Our client is a leading academic medical center, affiliated with Harvard Medical School. This 777-bed hospital has been ranked in US News and World Report’s Honor Roll of America’s as best hospitals for 11 consecutive years.
The academic medical center’s surgical services department has 39 operating rooms, with 80 inventory control points maintained by 30 staff members dedicated to materials management. Increasing operating costs required the hospital to evaluate internal departmental budgets to identify opportunities for saving and efficiencies.
With material expenditures climbing, hospital executives were interested in re-evaluating opportunities to better control costs in this high-spend area. Tefen was engaged to improve the hospital’s supply chain and materials management within their surgical services department.
The project was structured in a two-phase approach that included an in-depth diagnostic and a hands-on implementation. The team assembled included representatives from the OR’s materials management group, nursing representation, representatives from the Center for Clinical Excellence, and managers of the Surgical Services.
During the diagnostic, the group reviewed the 12-month historical spend of disposables and implants, and identified that 251 disposable items of the total 7,700 items purchased accounted for 40% of the total annual spend of the department. It was evident that focusing on a small number of items ensured higher success by better regulating flow of these materials into the OR area, as well as managing them throughout the year.
During the implementation, the team focused on re-rationalizing distribution processes within the OR area. Several inventory control locations were eliminated, while others were consolidated. Furthermore, par levels were redefined to match consumption levels to ensure that inventory on-hand was not excessive, while guaranteeing sufficient safety stock for unexpected fluctuations.
Staffing patterns and schedules were recreated for the materials management group to utilize resources at the appropriate timing. For example, minimal support is required for stocking supplies inside the ORs during the day, as rooms are occupied for surgeries during that time. Instead, schedules were designed for higher staffing levels during the evening and night hours to utilize off-hours to perform behind-the-scenes work.
Standardization of materials across the ORs was a major initiative. Benefits extend to both clinical and materials management staff members; Nurses who operate in different rooms every day can expect to find the same type of supply in the same location, regardless of the specific room they are occupying at that time. The replenishment process is more accurate - and handled faster – when the materials management staff members have one standardized configuration for each room to stock supplies.
The collaborative work between Tefen and the client benefited three main categories: Process improvements, culture, and finance.
Process improvements increased reliability and efficiency of the supply replenishment process. A ‘Count-Write-Retrieve-Stock’ method was introduced, using revised and standardized stock sheets. Adjusted par levels with fewer inventory control locations alleviated the complexity of managing a high-pace surgical services area.
Culturally, the improvements increased the trust between clinical and materials management groups, reducing the typical tendency to hoard supplies. Stocking to the maximum possible was no longer necessary once the clinical staff was comfortable knowing that supplies will be there when required.
Financially, new processes and solutions allowed the hospital to save approximately $500,000 through better distribution, par level redefinition, and staffing in its OR materials management group.