Proactive Supply Chain Database Maintenance:

1. Proactive Supply Chain Database Maintenance: Increasing Accuracy While Reducing Errors

2. How Many of Your Organizations… • Spend too much time resolving price discrepancies, 855 discrepancies, and other data errors? • Have centralized all or part of their supply chain data maintenance processes?

3. Some Statistics… • “Data Warehousing Institute estimates that data quality problems cost U.S. businesses more than $600 billion per year…” which is the GNP of Spain • The GNP for the US is $10 Trillion. That means data quality problems represent a 6% loss in productivity. Source: Model Documents and Forms for Organizing and Maintaining a Data Quality Program. By Steven Levy, BSME, MBA, CQMgr

4. The Challenge… • Inaccurate datais the primary cause of transaction errors in an ERP system • Reactive changes do not address root causes • Duplicate Item Master & Vendor Master records create burdens on everyone • Maintenance requests are not processed in a timely fashion • Users don’t know when requests are processed • Difficult to establish ROI on data cleanup

5. The Impact… • Bad data requires countless of hours of manual intervention & money to reconcile errors • End user frustration & non-compliance • Loss of confidence in “the system” • High volume of special orders • Historical usage & forecasting not accurate = = =

6. The Building Blocks of the Solution… Clean, accurate data Data Integrity Streamlined & timely execution Efficiency Assign & hold responsible Accountability

7. Data Integrity: Common Industry Observations… • Many organizations have defined item description nomenclature but are non-compliant with the standard • Some organizations are beginning to adopt QA practices that address specific problem areas but does not encompass all supply chain data • Efforts to minimize errors are reactive – they address symptoms not root causes • Duplicate items and vendors are common • Increases risk of duplicate orders and payments • Historical purchase information inaccurate • Lack of executive buy-in

8. Data Integrity: Recommendations… • Define & Enforce Standards – • Description Nomenclature • ANSII/ISO Standards for UOMs • Proactive Synchronization of Data files – • Validation of Item Location, Item Master, Vendor Item & Contract files • Maintenance of Pars & Requisition Templates • Comparison of Lawson files against OR and Par system files • Perform QA & Cleanup – • Clean up the duplicates! • Take action on errors

9. Efficiency: Common Industry Observations… • Data changes are made manually with little automation used to expedite changes • Multiple people are maintaining the same files from different locations • Reports do not target specific problems • Poor communication between staff with overlapping functions

10. Efficiency: Recommendations… • Create & maintain core data files • Limit the number of staff involved in maintenance, centralize where possible • Designate a central location to manage all Add/Change/Delete requests • Use exception based reporting • Implement the use of technology : • Web based change request form • Excel Add-Ins • Re-useable Access Databases & Tools • Interfaces

11. Accountability: Common Industry Observations… • Few organizations have designated a single point of responsibility for data maintenance • Multiple facilities within an organization utilize varying functionality • No repercussions for deviations from polices & procedures • Add/Change/Delete requests are not completed in a timely manner • End users are typically not notified of request completion

12. Accountability: Recommendations… • Designate data integrity lead • Define process flows for data updates • Establish metrics • Enforce policies • Perform ongoing quality assurance validation, track errors, and use the tracking tool to identify and correct weaknesses in DBA processes

13. Supply Chain Data Org Chart: Current State… Corporate Office • No formal reporting or accountability • Each DBA operates primarily independently but has informal communication with one another Hospital A Hospital C Item Master Point-of-Use DBA IC, RQ DBA Point-of-Use DBA PO DBA PO DBA IC, RQ DBA Hospital B Clinical Systems DBA Clinical Systems DBA Point-of-Use DBA IC, RQ DBA AP DBA PO DBA AP DBA Clinical Systems DBA AP DBA

14. Supply Chain Data Org Chart: Recommended Future State… Corporate Office IC, RQ, PO, AP DBA Hospital C Hospital A Hospital B Point-of-Use & Clinical Systems DBA Point-of-Use & Clinical Systems DBA Point-of-Use & Clinical Systems DBA IC12 & IC81 DBA IC12 & IC81 DBA IC12 & IC81 DBA • Formal reporting and accountability has been established • All DBAs work as a team with formal, routine, documented communication

15. SC Data Process & Communication Flow: Current State… (START)Request for a database action Hospital A DBA Team completes data request Hospital A,B,C Accounts Payable Departments • Item Master • Item Loc • Manufacturer Codes • Templates • Par/ Cart Locations • Contract File • PO Vendor Item • P-of-U Item Master Fax Vendor Add Form to Complete Hospital A, B, C Materials Management Related Data Requests Hospital B PO and RQ databases Point-of-Use database change at each hospital Hospital C PO databases Hospital B DBA changes IC databases Hospital C MM changes IC and RQ databases • Item Master • Item Loc • Manufacturer Codes • Par/ Cart Locations • Templates • PO Contract File • PO Vendor Item • Templates • Contract File • PO Vendor Item • Item Master • Item Loc • Manufacturer Codes • Templates • Par/ Cart Locations • Pyxis • Omnicell • Par Excellence End User SMS/CDM database change ORMIS Point-of-Use database change at each hospital Hospital A,B,C Accounts Payable Departments Fax Completed Vendor Add Form • AP Vendor Master • Par Excellence • Omnicell • Pyxis Communication to end user/ originator change has been made • Each hospital is responsible for its own data integrity.

16. SC Data Process & Communication Flow: Recommended Future State… (START)Request for a database action Central Repository Filter and Track Requests to Teams IC12 & IC81 at Hospital A, B, C Point-of-Use & Clinical Systems DBA changes files at Hospital A, B, C Lawson IC, RQ, PO, AP DBA Team Communication to end user/ originator change has been made

17. Executive Buy-In… • Quantify Costs • Time spent on error resolution • Contract non-compliance • List Benefits • Proactive projects that can be accomplished with new time • Value of end user satisfaction • Create Visibility • Metrics

18. The Solution… • Streamline & consolidate • Implement common master files • Enforce consistent policies & procedures • Automate! • Proactive quality assurance • Metrics • Exception based reporting • ACCOUNTABILITY

19. The Pay Off… • Accurate pricing • Contract compliance • “Special orders” minimized • End user satisfaction • Better customer service • Accurate historical information & forecasts • Clean environment enables faster implementations & upgrades • Reduced time spent on errors & exceptions frees up staff to focus on value added tasks

20. Questions/Discussion Amanda Valcik Senior Lawson MM Consultant RPI Consultants avalcik@rpic.com www.rpic.com (410) 276-6090 - o (443) 465-1257 - c