Achieving Results through a Multiple Hospital Material Management Model

1. Achieving Results through a Multiple Hospital Material Management Model

2. Jerrold Maki Vice President, Clinical Services Stanford Hospital and Clinics Stanford, CA Ryan Siemers Manager PricewaterhouseCoopers LLP Chicago, IL

3. Agenda • The Goal • Structure to Support Change • The ORC (Offsite Reprocessing Center) • Maintaining IT Infrastructure • Business Partners • Key Performance Indicators

4. The Goal • Enhance and optimize the Supply Chain across the four Bon Secours hospitals in the Richmond market through: • Maximization of Offsite Reprocessing Center • Effective use of MMIS & other technology • Partnering with Distributors and GPO • Cost Management • Performance Measurement

6. ORC Overview

7. What is the Offsite Reprocessing Center (ORC)? • The ORC was created in order for Bon Secours Richmond Health System (BSR) to be proactive toward a projected increase in surgical procedures and supply utilization across the local market. • To offset the financial and operational demands of this increase, the BSR Executive Management Team, along with CVHN, approved the creation of the ORC.

8. ORC Benefits • The consolidation of 4 hospitals and all ambulatory surgery centers’ sterile processing departments (SPD) to an off-site location resulted in: • Improved quality for end-users • Greater speed of service • Freed-up much needed space at the hospital campuses • Consolidation of hospital storerooms and full movement to a just-in-time (JIT) hospital environment utilizing a bulk inventory facility at the off-site location resulted in: • Avoidance of vendor JIT service fees (ValueLink), which were increasing due to increased surgical services volumes and the opening of a new hospital • Reduced inventory and carrying costs at hospitals • Future opportunities of utilizing the ORC as a revenue generating entity by selling services to other regional health care providers

9. Case Cart Process Flow

10. Dirty Case Carts arriving at ORC

11. Dirty Case Carts get scanned into Decontam

12. Carts are emptied and trays prepped for wash

13. Dirty Case Carts get washed

14. Trays exit the washer and techs pickup for Assembly

15. Trays get assembled

16. … and count sheets printed

17. Trays are Sterilized

18. Trays are Cooled

19. Trays are scanned to location

20. Trays are scanned to location

21. Trays are pulled for Case Cart assembly

22. Case Carts are Assembled

23. Case Carts are pre-staged for deployment

24. ORC driver logs in and scans Case Carts to truck

25. Case Carts are loaded onto truck for deployment

26. Case Carts are transported to different hospitals

27. Case Carts are scanned to hospital clean dock

28. Case Carts are pre-staged for OR

29. OR Nurse scans Case Cart to room

30. OR Nurse scans any additional instruments needed for procedure

31. OR Nurse sprays with Pre-Klenz and places instruments back in container.

32. Case Carts are scanned into Decontam

33. Case Carts are inspected in Decontam STAYS AT HOSPITAL GOES TO ORC St. Mary’s MRMC St. Francis O R C

34. Scanning trays into Decontam

35. Scanning trays that go to ORC

36. Pulling trays that stay at hospital

37. Dirty Case Carts are pre-staged in Decontam for pickup

38. Performance Improvement

39. Performance Improvement Methodology • The following table depicts the Core Team structure:

40. Performance Improvement Methodology • Develop a work plan that incorporated all improvement initiatives including implementation steps, dates for completion, and responsible parties. The work plan was discussed and updated at each Core Team meeting. • Develop metrics that could be used to track progress. The fill rate of hospital supply requisitions was the high level indicator that was used to track progress. Other indicators were used to track progress of individual initiatives, e.g., killed line items, past due purchase orders, discontinued items ordered, number of temporary ORC employees, etc.

41. Performance Improvement Methodology • Examples of some of the initiatives in the work plan: • EDI 856 receiving interface • Shipping feedback interface • Receiving interface • Unit of Measure (UOM) adjustments • Inventory synchronization - Spectrum to Lawson • Physical inventory • Overflow resolution • Spectrum hardware and software maintenance • Cardinal item file review • Spectrum re-order point analysis

42. Performance Improvement Methodology • Work Plan Initiatives (cont.): • Instrument processing • Lawson kill list review • Past due PO list review • Product substitution process • Product return / credit process • Report access • Min / max reorder points • ORC staffing resource analysis and organization structure • Supply cabinet interface

43. ORC Staffing

44. ORC Staffing & Organizational Structure

45. ORC Staffing Analysis • An ORC staffing analysis was performed to identify the resource requirements needed to manage and run the operation • For the ORC Central Stores processes, the original Project Plan called for a Monday through Friday work week and two 8 hour shifts per day. Cardinal was required to deliver products Monday, Wednesday, and Thursday evenings, while Baxter would deliver on Tuesday and Thursday. The FTE resources allocated for this project were 6 FTE’s as seen below: • One ORC Manager • Five Materiel Management Technicians • Prior to the ORC going live, it was decided that, for the interim, Cardinal would deliver products Monday through Friday. Also, a third shift was added to breakdown and put away the products so that the first and second shifts could concentrate on picking. To facilitate these changes, 4 additional FTE’s were requested and approved. They are: • One Inventory Analyst • Three Shift Lead Mat. Mgmt. Tech’s

46. ORC Staffing Analysis (cont.) • Therefore, the new budgeted FTE allotment increased to 10 as seen below:

47. ORC Staffing Analysis (cont.) • In December of 2005, it was decided that further additional resources would be required to complete the staffing of the three shifts. PWC was asked to perform this analysis. The following table shows the results of this analysis: • The Shift Leads will support the picking process during periods of high volume.

48. ORC Staffing Analysis (cont.) • Below are the calculations on processed lines used to determine the required FTE’s: • The average number of lines processed per day for the time period of Nov. 1, 2005 through Dec. 9, 2005, excluding the week of Thanksgiving, equals 4,418, or 22,090 lines per week • The ORC has two carousels that are used over two shifts, equating to 32 hours of productivity per day (2 carousels x 2 shifts x 8 hours per shift) • Each Carousel is rated at 150 lines per hour

49. ORC Staffing Analysis (cont.) • Carousel 1 is named zone 1, carousel two is named zone 2, and zone 3 is used for bulk items considered too large to be picked efficiently by the carousel. Data is not available on the breakdown of where the lines are filled. However, observations and interviews showed that the breakdown is roughly 40% from each of the carousels and the remaining 20% from zone 3.

50. ORC Staffing Analysis (cont.) • Final approved FTE’s: