliveries Unit of Service Cost Management Inventory Management in Select Departments Committed Group Purchasing Prime Vendor Programs with EDI Materials Management w/Information Systems and Software Materials Management Function at Enterprise Level Traditional Purchasing Department HIGH Potential for Cost Reduction LOW LOW Degree of Difficulty High
    31. 34. ANY QUESTIONS??
    32. 35. Month Milestone Conclusion Task ID 9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Project Tasks 1) Development of Supply Distribution Impact Plan - meetings and strategy sessions with HR - meetings and planning sessions with supervisory staff 2) Analysis and review of 3PL proposal and Impact Plan 3) Continued evaluation and meetings for Data Cleansing 4) Partnership Contract review and finalization of agreement 5) Review of contractual agreement by TUHS - modifications and changes - TUHS legal and project staff; review and negotiations 6) Confirm POU internal cost component in financials Page 1 12/31/05
    33. 36. Month Milestone Conclusion Task ID 9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Project Tasks 7) Second pass reviews of Agreement by TUHS - modifications and changes - second pass, tertiary revisions by legal - TUHS review of vendor modifications - final negotiations of terms and conditions - final legal and commercial review of terms and conditions - contract acceptance and signoff 8) Review and analysis of revised financials - discussions and negotiations on cost savings and incentives - development of clinical risk sharing models and metrics - development of internal financial process controls - final review and incorporation of financial deliverables into agreement 9) Review and analysis of implementation plan - meetings on plan tasks and rollout - development of plan for best optimal fit - plan review/revisions based on operational strategy - plan acceptance Page 2 12/31/05
    34. 37. Month Milestone Conclusion Task ID 9/1/05 9/15/05 10/1/05 10/15/05 11/1/05 11/15/05 12/1/05 12/15/05 TUHS Master Plan Project Tasks 10) Development of first phase communication plan for staff/network presentation - presentations as may be required 11) Initial organizational meetings on implementation team makeup and responsibilities 13) Finalization acceptance/timing/rejection of Cardinal divisional/service offerings with planned integration 14) First phase complete/contract signing Page 3 12/31/05

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