Inventory Control

July 1, 2006

Bar codes and wireless technologies help Gundersen Lutheran Health System manage its supply chain.

From trays filled with surgical instruments in the OR to rolls of gauze bandages in the ER, mission-critical supplies must be available when needed. But unless a hospital has a reliable materials management system in place, tray loading errors and inventory shortages are bound to occur.

Bar codes and wireless technologies help Gundersen Lutheran Health System manage its supply chain.

From trays filled with surgical instruments in the OR to rolls of gauze bandages in the ER, mission-critical supplies must be available when needed. But unless a hospital has a reliable materials management system in place, tray loading errors and inventory shortages are bound to occur.

To reduce errors and shortages, Gundersen Lutheran Health System in LaCrosse, Wis., invested in modular software solutions from St. Paul, Minn.-based Lawson Software. Jan Jarvinen, director of materials management at Gundersen Lutheran, says the first module rolled out was the Surgical Instrument Management (SIM) application, followed by Lawson’s Par and Cycle Counting system. Interestingly, the SIM product actually was purchased in 2003 from another vendor, which was subsequently acquired by Lawson, he says. “Lawson kept the name of the software and added enterprise features.”

Gundersen Lutheran already had established a working relationship with Lawson, having installed its General Ledger, Human Capital Management and Materials Asset Management systems, so adding other software solutions was no problem.

Tray-tracking Challenge
One of the largest group medical practices in the country, Gundersen Lutheran operates a 325-bed teaching hospital as well as community clinics and pharmacies serving western Wisconsin, northeastern Iowa and southeastern Minnesota. But with an increase in demand for surgeries and with the threat of rising costs, greater efficiencies had to be achieved, especially in surgical instrument management.

Jarvinen admits that the old method of assembling and tracking trays was antiquated. “The system was a manual catalog system,” he says, adding that the number of catalogs required for the 760 to 790 instrument-filled trays took up all of an 8-foot-long shelf.

Because the type and number of surgical instruments can vary widely from tray to tray, with the average running between 59,000 and 73,000 per week, the sterile processing department staff relied on paper records filed in these three-ring binder catalogs. Changes made to any tray were recorded manually. Since surgeons use instruments in a specific order, the placement of these instruments in each tray has to reflect that order. To ensure the proper order, photographs also were included in these binders. Otherwise, “the techs would never be able to memorize them all,” Jarvinen says.

However, missing or wrong instruments in trays often resulted in time-consuming searches that the organization estimated cost about $40 per minute in surgery delays.

At first, the staff of 34 techs exhibited some resistance to a computerized system. “Change is hard,” Jarvinen says. “They had computer phobia. We started with a one-month pilot program, and once the pilot was done, we jumped right into it.” The hospitalwide roll out was completed in early 2004.

Results to Brag About
The Lawson SIM is a Web-based, wireless system that uses bar codes and an automated database for managing all trays and instruments. Since every tray is now bar coded, techs can scan the tray and view detailed instructions on what instruments are needed and how to sterilize and process each tray. “Being wireless allows you to bar code them at any location, although we have a workstation at the point of assembly,” Jarvinen adds.

In the assembly area, where the trays are filled and wrapped, they are labeled with individual bar codes. In the staging area, where they are batched into sterilization lots, they are wirelessly “wanded” with a bar-code reader. When they are put into inventory, they also are wanded. Finally, when they are put on the case cart to be sent to an OR, they are wanded again. Although some surgical instruments can still be misplaced or pulled from the inventory for repair, Jarvinen says Lawson is working to remedy that problem.

“Lawson is upgrading the system to include bar codes on each instrument by using microdots or laser etching.”

However, there could be a downside to this solution. Given the thousands of instruments in each tray and an average weekly tray count of between 3,700 and 4,000 at Gundersen Lutheran, having to wand every instrument could be very time consuming. “The best solution would be to use RFID,” he says.

Still, the use of wireless bar-coding technology to track surgical instrument trays has paid off. Overall efficiency rose by 7 percent, and the system has increased look-up speeds by creating a time-stamped audit of each tray which even shows who assembled the tray and in what sterilization load it was run. Trays that are missing instruments are easy to spot because they are labeled with an “exception tag.”

Labor productivity rose too. Only 12.2 percent of comparable institutions now have a better labor productivity ratio, based on hours worked per 100 items processed. The completion rate for fully assembled trays, which once stood at 84 percent, is now at 98 percent and rising. “It’s all due to the ability to manage the data,” Jarvinen explains. He says that the next step greater efficiency will be to “automate the ordering of trays through the OR scheduling system, so orders will be able to be filled on demand.”

Managing Par Areas
Next, Gundersen Lutheran turned its attention to par area management. To shorten the time needed to fill par requisitions while improving the accuracy of picks for its par locations, the organization again looked to Lawson.

A year and a half ago, Gundersen Lutheran rolled out Lawson’s Par and Cycle Counting module, which uses paperless processing through bar code scanning. Its mobile technology platform, which supports multiple transmission modes including real-time wireless, intermittent wireless and cradle-based synching, uses the Microsoft Windows CE operating system in conjunction with wireless (802.11b) technology that provides 128-bit encryption. “It’s a totally paperless, hands-off system,” Jarvinen says.

Keeping track of items that are used every day and being able to reorder them before their supply dwindles is good business. But products that are already expensed to departments, ranging from expectorant trays to rolls of bandages, are typically sent from central supply to each department as needed.

Counting inventories takes a lot of time if done manually and increases the likelihood that counting and stocking errors will occur. Gundersen Lutheran wanted a way to automate par counting processes and speed the transmission of requisitions for par locations to its off-site corporate distribution center where inventory is consolidated.

Lawson’s Par and Cycle Counting system allows the use of wireless hand-held devices at critical points in the supply chain, thereby speeding up both counting and picking processes and allowing information to be transmitted immediately.

When items are entered into the inventory database, a bar-code label is printed and affixed to the item location, making the tracking and ordering of items faster and easier. “To take an order at a par site, you just press a button on the handheld and it’s automatically queued to supply,” Jarvinen says.

In the warehouse, where wireless handhelds also are used, the staff not only can see what items are being ordered, but can automatically pick the number of items needed. “Then they push a button and it tells them that they have replenished the par,” Jarvinen says. Gains in efficiency are further enhanced because the Lawson system downloads to the handheld a complete list of par areas that need counting. This gives users the flexibility to create individual short lists of par areas to manage and allows users to scan bar codes or enter item numbers in any order.

Since implementing the Par and Cycle Counting solution, Gundersen Lutheran has cut the time needed to count par areas by 50 percent. A job that used to take 30 minutes now takes only 15 minutes, Jarvinen says. Additionally, the organization has dramatically reduced data entry errors and has increased the accuracy of picks for par areas. The system also allows managers to analyze staff productivity by identifying which areas were counted by each user, how many bins were counted and when.

Gundersen Lutheran not only orders its inventory supplies with handhelds, it also orders vendor-direct products with them. The software tracks all the items currently on order and displays that amount on the handheld. That way, the operator can skip an item if the current on-order quantity would be sufficient to replenish the quantity needed. The organization also can order extra quantities of an item above and beyond the recommended par level. With this feature, an item that is totally out of stock can be replenished with additional quantity above the par level to help avoid reordering that same item immediately after receipt.

Jarvinen says the third module in Lawson’s Mobile Supply Chain Management series is being budgeted for next year. The Receiving and Delivery module, which also uses bar coding and wireless technologies, will facilitate the tracking of all products from the time they are delivered. “When a product comes in, you use your handheld for receiving that product,” he says. “It’s a continuation of the UPS (United Parcel Service) system, so the person who ordered the product can sign off on it.” Because the Receiving and Delivery system not only uses bar codes but also creates a time-stamped audit, it will be easier to track materials flow throughout the institution, Jarvinen says.

“Finally, we’re seeing tools that can improve efficiencies and data management,” he adds.

For more information on Surgical Instrument Management and Par and Cycle Counting systems from Lawson Software, www.rsleads.com/607ht-207

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