Integrated Supply Chain Management (iscm)
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1 Integrated Supply Chain Management Local Health Integration Network of Erie St. Clair Warren Chant Chair, iscm Steering Committee President & CEO, Leamington District Memorial Hospital SWO Regional Partnership Leadership Forum September 14, Integrated Supply Chain Management (iscm) Definitions Supply Chain Management Supply Chain Management refers to the full range of processes that manage the flow of goods & services, information and dollars between suppliers, customers and end-users, as well as the supporting infrastructure required to enable these processes. Integrated Supply Chain Management (iscm) iscm refers to tight supply chain collaboration among multiple organizations, ideally with a single, focused entity responsible for managing the associated people, processes, information & infrastructure Leading Practice A leading practice can be defined as any application of process, technology or people practices that allows organizations in a specific business context to function as efficiently and effectively as possible OntarioBuys 1 1
2 OntarioBuys Integrated Supply Chain Management Framework Plan Source & Move Pay Procure processes to business physical financial manage demand processes processes, processes, for products & including from the including services contracting, supplier to the payment, ordering & expediting end-user rebates OntarioBuys 2 e-supply Chain Project 3 2
3 Erie St. Clair LHIN Integrated Supply Chain Vision The vision for iscm is centered on: To transform current practices using technology as the enabler To view the processes & activities within supply chain as an integrated process To focus on meeting the needs of our internal stakeholders through a commitment to customer service To reduce the total cost of supply chain (product & process) to the system To build the partnership on a foundation of trust & a recognition of our individual contributions 4 The Erie St. Clair LHIN S vision for iscm spans the full continuum of services from procurement to payment and is depicted graphically below. Plan Source Manage Deliver Demand Planning Select Supplier Process Order Pay E-Commerce Supplier Receive Warehouse Sterile Goods & Services Process OR Distribute to Supply Designated areas Product Standardization/Vendor Consolidation Supplier Management Product Management Policies & Procedures Warehouse Management Inventory Management Performance Measurement Legend Operations Management 5 3
4 Hospital Conceptual Future Model: Integrated Supply Chain Model Suppliers & Distributors Banks Manager Supplier Bank Purchaser SSC Bank Strategic Procurement Customer Service Shared Services Information Management & Analysis 6 Current State - Future State Current Environment Each individual hospital or hospital group, are purchasing, storing, and distributing like products Variable pricing across region Limited use of ecommerce Manually intensive payment process Limited reporting capabilities for analysis Manual contract management Standardization occurring for individual purchasing groups, but not regionally Traditional inventory management methodology, inability to react quickly to demand variations Integrated Supply Chain Model Plan regional approach to determine product requirements Contract consolidation with standardization a key consideration Source Implement vendor certification and performance measurement program Leverage aggregate purchasing power Implementation of system enablers for purchasing and accounts payable for seamless transactions E links to vendors for contract management and product updates. Manage Implement system tools for warehouse which supports stockless inventory system with JIT delivery to user departments Deliver - Implement reporting tools that provide real time consumption data as to provide improved service to ends users Standardization - Broader approach to standardization, develop regional product standardization framework One regional group purchasing organization Practice standardization for product use a key considered across region for long-term savings Future Potential: Optimizing iscm Ability to adopt new technologies as developed i.e. supplier bar codes for tracking purposes Payment on receipt of product Expansion of vendor managed activities based on technology advancements and built in controls 7 4
5 Areas of Opportunity Transforming existing transactional practices into automated processes to provide increased capacity for customer service and strategic investments, e.g. full cycle EDI, customized vendor catalogues, real time transactions, and full deployment of electronic requisitioning Integrated product evaluation & selection Improving the efficiency and management capabilities related to inventory management and goods distribution practices to increase patient and staff safety in the handling and use of products. Transitioning vendor relationships from short-term contracts to longer term relationships. Creating a new environment for staff to grow and develop in a centre of excellence for supply chain services. 8 SAVINGS ESTIMATE Annual Savings Estimate Product Pricing & Standardization Completed to Date $1.5 million Projected- To be determined through Implementation Analysis $1.0 - $2.0 million Total Savings Operating Costs $1.0 million $1.0 - $2.0 million Total $2.5 million $2.0 - $4.0 million $4.5 - $6.5 million 9 5
6 Benefits Patients: Improve patient safety practices through standardized product usage, adoption of leading practice, infection control practices, etc. Clinicians: Improved process for product acquisition and goods distribution will reduce clinician time spent on non-clinical workload. Product and practice standardization could eventually be expanded to other healthcare sectors in the region i.e. CCAC, Emergency Services, Canadian Mental Health, Long term care organizations and eventually the municipalities. Providers Staff: Improved process for product acquisition and goods distribution will allow staff to focus on their work rather than the business of requisitioning and monitoring of supplies. Supply Chain Staff: The integrated model will provide a centre of excellence for supply chain practitioners to grow in their individual competencies and will provide a more robust career Local Community: A redirection of resources from the total cost of goods (pricing and process costs) will provide for more resources to be focused on the provision of patient care, Vendor Community: A shift to strategic sourcing, this will provide a forum for improved vendor relationships, reduction in total supply chain costs for all parties, and increased accountability for vendor partners. 10 Progress to Date April 6, 2005 LHIN 1 CEO meeting (CFOs, Directors of Materiel Management) Perspective from hospital Director of Materiel Management Steps & Requirement from OntarioBuys (O.B.) Go/No Go Decisions April 18, 2005 April 18-30/05 Letters of Commitment Formation of Project Steering Committee & Working Group May 13, 2005 Feasibility Study submitted to O.B. 11 6
7 Progress to Date cont d June-July, 2005 August 2005 September 2005 October 2005 Discussions with O.B. & revisions Develop Transfer Payment Agreement Approval of Project & Transfer Payment Agreement RFP for consultants on Implementation Analysis 12 PARTICIPANTS Bluewater Health Chatham-Kent Health Alliance Public General Hospital St. Josephs Hospital Sydenham Hospital Hotel Dieu Grace Hospital Windsor Regional Hospital Leamington District Memorial Hospital Chatham/Kent & Sarnia-Lambton CCAC Windsor/Essex CCAC Essex County Long Term Care Administrators Municipality of Chatham-Kent CMHA-Windsor-Essex Branch CMHA Chatham-Kent Branch 13 7
8 STEERING COMMITTEE 1 Hospital CEO Chair 1 Hospital CFOs (Windsor, Sarnia) 1 Hospital Dir. Materiel Management (Chatham) Chair of Working Gp 1 Windsor Long Term Care CEO (Chair from LTC Association) 1 Windsor/Essex CCAC CEO 1 Chatham/Sarnia CCAC CFO 1 Director Senior Services, Municipality of Chatham Kent WORKING GROUP 5 Hospital Director Materiel Management Chair from Chatham/Kent 1 Corporate Services Manager, CMHA-Kent 1 Purchasing Manager, Municipality of Chatham/Kent 1 CFO, Windsor/Essex CCAC 14 Implementation Analysis - Deliverables Business Case Development For Supply Chain Transformation: Erie/St.Clair iscm Vision Summary of Current Environment Operating Model Benefits Evaluation Implementation Assessment Implementation Roadmap - Warehousing Plan Systems Requirements Transportation Plan Integration Plan Human Resource Plan Total Project Costs 15 8
9 Discussion 16 9
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