For Improved Efficiency, look at the supply Chain and Outsourcing Management

Transcription

1 For Improved Efficiency, look at the supply Chain and Outsourcing Management SESSION 6 : ALTERNATIVE FOR APPROPRIATE HEALTHCARE MANAGEMENT Maurice Rizkallah Certified Supply Chain Professional APICS On the 25 th of November 2014 Medhealth - Beirut

2 Definition According to the Joint Commission International The steps in moving a finished product from its source to its customer

3 Definition THEORETICALLY Supplier Warehouse PRACTICALLY Medical Floor

4 Definition The Supply Chain Management is the science of having RIGHT Product How much does it really cost? RIGHT Time RIGHT Place RIGHT QTY RIGHT Cost

5 Cost Definition COST of Handling COST of Sourcing COST of Return Total Supply Chain Cost

6 Cost Definition Handling Cost Receiving Orders from Supplier Sourcing Cost Reviewing backorders Return Cost Return inappropriate product to warehouse Order delivery warehouse to medical service Searching for alternative supplier Return inappropriate product to supplier Evaluating products of new suppliers Issuing Purchase Orders

7 Facts & Numbers For every 1$ we spend on medical supplies, we spend 2 cents on administrative processes $1,200,000 $1,000,000 $1,000,000 $800,000 $600,000 $400,000 USD Spent Cost / $ $200,000 $- Processing Cost $20,000

8 Facts & Numbers Cost of controlling backorders : 5USD/Order Cost of Orders rework: 30USD/Order 3% Orders Delivered 46% 51% Complete Orders Back Orders Rework

9 Facts & Numbers $17, # Orders $6,000 Cost Backorders Rework

10 Facts & Numbers Cost of ONE Order Replenishment = 4 USD/Order $64,000 Diaily Replenishement Total Count/Year Total Cost/Year

11 What is required? Right Supplier Reduce Cost Right Process

12 The RIGHT Supplier Implementing Strategic Sourcing Strategy To reduce procurement and excess inventory costs Support a patient-focused service for quality Improve continuously (eliminate constraints)

13 The RIGHT Supplier Benefits of Strategic Sourcing Traditional Purchasing Strategic Sourcing Focus Purchase Price True Cost (ABC costing) Transactional Collaborative Business Boundaries Never Crosses Opportunities for realigned and collaborative process, data flow and workflow Visibility Internal Entire Supply Chain

14 The RIGHT Supplier SILOS Supplier Purchasing End User Collaboration Supplier Purchasing End User

15 The RIGHT Supplier Near Future Strategies Vendor-Managed Inventory (VMI) in this model, vendors, through mutual agreement, have access to customers inventory and transactions. Vendors are responsible for maintaining the inventory level required by the customer. Outsourcing Inventory

16 The RIGHT Supplier Reduced inventory Increased Velocity VMI Success Reduced TSCC Shorter Lead Time Reduced Out of Stock

17 The RIGHT Process Continuous Improvement to eliminate waste Waste Any Activity that doesn t add value to the good or service in the eye of the patient Special management tools to eliminate waste: Just-in-Time (JIT) Lean management

18 The RIGHT Process Just-in-Time (JIT) The primary elements include having only the required inventory when needed; to improve quality to zero defects, to reduce lead times and rework

19 The RIGHT Process JIT principles JIT Benefits Eliminate waste Eliminate variability Pull instead of Push strategy (Kan Ban) Cycle time reduction Inventory reduction Labor Cost reduction

20 The RIGHT Process Kanban System It is a pull system. It means display card in Japanese - It is a replenishment system that synchronizes the customer s requirement through the plant and to the suppliers - Order preparation should start only when a Kanban card has been issued - The movement of Kanban cards depends on the number of containers for each component and the timing of when to deliver the card to the upstream facility

21 The RIGHT Process Lean Supply Chain thinking Lean principles Eliminate activities that don t add value Employ multiskilled employees in teams Develop Lean suppliers Lean Techniques Value Stream mapping Map 1: All Steps Map 2: Value-added steps only Kaizen event (blitz) Rapid improvement of limited process area Beginnings of TQM initiatives

22 Limitation Beware of conflicting between waste elimination and low quality services Beware of conflicting between JIT techniques and very low inventory levels especially for critical medical supplies, the result can be fatal

23 Conclusion Choosing and collaborating with the right supplier can make the difference Controlling purchasing processes and eliminating waste can reduce low quality services The Supply Chain can be easily management once the chain master gain visibility over the entire process

24 Thank you