By Charles Hodge
Vice President and Chief Procurement Officer – Seattle Children’s Hospital
Designing and implementing a smarter inventory process doesn’t have to be a complex, drawn-out process. Seattle Children’s Hospital is in the process of implementing a simple, just-in-time process for efficiently maintaining small inventories near the point of care. My perspective comes from spending 15 years managing supply chains in the manufacturing industry. I’m convinced the same principals and paradigms can help health care achieve the same improvements in accuracy, automation, speed, and cost-control.
You Don’t Need More Expensive Technology – In health care, we tend to throw money at new technology to make complex distribution processes faster. But that’s never the answer. Saving time and money calls for simplifying processes. Strip down your process to a simple visual queue and track how inventory flows through your organization. In all likelihood, you can accelerate these flows without huge technology investments. Set up simple bins and basic wire racks at key traffic areas and the point of care.
Barcodes Are the Key. Yes, barcodes are technology – but they are simple, proven, and inexpensive. You don’t need to scan every item unless granular precision is needed. In many instances, putting bar codes on the bins that are housed throughout your facility and scanning when the bin is empty will help to improve accuracy and efficiency.
Get Rid of the Warehouse. There’s no need – and no value – in managing a 40,000 sf warehouse housing millions of dollars in inventory. Work with vendors and distributors to have them maintain custody of and manage that material. For just $200,000, my hospital eliminated the need for a $5 million warehouse and achieved a $2.5 million return in the first year.
Get Physicians Out of the Inventory Control Process. Remember, your hospital’s mission is patient care--not inventory control. Don’t force physicians and other clinical staff to take stock, notify you about shortages, feel pressure to squirrel away “extra” supplies, or make off-contract purchases of non-standard goods. Let them focus on what they do best: caring for sick patients.
Pilot It and Expand. It’s important to get some early wins and prove the validity of the approach. Start with one department in one facility. Once you have the data, expand the deployment rapidly – you don’t want to delay your ROI too long or the project can lose its momentum
Ensure You Have Executive Sponsorship. There’s no substitute for executives who are firmly committed to continuous process improvements. Make sure you secure their strong support and communicate your results early and often to keep the momentum in place.