Supply Chain Transformation
Hospitals must accomplish high reliability in providing the right equipment and supplies to each point of use; at the same time they are under financial pressure to achieve higher value at lower cost. Often they are hindered by limitations of financial data or the materials management information system (MMIS). Our assessments typically show expense reduction opportunities in one or more sectors and highlight the process issues blocking “best practice” performance. But materials managers and administrators are buffeted by conflicting pressures in a complex environment. It can be tough to get beyond the “low hanging fruit”.
RDA approaches the supply chain as a system with five major components. We evaluate how current performance compares to best practice characteristics for each component and how process enablers, like information systems, help or hurt. Several of the major components are briefly discussed below with factors critical to process innovation. We also evaluate quantitative performance against top quartile peers. We then prioritize the process issues causing low reliability or high cost so that client efforts are focused on the most important initiatives.
Purchasing and Contract Management represent one SC system component. Actually most clients are already doing very well in this sector – particularly with commodity pricing and GPO leverage. The challenges tend to relate to clinical preference items discussed under Value Analysis.
Inventory Management is another component. Performance in the storeroom and pharmacy is often very effective. The challenge is extending, with a strong MMIS and even stronger executive leadership, managing of all inventories to physician-centered functions like OR and Cardiology. Here RDA often teams up with internal leaders – training them, upgrading use of MMIS features, linking performance to initiatives led by physician champions, and integrating outcome measures to balanced scorecard tracking.
Clients who have scored home runs focus on a combination of physician led Value Analysis and Clinical Resource Management (CRM). Typically initiatives are specific to medical staff specialties and require both strong internal resource persons and adequate information for lasting results. An article co-written with one such client was recently published by AHRMM after presentation at our national meeting. Write bob@4rda.com for a copy.
Transforming supply chain processes is essential to achieving BOTH satisfied users and lower expenses. Optimizing underlying enablers, like the MMIS, is critical to innovating processes. RDA creates the plan and guides your executives to top quartile performance.