The Importance of Optimizing One’s Supply Chain Management (SCM)

By: Mary Jane Adams

Supply chain management costs are a significant expense to Healthcare organizations.  Improving the process and flow of one’s Supply Chain system will lead to a reduction in supply costs, boosts in revenue, and improvements to the quality of patient care.

Approaching an assessment of an existing SCM system with an awareness of the challenges that can arise is crucial.  The Engage approach has always been to work with hospital management, supply chain staff, and end users to review best practice, capture existing practice, and provide specific workflow processes to drive efficient and effective use of one's MEDITECH system.  In a complex system such as SCM we find it is typically the combination of many small incremental changes, taken together, that provide the greatest gains.

The review process we provide for our customers includes a comprehensive assessment, focusing on key areas of the Supply Chain Management system, providing insight into:

1. Purchase processing:

• Order combining tools to minimize PO’s
• EDI utilization
• Realtime order/backorder status reporting

2. Inventory control focused on streamlining clinical workflows:

• Inventory/supply location relationship
• Inventory asset relationship
• Inventory consolidation via MRP/MSQ based usage
• Inventory accounting
• Proper use of the Exchange Cart method based on the MRP and MSQ
• Stock rotation to minimize waste

3. Patient charge capture to maximizing revenue:

• Cost/value assessment of Supply Stations
• Use of bar code stickers as additive indicators
• Bar code sticker integration with supply chain to revenue cycle processing
• Lost charge capture
• Handheld bar integration with patient charge record
• Utilization of the category markup dictionary
• Standardize on a 3-way numbering schema
• Custom reports to review charge capture information

4. Strengthen interdepartmental supply chain and nursing staff relationships:

• Utilization of electronic requisitions
• Provide standardized item templates
• Combining requisitions to a single PO
• Setup reports to review supply utilization

Reports and strategic dissemination of information is key within any structured organizational system.  With Supply Chain it is imperative to know what you have, what it costs, how soon you can get more, and for all staff to understand the value of managing supply costs.  Staff dedicated to reviewing new inventory items, product changes, and patient charge identification will ensure continued success.  With a few small targeted changes, the ROI can be significant for the organization as a whole.

As Assistant Director of the Financial Systems for Engage, Mary Jane leads a large team delivering quality Meditech Expanse implementations, Supply Chain Review and Assessments, improvement projects, enterprise resource planning (ERP) solutions and is also is a key hospital CFO and hospital Directors liaison. Mary Jane has worked for Engage for 21 years and has a long history of delivering quality solutions and Client deliverables to the many hospitals he serves. Prior to working at Engage, Mary Jane worked for 23 years in numerous Finance positions at a Regional Medical Center where she was a part of the MEDITECH implementation in 1992.