CLEVELAND – In unity there is strength – and savings – for University Hospitals.
The 11-hospital chain moved to a unified approach for ordering supplies and was able to achieve quantifiable efficiencies and savings at its facilities and approximately 150 caregiving sites in northeast Ohio.
Each hospital had a legacy system for ordering supplies before the system began moving to a unified system in 2003.
“There was a lot of duplicate data being housed in separate systems,” said Joel Savoca, director of the supply chain for University Hospitals.
In 2003, the system began the switch to a unified enterprise resource planning application. From first discussions to implementing the application from Oracle Corp. took about 20 months, said Alan Wilde, University Hospitals’ vice president of supply chain. That included upgrading the infrastructure so that it could run the Oracle application.
The initial investment was about $6 million, but the five-year savings with the system has been estimated at $9.3 million, said Jason deSantis, director of applications for the system.
Much of the savings came through more organized purchasing and the ability to take more advantage of group purchasing contracts.
“We were able to leverage that into cleaner data and better data, and we could make sure that all entities were buying items at the right terms,” Savoca said.
“We had a more robust item master than we were able to have before,” Wilde added. “We were able to automate day-to-day business processes, getting the requisitions into the system and getting everything distributed.”
The increased use of automation has enabled more granular distribution of supplies, Savoca said. For example, its prime distributor is delivering supplies to nurse units in the smallest units of measure.
Through the Oracle system, supply ordering has been integrated into the system’s accounts payable system, further facilitating the process.
“Our total supply spend is in the neighborhood of $265 million to $270 million, and we do a total of 300,000 invoice annually,” deSantis said.
Online requisitioning also has saved money and increased compliance with group purchasing contracts, said Carli Obeirn, another director of supply chain for University Hospitals. Ordering on computer also enabled purchasers to track orders and determine order status.