Smart Use Inventory Management solution at the Royal Shrewsbury Hospital Pathology Service Delivery Unit
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1 Smart Use Inventory Management solution at the Royal Shrewsbury Hospital Pathology Service Delivery Unit The Shrewsbury and Telford Hospital NHS Trust identifies efficiency savings, process improvements and improved customer service within the Pathology Service Delivery Unit by trialing the Smart Use flexible Inventory Management solutions. 1. Introduction Adrian Bradshaw, Associate Director Operation (Supply Chain Development) of Healthcare Purchasing Consortium (HPC), is actively involved in identifying supply chain improvements in a number of NHS Trusts. As part of his role, he and Trust Colleagues identified a need within the Pathology Service Delivery Unit (PSU) of The Shrewsbury and Telford Hospital NHS Trust for an Inventory Management solution. Adrian introduced Smart Use as a specialist solution provider in Healthcare Supply Chain Management to Chris Crosby Manager of the Pathology Service Unit, (PSU) with the intention of monitoring the performance of Smart Use as a potential future solution for NHS Trusts. 2. Background The Shrewsbury and Telford Hospital NHS Trust is the main provider of acute hospital care across Shropshire, Telford & Wrekin and Mid Wales. The Trust is very forward thinking in its outlook and has recently achieved teaching hospital status. The Pathology Service Unit for the Trust serves 500,000 people from 2 stores, across 3 sites. One of the Trusts overall objectives is to modernise working practices and create efficiencies. The Trust is advocating deployment of Lean Principles to meet these objectives. Materials management as part of supply chain management is a key area currently under review. 3. The Challenge The Divisional management board had recognized that there were stock control problems in their dedicated stores. The stores served both the Trust s internal wards / departments alongside the distributed healthcare community of GP surgeries, prison hospitals, clinics, district hospitals and care Page 1
2 homes. It was clear that all of PSU s customers, in particular and the distributed healthcare community were holding far more consumable stock than was required. The board, had identified a need to introduce an e solution for the management of the stock coming through the Pathology Store. One catalyst for change came following the recall of unused blood collection consumables. The quantity of consumables returned was found to be far in excess of the level that had been predicted from a review of stock records, indicating overspending and unnecessary stockpiling, outside of the stores direct control. The Pathology Service Delivery Unit was therefore chosen as an ideal environment to trial the Smart Use System. The main drivers for the implementation of the system within PSU were tangible benefits against which direct savings could be measured. These included: Controlling the issue of all stock from the Stores area through restricting entry, reducing the number of issuing streams and improving Stores security. Reduce stock levels, volume and value within the Stores area Control and monitor the issuing of stock to users (principally those in the distributed healthcare community) to minimise waste, discourage poor stock-rotation and provide users with the stock they need, when they need it. Use the information generated by the system to compare the issuing of stock to a point of use with the activity at the point of use. Achieve efficiency savings from stock holidays and recurring savings from working more effectively. The lack of stock visibility and stock accuracy also meant that the stores were very busy with clinical staff trying to locate stock, looking for deliveries, checking stock or making enquires. The initial Smart Use review, confirmed by PSU, estimated these activities to cost the Unit 880 man days per year. Therefore having access to an accurate stock position at all times, as well as having an easy means of reporting stock levels to the clinical teams, was an important requirement. The stores area itself was far from ideal being a converted corridor area with multiple access points and no adequate goods receipt facilities. An additional incentive to rationalise store processes, came in the form of a trust wide imperative to reduce stock levels, of which the PSU stock reduction target was 100,000 for 2009/10. Although the main drivers for the implementation of the system within PSU were tangible benefits against which direct savings could be measured, it was considered equally important that the project deliver other softer benefits throughout the hospital in terms of improved job satisfaction for staff and better service levels for the user departments. Key to achieving this goal was for the stores team to work more effectively through better organisation of the Stores area and, in addition, by changing from a reactive to a pro-active approach to managing the area. Page 2
3 4. The Smart Use approach Smart Use offers flexible solutions which, in addition to providing appropriate software and hardware combinations, also address the organisation and management of physical stores. The starting place was an Initial Process Review which involved interviewing both store staff and key heads of departments within the unit, to understand exactly how and why the unit managed it s inventory, as it currently did. This review enabled Smart Use to identify where changes to working practices would enable the department to meet increased throughput, driven by the growing demands of the primary care community, without additional staff numbers. Smart Use recommended which of its software and data capture devices were appropriate in terms of cost and functionality, as well as recommending changes to working practices and configuration adjustments to store layout and processes. One of the key early recommendations was the physical reorganization of the stores with clearly labeled bins and zones, with defined goods in, and returns area. 5. The Solution Obtaining valid data to populate the Smart Use, database was an initial fundamental issue, as there was no central repository of data. The Trust used Oracles procurement system, but as most orders were free texted into the system there was no ability to extract data from this system. The data had to be generated from a spreadsheet that stores had and manually input. Units of issue and storage had to be assimilated. The stores then had to stock take to establish a starting position for the system A further data element was establishing a list of all the stores customers and other supply chain links with other departments and stores in the Hospital. Most of this data was extracted from the telepath system, (Pathology Test tracking solution) so producing a common coding system to cross reference to tests consumed. The financial coding structure was replicated, to allow the unit to report on stock usage on the same financial coding structure system, and vendor details were extracted from Oracle. The sales order entry module of the package was implemented to provide an order taking and dispatch function for the distributed community. Smart Use identified that this would allow the Unit to later have the distributed healthcare community place orders via Intranet with a direct integration to the solution (a potential later phase), produce order confirmations and despatch notes if necessary. Additionally, if the Trust ever decided to charge directly for consumables the system could be later used to invoice the customers. In the interim Smart Use developed an average order tool for the Unit that would allow them to send out an average order to their customers once a week, so rationalizing the customer order patterns and providing a better service to their customers. The Unit could also consider closing the small Telford stores and amalgamating the despatch requests from one central stores area. This meant that workforce could be re-deployed. Smart Use designed a dedicated screen for the stores staff, using Microsoft s Role tailored client this helped the staff in training on the system. There were a number of challenges in training as some staff had no IT experience at all before working with Smart Use. Page 3
4 The system provided access to stock information through screen enquiries and key reports, giving all staff the visibility that they needed. Key information was visibility of past events, receipts from suppliers and despatchs to the healthcare community. This data was later analyzed to provide identification of activity levels and resulted in changes to working practices. 6. The Benefits Although the Smart Use project was a trial in the early stages, the implementation already identified potential savings in both cash and efficiency to the Trust of 1m over five years, including year one savings in excess of 120,000, from reducing stock levels To achieve the same level of savings, without the Smart Use solution, will be impossible without a significant increase in staff levels and significantly improved data capture capability The process of implementing the Smart Use system itself identified process and organisational issues that were resolved as part of the project. For example, zoning the stores into A, B, C etc., has meant that there are designated areas to keep certain types of items, eliminating a great deal of wasted time looking for items. Also, by controlling the issue of all stock from the Stores area through restricting entry, the number of issuing streams was reduced and the Stores security was improved. Not only did this reorganisation improve customer service levels, it also made for improved job satisfaction within the stores team. As the trial progressed, it became possible to investigate the data that had built up in the system so that demand patterns could be analysed. The analysis showed that huge fluctuation in both requests for goods by the user departments and deliveries from suppliers. Smart Use advised the stores team that it needed to stop providing on on-demand service and take control of the demand pattern. This was achieved in two areas. Firstly, laboratory staff completes a requisition for the products they needed each morning. The requisitioned products are prepared by the stores team for the collection for the afternoon, thus eliminating the need for either the stores to tour the laboratory to find out what is needed, or for multiple ad-hoc visits by laboratory staff to the stores. Secondly, by giving GP s a standard weekly order of consumables, based on usage rather than ad-hoc ordering, the stores team can prepare the products to be delivered to the GP s in advance of demand, when they have more resources available. In general, user departments are benefiting from the historic information that is being built up in the system. The stores team is easily able to answer queries from the user departments on goods sent out or received by looking up the history of shipments and goods received from the Smart Use system. In addition, departmental heads can analyse the data in the Smart Use system to compare usage, by point of use, with activity, by point of use. The changes implemented as a result of the Smart Use project have also driven efficiency savings: The reduced over-ordering by the distributed health community, by starting to implement a standard weekly order of consumables based on usage rather than ad hoc ordering. This has Page 4
5 reduced workload for the stores and the distributed community by reducing stock holding and the also the numbers of delivery requests processed. Staff no longer need to spend time referring to potentially out of date paper based records or spreadsheets. Instead, Stores and other staff can have full visibility of real-time stock information, via the Smart Use system. Improved stock visibility, stores processes and demand management mean that the clinical staff have less need to visit the stores several times a day The effect of these efficiencies has not only been to improve the internal stores management process, but also to release valuable clinical staff resources. 7. Summary Smart Use recognized that the implementation of Inventory Management solutions can represent a huge cultural change, particularly where working practices have not been changed for a number of years. With this in mind, Smart Use adopted a phased approach, over a number of months, to fully understand and implement continuous improvements in a controlled manner. The Smart Use approach has been a clear factor in the success of the project Smart Use has recognised that one size does not fit all. Software and data capture devices need to be flexible, to adapt to the varied working environments within a Trust. At Shrewsbury, a simple means of capturing material issues at the point of use is required. The utilsation of the sales order entry element of the solution for dispatches to the distributed community as provided detailed information that can be cross referenced to the level of tests run, to test for reasonableness. As stock usage data starts to build up in the system, the management at the trust will be able to benefit from business intelligence, supplier performance analysis and the ability to further optimise stock re-order points, using the Smart Use built-in inventory optimisation routines. In working with Smart Use, the PSU has recognized the potential for further improvements and operational savings and how the adoption of inventory management solutions is core to achieving these improvements. The Trust is considering the feasibility of a Trust wide Inventory solution, and the continuous improvements and savings that can be achieved through the introduction of Inventory management systems as a core element of good supply chain management. Telephone: Website: Page 5
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