Lawson Healthcare SolutionsOptimization of Key Resources Forms a Foundation for Excellent Patient

Care

Lee Farabaugh, Eric Lott, Tom McLoughlin, Ashwini Patki

Enterprise Resource Management

• Offers solutions to the 3 critical areas of Resource Management:

• Workforce: Lawson Human Capital Management

• Supplies: Lawson Supply Chain Management

• Capital: Lawson Financials

Lawson Supply Chain Management

• Provides the latest inventory management tools to the health care system

• Compatible with U.N. Standard Products and Services Code® (UNSPSC) and GS1

• Leader in industry– 60% of the top 50 Integrated Delivery Networks– 33% market share (hospitals with 250+ beds)– 4,000 customers in 40 countries, including 100 health care

providers• Competitors include IBM/Cognos, McKesson and Oracle

Data Flow

Materials Management is the branch of logistics that deals with the tangible components of a supply chain... this covers acquisition, quality control , purchasing and ordering…, and the standards involved in ordering, shipping, and warehousing. Wikipedia

Traditional/ Legacy Model

• Large Inventory of Items maintained in hospital warehouse and storage areas in hospital.

• Large staff maintains inventory and searches for items as they are requested by units

• ESI/ NOVA software utilized to place orders, manage stock

Process

Users needs→→ Requesting Items

• Tasks– Catalog of items

– Purchase Orders

• Lawson Solution= Materials Management Inventory System (MMIS)– On-line, searchable database

of available items – Detailed descriptions of

products from supplier– Each item contains all

necessary fields to ensure order accuracy

– Every item has an associated vendor contract to ensure pricing accuracy

Requesting Items

Challenges• Disconnect between user

of items and supply technicians

Lawson Solutions = Requisition Self-Service (RSS)• Orders placed directly by

users• Enhances accuracy and

cost control• UAB –

– over 2000 employees trained

– 500 are regular users

Requesting Items- Par Inventory

• Tasks– Establish and adjust par

inventory goals for units and storage areas

– Determine items used on a routine basis

– Place orders to replenish items, i.e. maintain par levels

• Lawson Solution– Maintains electronic

database of par levels– Supports hand held

scanners– Scanners generate

automated orders

Placing Orders

Tasks• Purchase orders faxed to

suppliers

Lawson Solutions• RSS and MMIS support

Electronic Data Interchange (EDI) through Global Health Exchange (GHX)– Enhances productivity – Creates an electronic trail of orders – Facilitates payment– Allows future use of GS1 standards

• Lawson Electronic Fax Integrator

Shipping & Receiving

Tasks• Cross reference items with

orders• Receipt of items from

Cardinal, other distributors and delivery providers (Fed-Ex, UPS, USPS)

• Update Accounts Receivable

Lawson solutions• Electronic matching of

orders and deliveries• Maintains preset palate

unloading by final destination

• MMIS interfaces with UAB Finance’s Oracle enterprise

Distribution

Tasks• Deliver items• Track location of items• Respond to recalls• Monitor expirations

Lawson Solutions• MMIS includes final

destination information on all items

• MMIS identifier specifies deliverey location

• Facilitates locating recalled and expired items

Lawson Materials Management

Visit to Supply Closet

Data entry to Lawson

Handhelds synced with Lawson

Lawson system auto ordering:•Manual order by entering Lawson number• Shopping paradigm to search the product

catalog • Templates based on common product sets

to place standard orders

Handheld Form View

What happens to supplies?

Hi Tech Display

Ease of operation

• Accessibility• Flexibility• Timely delivery• UNSPSC codes: • No special degree/ certification required• Comparatively shorter training• Better reports

Scope of Improvement

• RFID – potential• Visual effects • Ordering specialty items

Literature Review: Patient Safety

Pelletier KD (2009). Mayo Clinic/Cardinal Health GLN Implementation. Mayo Clinic.

Standard Products and Services Code® (UNSPSC®) – Product Classification

Literature Review: RFID

• Radio Frequency Identification (RFID) provides a way to improve patient care– Tracking patients, staff, and assets (equipment and

supplies)• Cost is prohibitive for items under $15 at this time• NY Presbyterian/Weill Cornell uses RFID to track

supplies in cardiac surgery department– $230,000 savings on unneeded heart valves

Kumar, S., Swanson, E., & Tran, T. (2009). RFID in the healthcare supply chain: usage and application. International Journal of Health Care Quality Assurance, 22(1), 67-81. Scheurenberg, B. K. (2008). RFID moves beyond assets: Provider organizations use tracking technologies to help improve workflow, quality of care and patient safety. Health Data Management, 16(1), 36-38.

Literature Review: Case Studies

Catholic Health Initiatives • $125 million cost savings

– Utilization: 20% savings– Freight: 10% savings– Staffing: 4% savings– Supplies: $64% savings

• Reduced supply report data sources from 30 to 1

• Lawson Business Intelligence (BI) tools provide operational reports

Mountain States Health Alliance• Created single materials

management office to handle 7 facilities

• Electronic ordering increased 85% (95% with Lawson fax integrator)

• Lawson Requisition Self Service increased online orders by 49% with no staff increase

Literature Review: Lessons from Mass Retail

• Supply chain streamlining in mass retail (Wal-Mart) translate to health care cost savings– Commoditizing currently customized items– Providing retail clinics as preferred providers of

routine treatments, tests, and vaccinations– Bundling services and products into an episode of

care

Agwunbi, J., London, A. (2009). Removing Costs from the Health Care Supply Chain: Lessons from Mass Retail. Health Affairs. 28(5), 1336-1342.

Literature Review: Metrics and Benchmarking

• Benchmarking supply chain for continuous performance improvement:– Setting the Foundation– Gathering Data– Interpreting the Benchmarks– Taking Action

Smith-Daniels,Vicki. (2008). Hitting the Benchmark: How To Get The Most From Your Metrics. Materials Management in Health Care, 17(9) ,18.

Summary

• Lawson streamlined the UAB Hospital supply chain

• Integrated Lawson with UAB Oracle system• Requires less space and capital• “Just In Time” philosophy

Possible Improvements

• More “user friendly” technology• RFID system• Bundling of certain materials (i.e. gauze,

bandages, latex gloves)

Questions???