For supply chain managers, the item master can serve as the single source for information on the thousands of items necessary to keep a hospital running, the springboard for critical supply chain functions, and the lynch pin for both value analysis processes and “clinical to supply chain” integration.
The item master is also a significant and complex source of supply chain pain because of “dirty data.”
When asked why their materials management information system (MMIS) contains dirty data, supply chain managers point to a variety of obstacles, including: large item files with more than 100,000 products, limitations on the item description field, a lack of industry supply data standards, varying or duplicative references to units of measure, discontinued product and vendor names and discontinued or unused items still included in the file.
The reality, however, is that with the exception of a lack of industry supply data standards, the causes of dirty data are within the control of supply chain managers. The real barrier is many don’t know where to start to correct the process problems that let dirty data into their item masters.
According to 2008 research commissioned by Novation, a subsidiary of VHA Inc., the financial benefits of cleansed, well-attributed product data and an effective item master management process can deliver up to a 1.3 percent annual reduction in supply spend.
Beyond incremental financial savings, if hospitals are able to effectively manage data in a way that fits the needs of their value analysis and revenue cycle teams, the operational efficiencies can be even more impactful.
Three questions to benchmark your item master management process
Understanding the true performance of your item master management process is complicated, but asking these three questions and identifying a corresponding measurement of success will give you a quick benchmark of your current processes.
[Performance results based on analysis conducted by VHA Inc. in January 2015]
| Questions | Top performers | Middle performers | Low performers |
|---|---|---|---|
| Process performance measure: What percentage of items in the item master has been ordered in the last three years? | > 75% | 50 - 75% | < 50% |
| Process performance measure: What is the percentage of duplicate items in the item master? | < 3% | 3 - 10% | > 10% |
| MMIS ROI measure: What percentage of items ordered are not currently in the item master? | < 3% | 3 - 20% | > 20% |
Three actions to improve your item master management
Knowing the impact of effective item master management and after evaluating against peer benchmarks, here are three actions you can take to improve your process in those key performance measures.
Action 1: Build steps in your process to stop dirty data from getting into the item master
- Reduce the number of people who have access to make changes to the item master;
- Establish a process for adding or removing products, including the variables that should be mandatory for each product;
- Identify analytics to make the process sustainable as well as to ensure you are monitoring and measuring performance.
Action 2: Leverage leading practices in data management to put standards, attribution and cross referencing to actionable use by extending item master information to other teams
- Procurement: proactively request vendor part numbers, validate price performance with executives and prioritize procurement opportunities;
- Revenue management: increase your ability to proactively provide level 2 HCPCS codes to your revenue department for coding for reimbursements in order to efficiently support value analysis activities;
- Value analysis team: connect multi-disciplinary value analysis team members with depth of product knowledge necessary for true equivalency measurements between products during evaluation; identify standardization and conversion opportunities across teams.
Action 3: Find a “single source of truth”
- Minimize the data sources you use for product attributes to decrease the likelihood that incorrect information will make its way into your system;
- Align different supply chain analytics to your single data source to reduce variation in the information you see and the results you achieve.
The phrase “dirty data” has become a buzzword within health care supply chains struggling to improve efficiencies. Without a doubt, health care has a data problem which is made worse by system constraints and inefficient or broken processes at the individual hospital level. Supply chain managers can greatly reduce the effects of data challenges by improving the processes within their control. By reviewing and improving current processes you can minimize dirty item master data and start to focus on putting the data to work for you and other teams to realize increased savings and improve care delivery across the organization.
Larry Bramble is vice president, performance services, at VHA Inc.