Midwest hospital employs mobile supply chain management to reduce costs and improve operational efficiency.
Midwest hospital employs mobile supply chain management to reduce costs and improve operational efficiency.
Materials management IT budgets often lag behind other departments as hospitals focus dollars on new clinical technologies. This intensifies the challenges materials managers face and overlooks a key area from which to drive business process improvements. For example, materials management departments using mobile technologies can yield time and cost savings that directly improve operating performance. Many hospitals are turning to wireless applications to drive the process improvements needed to deliver affordable, high-quality patient care.
Expansion Plans Require More Efficiency
BryanLGH Medical Center decided to apply wireless technologies within materials management in late 2003, as we began several building projects and needed to support more service departments and patients while controlling inventory costs. As a not-for-profit healthcare provider in Lincoln, Nebraska, we operate two acute-care hospitals three miles apart with 649 licensed beds. We also operate several outpatient clinics and have 3,800 employees, 62 of whom are in materials management.
With a Lawson enterprise resource planning (ERP) system in place since June 1999, we had already automated many core financial, human resources and supply chain functions. We also had established par areas throughout patient floors at both hospitals during the mid-1970s to manage inventory. We distribute supplies from a centralized warehouse and two smaller onsite storerooms, one per hospital. These storerooms serve as staging areas and provide specialized supply items to each site.
Before April 2004, we used Lawson Handheld Integrator and Symbol handhelds to count par areas. Staff cradled the handhelds in electronic docking stations to upload par data into the supply chain management component of our ERP system, which sent replenishment information to the central warehouse. Cradle syncing caused a delay of between one and five minutes per data “send” as staff waited to confirm transmission.
We also could not do automated inventory counts several times per year. Instead, our annual physical inventory was a time-consuming manual process once a year. We closed each of our central warehouse and onsite storerooms for one day each year and had 25 staff members conduct physical inventory using paper count sheets. Missing count sheets and errors associated with manual data entry resulted in less than optimal inventory and service levels. In 2003, our eight-year-old handhelds were becoming outdated and required repairs. We knew we needed to replace them.
We needed technology that would help us further automate processes to ensure the correct supplies were available when and where they were needed, optimizing inventory levels and boosting employee efficiency. BryanLGH started to implement an enterprisewide wireless network in March 2004 to support clinical laptops and a VoIP network. We saw an opportunity to capitalize on this wireless platform to achieve our materials management goals.
In early 2004, our distribution manager, senior programmer analyst and I began considering our technology options. We wanted the new mobile technologies to easily integrate with our ERP system, so we approached Lawson. After day-shift supervisors and supply technicians saw two product demonstrations, we selected the Lawson Par and Cycle Counting application. We also replaced our existing handhelds with smaller, more ergonomic Symbol 8846 and Dolphin 7400RF devices. This strategy enabled us to integrate the software and handhelds with our existing supply chain management application and provide
Web-based functionality, including cycle counting, scanning and bar coding.
Phased Implementation Eases Transition
We took a phased approach to implementation based on our staggered wireless network rollout, initial project budget and employee training needs. Our IT department first installed the wireless network on one floor of BryanLGH East, dictating which par locations we initially included. Phase one focused on the East facility and lasted 11 months. We began as a beta site on April 6, 2004, and completed the initial installation in less than two days, which included implementing the application on a Dell desktop PC in the IT department to serve four Dolphin handhelds.
Training employees on the new streamlined, wireless processes proved to be our biggest challenge. While employees’ initial reaction to the new software and hardware was positive, it meant that people had to change the way they worked. For example, employees now had to download count sheets to their handhelds versus printing them.
I first trained two supervisors and two technicians from the day shift. These super users counted the initial 10 par locations. The technicians counted additional par areas once we finished bar coding those locations–eventually counting 12 to 15 each per day. That August, we trained another technician and an inventory coordinator to count 15 new par areas each. In October, we had one evening-shift technician counting another eight to 15 par areas daily. By December, we trained four more evening staff, who counted 35 par areas per shift. We rolled out the mobile application to the remaining 105 par areas on the East facility in January 2005 using eight additional Symbol devices and completed phase one in March 2005.
Throughout our rollout we conducted trials and testing of the new software and handhelds while still using our previous system. This simplified the transition by enabling us to continue to track and manage all 412 par areas within our ERP system no matter how staff counted them. We also conducted trials and testing with warehouse and storeroom inventory coordinators before our April 2005 physical inventory to verify application use and procedures.
We made BryanLGH West the focus of phase two because that site underwent major renovations during 2004. This phase included 59 par areas and took just two months–March and April 2005–since we had resolved system testing and security issues while implementing phase one. During this phase, we brought par areas online as we completed construction and bar coding.
I trained most of the West site users in two group sessions. The first session targeted our most experienced staff–an inventory coordinator and supervisor–who became West site super users. The second session targeted another seven technicians. The super users lead by example to secure end-user buy-in, with the West site supervisor training the final three users in April 2005. A total of 30 supply technicians now use the mobile application and handhelds across the East and West sites.
Time, Cost Savings
We now count 254 of our 412 par locations via the mobile application, adding areas as construction continues. These 254 areas include 20,142 lines of individual supplies. Because we count these areas a varying number of times per week–some we count twice a week and others daily–we count 1,310 par locations and 109,479 lines per week using the mobile application. These counts generate 100 to 165 requisitions a day from our mobile supply chain management system. Our other 158 existing par areas are small areas primarily for forms, so we do not intend to count them via the mobile system.
Lawson Par and Cycle Counting enables us to maintain stock more accurately and efficiently–helping us optimize inventory levels and improve service to employees and patients. We realized staff productivity increases and cost reductions in several areas. Inventory turns increased from 11 to 13.7 per year in facility storerooms and from seven to 18 per year in the central warehouse because more accurate par data resulted in the correct supplies being ordered. We reduced the time needed to complete physical inventory from 24 to 10 hours. Previously, it took 28 staff members three 8-hour days to perform physical inventory. Twenty-five employees completed paper count sheets while three supervisors manually entered the data into our supply chain management system.
This year, we completed our physical inventory at the central warehouse and facility storerooms in 10 hours with only 12 employees–three supervisors, three inventory coordinators, five distribution technicians and the warehouse manager. Employee teams started in all three locations simultaneously, then helped other teams after completing their initial location.
In par locations with more than 100 items, we reduced the time needed to count par locations by up to 50 percent–20 versus 40 minutes. This time savings enabled us to reduce 1.5 FTE positions for an annual cost savings of $45,600. We also have saved 260 personnel hours per year since staff now use bar-code scanning and send data updates wirelessly. This allows us to count par locations in newly built service units and private rooms without adding staff.
We have accelerated supply picking by automatically transmitting replenishment orders to the appropriate site. While we schedule picking every hour, we can now pick on demand. We pick the same number of items, but pick information reaches our warehouse or storerooms faster. As our patient volume grows, we anticipate this automatic transmission will enable us to pick more items faster by grouping multiple pick orders into one trip through the warehouse.
We reduced hardware costs by maintaining fewer handhelds that users share. We have 24 wireless handhelds, of which 14 are allocated for par and cycle counting and 10 for future warehouse uses. Previously, we had 21 handhelds for par and cycle counting. Improved tracking of individual employee productivity also allows supervisors to use this information for scheduling and employee evaluations.
Mobile Strategy: Part Two
We learned several lessons throughout this process that we will apply to future implementations. For example, we would build more time into the wireless network rollout for planning and testing user security and system access. We also will better anticipate our employee communication and training needs as staff adjusts to new processes driven by mobile applications, such as changes in inventory batch processes and par area or count list downloads.
We continue to seek ways to use wireless technology as the foundation for business process improvements that ultimately impact patient care. For example, we are reconfiguring workflows to reallocate employees’ “found” time and have begun using par data reports to analyze item usage trends and prevent wasted or expired items.
In 2006, we hope to extend our mobile strategy by replacing our physical inventory with true cycle counts, enabling three to four automated inventory counts a year. We also plan to implement the application’s “pick for par” feature, allowing staff to pick supplies from smaller distribution areas versus waiting for warehouse shipments. Finally, we plan to implement the Lawson Receiving and Delivery application to drive additional process improvements within our central warehouse.
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© 2006 Nelson Publishing, Inc