build a lean six sigma process for inventory management in hospitals
TRANSCRIPT
Welcome to the Webinar
1
Build a Lean Six Sigma Process for Inventory
Management to Drive Nursing Satisfaction and
Supply Cost Reduction
Presenter: • Matt Brennan, healthcare supply chain expert;
• Senior Healthcare Supply Chain Consultant to Jump Technologies, Inc.
Questions?• Q & A will take place at the end of the presentation
• To submit questions at any point during the webinar, please use the “question” function
CPEs1.0 AHRMM - accredited Continuing Professional Education contact hour
Learning Objectives
• Identify benefits that 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
Emergency Department Background Information
• Level 1 Trauma Center
• 52 Beds
• 12 Observation Beds
• Suburban MSA
• Academic Center
• ~ 200 Visits / Day
• 72,000 Visits / Year
The Problem
• Became the primary Level I Trauma Center within 75 mile radius
• Space / Clutter
• 52 Pyxis cabinets
• 42 supply carts
• Supply boxes in patient rooms
• Poor Pyxis compliance
• Hoarding of supplies
• Little confidence in Supply Chain support
• Highest RN turnover rate in the Medical Center
The Cost
• Average of 2hrs 14mins spent by nursing (per 12 hour
shift) stocking rooms and carts
• Approx. $353,000/year paying nurses and ED techs to
stock
• 52 Pyxis machines in the ED
• $300,000 / year equipment leases
• $70,000 / year line charges
What We Did
Lean Six Sigma Kaizen Event:
December 2012
Design & Evaluate Methodology:
January 2013
Conduct Pilot:
February thru April 2013
Team Included:Nursing
Supply & Distribution
Administration
Black Belt Consultant
What is a Kaizen Event?
Kaizen, also known as continuous improvement, is a long-term approach to
work that systematically seeks to achieve small, incremental changes in
processes in order to improve efficiency and quality.
In a typical Kaizen event:
• Team members meet 5 straight days to overhaul a core work process
• The week begins with just-in-time training in Kaizen methodology
• They map out the current state of the process, analyzing every step to find
all forms of waste: over-processing, delays, loopbacks, handoffs, excessive
inventory, work arounds
• They use their findings to develop a new process that is simpler, faster,
better and more cost-effective
• Action plans address all aspects of implementation, including training and
communication
RN Satisfaction Survey
Agree, 92.54%
Neutral, 5.97%
Disagree, 1.49%
The current stocking process NEGATIVELY impacts patient care
Agree
Neutral
Disagree
Supply Tech Satisfaction Survey
Agree, 9.00%
Disagree, 91.00%
I am content with the current format of stocking the Pyxis machines in the ED
Operational Adjustments
• Chargeable supplies redefined
< $25 = Non-Chargeable (Kanban) 85%
> $25 = Chargeable (Closed Pyxis) 15%
• Non-chargeable supply amount was built into the visit acuity charge
• Pyxis lease was renegotiated
Kanban Choices Evaluated by Team
• Kanban cards
• Divided baskets
• Left to right
• Front to back
• ‘Flipper’ dividers in metal baskets
• Two colored reversible bins (blue/orange, black/red)
• 3 Bin (One in front of the other) empty bin returned to supplier
• 2 Bin (One in front of the other – neither ever leave the location) *
• Watermarks (accommodates items too large to fit in bins) *
* indicates methodologies chosen
KISS - Keep It Simple Solution
• Pilot Study (Busiest of 7 care areas)
• 60 days, starting in February, 2013
• Remove 11 of 13 Pyxis cabinets in the pilot area
• Replace with closed 2 Bin cabinets
• Scan empty bins by 11 AM, replenish by 10 PM
• Successful interventions will move to entire ED
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
Empty Bin?
Key Fob Scanner
• 1 Scan / Second
• Micro USB
• Communication
• Charging (Lithium Ion Battery)
• $96 / each
• No keyboard (no data entry errors)
• Single button scan
• Audible and visible ‘good scan’ verification
Mistake Proofing
The 6 Most Common Errors Solved by 2 Bin Kanban:
1) Decision making (eyeballing)
2) Counting
3) Transcription
4) Data entry
5) Math errors
6) Stock rotation
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New Key Performance Indicators (KPIs)
ARV vs. PRV
• When Actual Replenishment Velocity (ARV) is added to KPIs, and compared to historical
or Projected Replenishment Velocity (PRV), supply staff can focus on the 10-15% of the
stock moving more quickly than expected (greatest chance of stocking out)
• The other end of the spectrum, the 10-15% of stock moving more slowly than expected
• This is the stock that sits idle, with greater chance of expiring
• When managed, it can provide space to increase the quantities of the rapidly moving
stock
• Remaining 70-75% of stock being consumed at the projected rate only needs a simple
barcode scan to trigger an error free order
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Visual Bin Management
Visual
indicator
linking bins
with Item
categories.
Visual Bin Management / Labeling (Kanban)
Efficiencies Gained
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- Fixed quantity replenishment
- Fewer SKUs ordered on a daily basis (40% fewer)
- Reduced touches by staff
- Eliminated cycle counts within PAR areas
- Eliminated data entry errors
- Reduced nursing time
- Reduced restocking time for supply staff
- Fewer stock-outs (1.5%)
- Improved Pyxis compliance (74% to 97%)
- Improved nursing engagement
Bin Capacity Plan
• 2 days / bin X 2 bins = 4 day supply
• Typical Med/Surgical nursing unit
• 3 days / bin x 2 bins = 6 day supply
• Critical Care nursing units
• 1.5 days / bin x 2 bins = 3 day supply
• Monday – Friday, 8 hour clinic locations
Nursing Engagement
Communication Plan for 2-Bin Kanban Implementation Unit: Leadership Contact Name:
Timing Dates
AssignedTasks/Events Supply & Logistics Ownership Nursing Ownership
Date Completed
Completed By
Week 1
Meeting - Introduction to Kanban and Assign Ownerships A.R. required required required
Appoint Key Nursing Contacts for Item Layout Assistance P.B. required required required
Week 2
Meeting - Kickoff Meeting with Nursing Team J.H. & S&L Install Team required required required
Meeting - Obtain Approval for GO-LIVE Date (layouts reviewed)
M.B. required required required
Communication - Post signage of GO-LIVE Date M.B. required required
Communication- Email staff of up coming install M.B.
Communication - PowerPoint is pushed to Nursing Staff M.B. required required
Week 3
GO-LIVE J.H. & S&L Install Team required required required
Communication - Post signage for NEW PROCESSES M.B. required required
Meeting - Post GO-LIVE J.H. & S&L Install Team required required required
Week 4 Data - Reviewing/Updating PAR's P.B. required required required
Nursing Approval for GO-LIVE: Date:
S&D Approval For GO-LIVE: Date:
Before and After
Measurement Before
(PAR Cabinet)
After
(2 Bin)
Customer Satisfaction - 93% +91%
Compliance 74% 97%
Stock Out % 4.7% 1.6%
Lines (SKU’s) ordered / day (avg.) 167 101
Lines (SKU’s) put away / hour (avg.) 68 125
Time to collect replenishment data 14 minutes / location 5 minutes / location
Results
• Decreased number of Pyxis machines
• Decreased line charges
• Decrease clutter in rooms
• Eliminated overstocking
• Improved efficiency of stocking process
• Increased nursing and tech satisfaction
• Improved patient care
Lessons Learned
• Strong executive sponsorship
• Pilot was too successful
•Initial concern that there are “An awful lot of empty bins”
• Orientation for new nursing hires
• Top shelf for empty bins only
• Supply staff scanning partially empty bins – “Just to be safe”
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?