Lean Six Sigma Process Results in Lean Approach to Inventory Management, Driving Nursing Satisfaction and Supply Cost Reduction

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1 Lean Six Sigma Process Results in Lean Approach to Inventory Management, Driving Nursing Satisfaction and Supply Cost Reduction Friday, January 23, 2015 Matthew Brennan Director, Supply and Logistics Penn State Hershey Medical Center

2 Objectives What benefits can be achieved by implementing a Lean Six Sigma approach to continuous improvement with nursing staff? Understand inventory management approaches and determine how to select an approach that meets the specific needs of a department or area of your hospital Evaluate less expensive methods of replenishment for less expensive/commodity products

3 Technology Trends Cloud Computing Big Data Smart Device Technology RFID Kanban (2-Bin & Watermarks) Toyota in 1953 Harley Davidson

4 Cloud Computing

5

6 Background Information - ER Level 1 Trauma Center 52 Beds 12 Observation Beds ~ 200 Visits / Day 72,000 Visits / Year Maintain a fleet of 3 Dauphin helicopters Certified Ebola Facility

7 The Problem The department has evolved over time as far as how it is utilized as well as staffing mix The system of stocking has not changed to keep up with the department The department has grown significantly but storage space has not Lack of well stocked supplies leads to higher costs, more time and energy spent, and lower staff morale Highest RN turnover rate in the Medical Center

8 The Cost Average of 2hrs 14mins spent by nursing (per 12 hour shift) stocking rooms and carts Approx. $353,000/year paying nurses and ER techs to stock 52 Pyxis machines in the ED $300,000/year equipment leases $70,000 in line charges in 1 year

9 RN Satisfaction Survey Neutral, 5.97% Disagree, 1.49% Agree, 92.54% Agree Neutral Disagree The current stocking process NEGATIVELY impacts patient care

10 S&D Satisfaction Survey Agree, 9.00% Disagree, 91.00% Agree Disagree I am content with the current format of stocking the Pyxis machines in the ED

11 What we Did Emergency Department Supply Chain Redesign Lean Six Sigma Kaizen Event - December 2012 Pilot February thru April 2013 Team Included: Nursing Supply & Distribution Administration Black Belt Consultant

12 Flow Chart ED Supply & Distribution

13 The Solution White Side pilot (Busiest of 7 care areas) 60 days, starting in February, 2013 Remove 11 of 13 Pyxis cabinets Replace with closed 2-Bin cabinets Scan empty bins by 11 AM, replenish by 10 PM Successful interventions will move to entire ED Additional components to improve efficiency

14 The Solution

15 Results Decreased number of Pyxis machines Decreased line charges Decrease clutter in rooms Eliminates over stocking Improved efficiency of stocking process Increased nursing and tech satisfaction Improved patient care

16 Kanban Types

17 Flexibility of 2-Bin Kanban

18 Supply Removal From Kanban System Easy as 1 2 3

19 Bin Refill of the Kanban System Used the last item in a Bin? Place empty bin on TOP shelf. Pull second bin from the back to the front of shelf.

20 Visual Item Management Shelf Labels Examples

21 Visual Cart Management Cart Signage

22 Visual Bin Management Visual indicator linking bins with Item categorizes.

23 Mistake Proofing 4 Most Common Errors Solved by Kanban 1) Counting 2) Data entry 3) Decision making 4) Stock rotation

24 K I S S eep t imple olution

25 What s in the barcode? Barcode on Label Contains Supply Location Product Identifier (Lawson #) Fixed Replenishment Quantity A or B Bin

26 Simplifying the DATA

27 Efficiencies Gained Fixed quantity replenishment Fewer SKUs ordered on a daily basis Reduced touches by staff Eliminated cycle counts within PAR areas Eliminated data entry errors Reduced nursing time Reduced restocking time for staff Fewer stock-outs (1.5%) Improved Pyxis compliance ( 74% to 97%) Improved nursing engagement

28 Nursing Engagement Unit: Timing Week 1 Week 2 Week 3 Week 4 Dates Assigned Communication Plan for 2-Bin Kanban Implementation Leadership Contact Name: Tasks/Events Supply & Logistics Ownership Nursing Ownship Meeting - Introduction to Kanban and Assign Ownerships Appoint Key Nursing Contacts for Item Layout Assistance Date Completed Completed By A.R. required required required P.B. required required required Meeting - Kickoff Meeting with Nursing Team J.H. & S&L Install Team required required required Meeting - Obtain Approval for GO-LIVE Date (layouts reviewed) J.K. required required required Communication - Post signage of GO-LIVE Date J.K. required required Communication- staff of outcoming install Communication - PowerPoint is pushed to Nursing Staff J.K. J.K. required required GO-LIVE J.H. & S&L Install Team required required required Communication - Post signage for NEW PROCESSES J.K. required required Meeting - Post GO-LIVE J.H. & S&L Install Team required required required Data - Reviewing/Updating PAR's P.B. required required required Nursing Approval for GO-LIVE: Date: S&D Approval For GO-LIVE: Date:

29 Timetable (Timing is everything) 2012 PSHMC hires CNO (Black Belt from Sisters of Mercy, St. Louis) 2013 She has strong ED background and wants Supply Chain to collaborate with Nursing to de-clutter and streamline process Contract Black Belt and completed December LSS Kaizen event February through April, Pilot Successful June through October, ED Completed November, Implement Jumptech Cloud Solution 2014 February through October, Both Hospitals All Nursing Floors Completed (74 Total Locations, 24,648 Bins) 2015 OR, Cath Lab, EP Lab, Interventional Radiology: Hybrid Solutions (Pyxis, 2-Bin, RFID)

30 Observations & Pitfalls Clinical staff removing bins to restock areas in their units Clinical staff relocating bins Bins not placed on top shelf Supply staff scanning partially full bins Just to be safe Top shelf of each cart is for empty bins ONLY

31 Frequently Asked Questions Why don t you like Point of Use cabinets? Why didn t you just use RFID throughout? What impact does 2-Bin have on supply consumption? Does your Days On-Hand inventory change? Do you have 7 Days/Week deliveries? Why do you visit each supply location twice/day, is that lean?

32 Questions Matt Brennan Director, Supply & Logistics Penn State Hershey Medical Center (717)

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