Supply-CHAIN MANAGEMENT (SCM) for hospitals is undergoing a “substantial reinvention,” said Eugene Schneller, professor and director of Health Sector Supply Chain Management and Policy at the W.P. Carey School of Business at Arizona State University. SCM is no longer viewed as a transactional activity. Rather, as the cost of supplies escalates and soon will begin to compete with labor costs, hospitals see SCM as a strategic way to control and manage the supply chain. Schneller said progressive hospitals are bringing in technology and information system innovations to deliver transparency and help them make better decisions. While some SCM technology has entered the healthcare market wholesale, special adaption is required to address, among other things, the interaction among the clinical, business and human resources sides of hospitals. The Health Sector Supply Chain Research Consortium is attempting to determine the ROI of supply-chain IT in hospitals, something that hasn’t been done before and will require between 18 months and two years “to get a good picture of the range of technologies,” Schneller said. The industry is only beginning to get standardized in SCM, he said. While there’s been “good progress,” he added, “we’re not there yet.”
THREE TRENDS TO WATCH
1. COST: Overall supply-chain costs will continue to grow, resulting in hospitals faced with patients unable to pay for services and procedures.
2. DEMAND: Demand for Physician Preference Items (PPIs) will continue to grow. Consumerism and aging Baby Boomers are driving up supply-intensive surgical procedures. The chart below shows the enormous growth for knee implant surgery in recent years.
3. TECHNOLOGIES: As SCM information technologies emerge and mature, the industry is looking at the ROI.
VENDOR SHOWCASE
Aethon
TUG and HOMER
Homer is an RFID-based asset tracking and recovery system designed for hospital Supply Chain Managers who are looking to reduce costs associated with managing equipment and supplies. TUG is a courier system for delivering and tracking of hospital supplies.
Contact: http://www.aethon.com/can_do.html, Joe Costa, 412.322.2975 ext. 239 jcosta@aethon.com
Boston Software Systems
Boston WorkStation
Boston WorkStation is a workflow automation and integration technology that provides an environment for on-demand process innovation and development. Boston WorkStation allows healthcare organizations to automate common tasks, including revenue cycle projects, interactions with Web sites, integrating new applications, systems and devices, and electronically monitoring and managing user activity.
Contact:http://www.bostonworkstation.com/workflow_automation/ product_ scripting_features.aspx, Margaret Mayer, marketing director, 866.653.5105, margaret. mayer@bossoft.com
Broadlane
BroadLink e-commerce exchange
An ASP-based electronic exchange, BroadLink is a powerful tool that electronically links providers to suppliers, helping health facilities manage all transactions involved with supply procurement, including purchase orders, purchase order acknowledgements, advance ship notifications, invoices and product and price updates while matching purchase orders against contract terms and providing alerts for off-contract items, resulting in greater application of uniform purchasing policies, reduction of rogue buying, increased contract compliance and fewer mistakes.
Contact: http://www.broadlane.com/services/information.html, Les Popiolek, senior vice president, procurement services, 972.813.7733
Caduceus Systems
The Caduceus Materials Management Information System
The Caduceus MMIS is a comprehensive system for managing the continuum of supply-related processes associated with the internal supply chain within hospitals and healthcare networks. The system is a powerful solution for requisitioning, procurement, receipt, storage, movement, tracking, automated replenishment, charge capture and managing purchasing contracts with an open architecture to facilitate integration with existing financial and clinical systems.
Contact: http://www.caduceussystems.com/, Ed Lane, 512.346.4164, ext. 228, ed.lane@caduceussystems.com
IBM
IBM Supply Chain Management solutions
IBM and IBM Business Partners combine their expertise to provide comprehensive SCM solutions designed to simplify and automate business processes, strengthen supplier networks, increase patient and staff satisfaction with deliveries, improve services levels and reduce inventory, streamline hospital process for operational efficiencies and allow collaboration with suppliers to integrate supply and demand.
Contact:http://www-304.ibm.com/jct03004c/businesscenter/smb/us/ healthcarescm/nav_id/healthcareintro, Contact:xpress Advantage Concierge,en/ 877.IBMACCESS (426.2223)
Lawson Software
Lawson Supply Chain Management Suite
Lawson Supply Chain Management is a fully integrated solution that helps healthcare providers connect and automate their supply chain to deliver increased efficiency, standardization and cost control, while enabling strategic spend management and analysis.
Contact: http://www.lawson.com/wcw.nsf/pub/scms, 651.767.7000, email to: info@lawson.com
McKesson
Supply Chain Management Solutions
McKesson’s Supply Chain Management solutions streamline workflow and help improve performance management, reducing operating expenses through product standardization, informed purchasing, inventory management and an organization-wide view of your total supply spend.
Contact:http://www.mckesson.com/en_us/McKesson.com/For%2BHealthcare% 2BProviders/Hospitals/Supply%2BChain%2BManagement/Supply%2BChain%2B Management.html, 800.981.8601
Oracle
Oracle Supply Chain Management
Oracle SCM is an integrated industry-specific solution that drives information-driven supply chains, enabling companies to predict market requirements and respond to volatile market conditions.
Contact: http://www.oracle.com/applications/supply-chain-management.html, 800.633.0738
USER REVIEWS
“The design of the Caduceus MMIS brings to the healthcare supply-chain functionality formerly reserved for the retail industry; the process improvements we’ve taken on since implementation have been remarkable, and we still haven’t tapped into all of the functionality that Caduceus has provided.”
Lesson learned: “Lock yourself in a room until you have a detailed map of every step in every supply-chain process; you and your MMIS provider should use the map to determine, specifically, the impact of the new system on each step.”
Brian Zuck, director, Materials Management, SMDC Health System
“Caduceus MMIS allows both program administrators and system users to customize many of the functions to ‘fit’ the facility’s procedures.”
Lesson learned: “The only challenge we experienced was that the Caduceus MMIS is so flexible and easy to use, we were occasionally confused when using the system in conjunction with other systems that we operate that are not as user-friendly.”
Joe Grant, materials manager, Waldo County General Hospital
“Since we automated our supply chain processes, we have avoided millions of dollars in capital expenses to purchase and implement a new MMIS system. We more than doubled EDI transmissions from an average of 28 percent to over 75 percent of items ordered. The process of verifying and transmitting purchase orders utilizing EDI order processing and scripting automation (from Boston WorkStation) went from 100 percent manual to 62 percent automatic. We used to verify exceptions of ordered EDI items manually. Now, it’s 100 automatic.”
Lesson learned: “There are as many ideas of Best Practices and how to implement them as there are employees, not to mention more than 20 years of mismatched practices. When you automate something, you must ensure that you are setting up the appropriate procedures. Refining information down to a usable document to create your automation process is a long and arduous process, but crucial to a successful implementation.”
Michael Maggio, systems specialist, Materials Management, Women’s Hospital, Baton Rouge, La.
“Two years after the rollout of Lawson Supply Chain Management, our supply spend as a percentage of revenue decreased by 1 percent, saving us over $16 million.”
Lesson learned: “A typical challenge in any IT implementation of this size is user buy-in and adoption. A solid change management and communication strategy is critical.”
Dennis Dahlen, senior vice president of finance, Banner Health
“To me, this technology (Aethon) enabled me to solve two separate problems at the same time, in the most efficient and economical manner – supply distribution and RFID-based asset tracking.”
Lesson learned: “The only somewhat challenging component of the implementation revolved around the process change and getting the nursing units to trust in the new process, but that was accomplished after the first week when they realized that the new process truly worked better for them.”
Dave Dillehunt, CIO, FirstHealth Moore Regional