Supply Chain Distribution & Logistics         Improvement Project        Northwestern Memorial Hospital Profile• Licensed ...
Supply Chain Distribution & Logistics           Overview of Complete Supply Chain Strategic Redesign                      ...
Supply Chain Distribution & Logistics                       Problem StatementHistorically there was no centralized, standa...
Supply Chain Distribution & Logistics                      Goal StatementDevelop a series of controls to optimize inventor...
Supply Chain Distribution & Logistics                           Collaborative Project & Initiatives                      W...
Supply Chain Distribution & Logistics                              Project Timeline         Phase I                      P...
Supply Chain Distribution & Logistics                                       Hard Dollar Results                  Surgery E...
Supply Chain Distribution & Logistics                                   Soft Dollar Results                               ...
Supply Chain Distribution & LogisticsBringing Outside RFID Technology to Healthcare
Supply Chain Distribution & Logistics                        Next StepsShort Term (3-6 Months)• Centralize and Implement R...
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Northwestern Memorial Healthcare

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  • In light of our continued effort to manage cost and prepare for reform we wanted to look at the entire supply stream. Given it’s size and scope at 225M annual impact we structured it with 5 pilars that are…Supply chain touches everyone in here, to the tune of $225m
  • Northwestern Memorial Healthcare

    1. 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. 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. 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. 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. 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. 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. 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
    8. 8. Supply Chain Distribution & Logistics Soft Dollar Results Baseline Current 1% Patient Care Patient Care % of Supplies 46% Managed Managed Managed 54% Supply Chain Supply Chain Managed Managed (Nursing Time Spent onInventory Management) 99% Other Key Improvements • Streamlined Clinical Documentation • Improved Accuracy of Clinical Documentation • Improved Supply Availability for Patient Care • Complete, Real Time Visibility to Available Inventory
    9. 9. Supply Chain Distribution & LogisticsBringing Outside RFID Technology to Healthcare
    10. 10. Supply Chain Distribution & Logistics Next StepsShort Term (3-6 Months)• Centralize and Implement RFID in the following Departments • Cardiac Cath Lab • Interventional Radiology • EP Lab • GI LabLong 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

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