Pharmacy Materials Pharmacy Materials ManagementManagementLean and AccountableLean and Accountable

Julia SwansonJulia SwansonProject ManagerProject Manager

Henry Ford Health SystemHenry Ford Health System

Detroit, MichiganDetroit, Michigan

OutlineOutline

nn ObjectivesObjectivesnn Facility IntroductionFacility Introductionnn Project BackgroundProject Backgroundnn Computing System CharacteristicsComputing System Characteristicsnn Role RedesignRole Redesignnn Lean ToolsLean Toolsnn Current StatusCurrent Statusnn Lessons LearnedLessons Learned

ObjectivesObjectives

nn Discuss strategies for facilitating change between Discuss strategies for facilitating change between conflicting departments.conflicting departments.

nn Share methods for designing flexible roles and Share methods for designing flexible roles and responsibilities.responsibilities.

nn Discuss the application of “lean” tools to analyze Discuss the application of “lean” tools to analyze processes and remove waste.processes and remove waste.

nn Comment on the lessons learned throughout the Comment on the lessons learned throughout the redesign.redesign.

Henry Ford Health SystemHenry Ford Health System

nn Henry Ford Hospital (Detroit)Henry Ford Hospital (Detroit)–– 700 beds in operation, 40,000 annual admissions700 beds in operation, 40,000 annual admissions

nn Community hospitalsCommunity hospitals–– BiBi--CountyCounty–– WyandotteWyandotte–– KingswoodKingswood

nn Henry Ford Medical Group Henry Ford Medical Group –– ~700 physicians in 40 specialties~700 physicians in 40 specialties–– Over 20 outpatient facilitiesOver 20 outpatient facilities

nn Community Care Services Community Care Services nn Health Alliance PlanHealth Alliance Plannn Corporate Offices (Accounting, AP, Audit)Corporate Offices (Accounting, AP, Audit)

Henry Ford Hospital Henry Ford Hospital PharmacyPharmacy

nn 6,000 medication orders processed per day.6,000 medication orders processed per day.

nn 14,000 unit doses and 3,000 IV medications prepared 14,000 unit doses and 3,000 IV medications prepared and dispensed per day.and dispensed per day.

nn $60 Million in annual drug purchases $60 Million in annual drug purchases –– 40% inpatient 40% inpatient

–– 60% satellite clinics60% satellite clinics

nn Strong clinical pharmacy program.Strong clinical pharmacy program.

nn Proven adverse drug reaction reduction through Proven adverse drug reaction reduction through pharmacist participation in unit rounding.pharmacist participation in unit rounding.

Henry Ford Hospital Pharmacy Henry Ford Hospital Pharmacy Materials ManagementMaterials Management

nn 10 employees.10 employees.

nn Responsible for drug procurement Responsible for drug procurement from order to invoice matching.from order to invoice matching.

nn Provide clinics and other areas with Provide clinics and other areas with medications. medications. –– Supplied from stock room.Supplied from stock room.

–– Ordered through direct buy.Ordered through direct buy.

nn Purchase 85% of stock from one Purchase 85% of stock from one vendor through EDI transactions.vendor through EDI transactions.

nn Maintain remote stockroom Maintain remote stockroom inventories.inventories.

Project BackgroundProject Background

nn Originally innovative, now antiquated system used by Originally innovative, now antiquated system used by pharmacy to purchase drugs.pharmacy to purchase drugs.

nn Large vendor system used for purchasing and Large vendor system used for purchasing and financials.financials.

nn Need to facilitate decisions between corporate Need to facilitate decisions between corporate departments and Pharmacy.departments and Pharmacy.

nn Aligning system requirementsAligning system requirements–– Audit and control capabilities.Audit and control capabilities.–– Data needed in payables and general ledger.Data needed in payables and general ledger.–– Specific pharmacy requirements (340b, detailed inventory Specific pharmacy requirements (340b, detailed inventory

capture).capture).

nn Automation of some manual processesAutomation of some manual processes–– More EDIMore EDI–– More price checkingMore price checking–– Tracking of credits/rebates, price changesTracking of credits/rebates, price changes

New Computing System New Computing System CharacteristicsCharacteristics

nn PurchasingPurchasing

nn RequisitioningRequisitioning

nn Inventory ManagementInventory Management

nn Automated ReplenishmentAutomated Replenishment

nn Invoice MatchingInvoice Matching

nn Contract ManagementContract Management

nn 340b Tracking340b Tracking

Facilitating ChangeFacilitating Change

nn One change at a time.One change at a time.

nn Ask questions from different perspectives.Ask questions from different perspectives.

nn Constant communication.Constant communication.

nn Setting priorities together.Setting priorities together.

nn Setting goals together.Setting goals together.

nn Involving senior leadership.Involving senior leadership.

Role RedesignRole Redesign-- Initial Initial StaffingStaffing

nn 1 Manager1 Manager

nn 7.3 Materials Coordinators7.3 Materials Coordinators–– 1 for receiving, troubleshooting, ordering for stock room, 1 for receiving, troubleshooting, ordering for stock room,

phone callsphone calls

–– 1 for filling ambulatory orders, IV order, phone calls, coverage1 for filling ambulatory orders, IV order, phone calls, coverage

–– 3 for inpatient unit/ER/OR/Clinic stockings3 for inpatient unit/ER/OR/Clinic stockings

–– 1.3 for central pharmacy stocking (ordering, ALS boxes)1.3 for central pharmacy stocking (ordering, ALS boxes)

–– 1 for coverage1 for coverage

nn 0.5 Pharmacy Tech (ALS boxes)0.5 Pharmacy Tech (ALS boxes)

nn 2 Office Staff2 Office Staff

Role RedesignRole Redesign-- Initial Staffing Initial Staffing ObservationsObservations

nn Multiple employees mentally tracked inventory levels Multiple employees mentally tracked inventory levels and expected shipments.and expected shipments.

nn There was informal discussion to determine product There was informal discussion to determine product status as opposed to relying on the current computer status as opposed to relying on the current computer system. system.

nn There was a cursory review process prior to There was a cursory review process prior to recommending that invoices and/or statements be recommending that invoices and/or statements be paid. paid.

nn Employees seemed to experience peaks and valleys in Employees seemed to experience peaks and valleys in workload.workload.

nn One employee had too much responsibility. One employee had too much responsibility.

Role RedesignRole Redesign-- Initial Initial Staffing ObservationsStaffing Observations

nn There was a lack of separation of duties from an audit There was a lack of separation of duties from an audit and compliance perspective.and compliance perspective.–– One employee was ordering and receiving.One employee was ordering and receiving.

–– Another employee generated the purchase orders and paid Another employee generated the purchase orders and paid the invoices.the invoices.

nn When staff was off, it was not always clear who had When staff was off, it was not always clear who had what responsibility.what responsibility.

nn Less direction was provided to employees during the Less direction was provided to employees during the afternoon hours. afternoon hours.

nn New duties due to new computer system included New duties due to new computer system included invoice matching and regular cycle counts.invoice matching and regular cycle counts.

nn Office staff rotated regularly resulting in inconsistent Office staff rotated regularly resulting in inconsistent knowledge and vendor relationships.knowledge and vendor relationships.

Role Redesign Role Redesign RecommendationsRecommendations

nn The staffing levels were adequate to complete The staffing levels were adequate to complete the necessary duties. the necessary duties.

nn Each employees’ duties needed to be revised Each employees’ duties needed to be revised in order to stabilize the workload, assign new in order to stabilize the workload, assign new tasks and separate duties.tasks and separate duties.

nn A leadership role was needed in the afternoon A leadership role was needed in the afternoon to check staff progress on assigned duties, to check staff progress on assigned duties, reprioritize duties and possibly shift duties reprioritize duties and possibly shift duties between staff.between staff.

Role RedesignRole RedesignModified StaffingModified Staffing

nn 1 Manager1 Manager

nn 1 Receiver (problem solving, computer)1 Receiver (problem solving, computer)

nn 1 Inventory Control (problem solving, afternoon 1 Inventory Control (problem solving, afternoon lead)lead)

nn 5.3 Materials Coordinators5.3 Materials Coordinators

nn 1 Buyer (problem solving)1 Buyer (problem solving)

nn 1 Buyer’s Assistant (task oriented)1 Buyer’s Assistant (task oriented)

Lean ToolsLean ToolsWork StandardizationWork Standardization

nn Standardization before innovation.Standardization before innovation.

nn Every employee had a different procedures for Every employee had a different procedures for doing the same work, but procedures should be doing the same work, but procedures should be done same way every time.done same way every time.

nn Standard process development was completed.Standard process development was completed.–– Reviewed computer system capabilities and current Reviewed computer system capabilities and current

processes.processes.

–– Developed modified processes based on capabilities and Developed modified processes based on capabilities and critical review of current flow.critical review of current flow.

–– Developed computer system procedure manual.Developed computer system procedure manual.

–– Tested processes and procedures on computer systemTested processes and procedures on computer system..

Lean ToolsLean ToolsValue Stream MappingValue Stream Mapping

nn Making invisible work visible.Making invisible work visible.–– Clock: waiting due to time between stepsClock: waiting due to time between steps

–– In Box: waiting due to batchingIn Box: waiting due to batching

nn Ordering from Vendor ExampleOrdering from Vendor Example

Lean ToolsLean ToolsProcess Analysis QuestionsProcess Analysis Questions

1.1. Where and how will you trigger or sequence work?Where and how will you trigger or sequence work?

2.2. How will you make work flow smoothly?How will you make work flow smoothly?

3.3. How will you make work progress, delays, and problems How will you make work progress, delays, and problems visible?visible?

4.4. Does a step in the process add complexity/ambiguity or Does a step in the process add complexity/ambiguity or add value?add value?

5.5. Can process steps be combined in order to decrease Can process steps be combined in order to decrease handoffs, batching, and additional wait times in queue?handoffs, batching, and additional wait times in queue?

6.6. Where are queues of information or material forming?Where are queues of information or material forming?

7.7. How can workload be assigned to make sure that the day How can workload be assigned to make sure that the day flows smoothly, work is prioritized appropriately and that flows smoothly, work is prioritized appropriately and that work is evenly shared among employees?work is evenly shared among employees?

8.8. Since orders vary from day to day, how is the schedule Since orders vary from day to day, how is the schedule leveled each day to accommodate?leveled each day to accommodate?

Lean ToolsLean ToolsIdentified WastesIdentified Wastesnn OverprocessingOverprocessing

–– Modifying ordersModifying orders–– Calling order to vendorCalling order to vendor–– Entering paper requisitionEntering paper requisition

nn MotionMotion–– Confirming quantity on shelfConfirming quantity on shelf

nn InventoryInventory–– Batch processing of invoices/ordersBatch processing of invoices/orders

nn Correction of DefectsCorrection of Defects–– Modifying quantity on hand to reflect realityModifying quantity on hand to reflect reality–– Changing ordersChanging orders

nn WaitingWaiting–– To execute computer processesTo execute computer processes

Lean ToolsLean ToolsOne Piece Flow ConceptOne Piece Flow Concept

nn OneOne--piece flow of products, information, and patients piece flow of products, information, and patients allows discovery of errors immediately and avoids the allows discovery of errors immediately and avoids the wait time inherent in batching. wait time inherent in batching.

nn ““AndonAndon”” is the ability to is the ability to ““stop the linestop the line”” and alert the and alert the operator and others to an error before the process operator and others to an error before the process continues in order to find the root cause immediately continues in order to find the root cause immediately and stop it from occurring again. and stop it from occurring again.

nn Continuous one piece flowContinuous one piece flow–– Minimizes workMinimizes work--inin--process inventory.process inventory.

–– Eliminates buildEliminates build--up of defects.up of defects.

–– Problem location identified easily.Problem location identified easily.

Lean ToolsLean ToolsOne Piece Flow ApplicationsOne Piece Flow Applications

nn Historically, 340b products were ordered once per Historically, 340b products were ordered once per month, and now they are order as used.month, and now they are order as used.

nn Processing purchase orders as ready (approval and Processing purchase orders as ready (approval and sending) as opposed to batching. sending) as opposed to batching.

nn Checking stock and filling as required as opposed to Checking stock and filling as required as opposed to by set inventory schedule.by set inventory schedule.

nn Sequentially receiving and putting away product Sequentially receiving and putting away product results in counts not getting off.results in counts not getting off.

nn The process must be stopped if an item’s quantity on The process must be stopped if an item’s quantity on hand goes below zero (hand goes below zero (AndonAndon).).

Lean ToolsLean ToolsVisual Control Concept Visual Control Concept

nn Everyone should be aware of the state of the system Everyone should be aware of the state of the system at a glance. at a glance.

nn Put tools in place that give real time metrics about Put tools in place that give real time metrics about how the process is workinghow the process is working–– Display visually the number of items waiting to be processed.Display visually the number of items waiting to be processed.

–– Show the status of an order.Show the status of an order.

nn KanbanKanban–– Provides pickProvides pick--up and transport information.up and transport information.

–– A signal to notify that the order is ready for next process stepA signal to notify that the order is ready for next process step..

Lean ToolsLean ToolsVisual Control Applications Visual Control Applications

nn The new computer system notifies the buyer when the The new computer system notifies the buyer when the PO is ready to be approved and sent.PO is ready to be approved and sent.

nn A credit memo folder has been created to visually A credit memo folder has been created to visually monitor invoices that are waiting for rebates.monitor invoices that are waiting for rebates.

nn The computer system tracksThe computer system tracks–– Number of orders ready to be processed.Number of orders ready to be processed.

–– Last time inventoried/cycle count status.Last time inventoried/cycle count status.

–– Match exception status.Match exception status.

Lean ToolsLean ToolsLoad Leveling ConceptLoad Leveling Concept

nn Match resources and demand on a real time basis.Match resources and demand on a real time basis.

nn Assign workload to prioritize and share among staff.Assign workload to prioritize and share among staff.

nn Pull work in order of priority as staff are available. Pull work in order of priority as staff are available.

nn Review of cards completed by staff by leadership.Review of cards completed by staff by leadership.

Lean ToolsLean ToolsLoad Leveling OpportunitiesLoad Leveling Opportunities

nn Currently staff does not easily share responsibilities.Currently staff does not easily share responsibilities.

nn Use of a Use of a HeijunkaHeijunka box will help smooth box will help smooth responsibilities, set priorities and monitor staff responsibilities, set priorities and monitor staff productivity.productivity.

nn Each “production” card will contain necessary Each “production” card will contain necessary information to complete the task.information to complete the task.

Lean ToolsLean ToolsLoad Leveling ExampleLoad Leveling Example

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Stocking remote locations

Cycle Counts

Receiving and stocking product

Additional

Lean ToolsLean Tools5S Concept5S Concept

nn Sort Sort -- Keep only what is needed and dispose of Keep only what is needed and dispose of everything else.everything else.

nn Straighten Straighten -- A place for everything and everything in A place for everything and everything in its place.its place.

nn Shine Shine (Cleanliness) (Cleanliness) -- This step acts as a form of This step acts as a form of inspection that exposes conditions that could hurt inspection that exposes conditions that could hurt quality.quality.

nn Standardize Standardize -- Develop systems and procedures to Develop systems and procedures to maintain and monitor the first three S’s.maintain and monitor the first three S’s.

nn Sustain Sustain -- Maintaining a stabilized work environment Maintaining a stabilized work environment is an ongoing process of continual improvement.is an ongoing process of continual improvement.

Lean ToolsLean Tools5S Application5S Application

nn The stock room is somewhat The stock room is somewhat chaotic due to the large amount chaotic due to the large amount of product that is moved in and of product that is moved in and out on a daily basis.out on a daily basis.

nn Ability to find items is often Ability to find items is often specific to staff members.specific to staff members.

nn Organization of information Organization of information needed to complete daily tasks needed to complete daily tasks will improve ability to share will improve ability to share duties.duties.

Current StatusCurrent Status

nn Implementation of a new computer system which Implementation of a new computer system which was planned for Summer 2005 has been delayed to was planned for Summer 2005 has been delayed to February 2006 due to other IT upgrade issues.February 2006 due to other IT upgrade issues.

nn Role redesign, work standardization, one piece Role redesign, work standardization, one piece flow, and visual control concepts are being applied flow, and visual control concepts are being applied now and will be applied further with the new now and will be applied further with the new system. There has not been any measurement of system. There has not been any measurement of time or other savings.time or other savings.

nn Load leveling and 5S are delayed to focus on the Load leveling and 5S are delayed to focus on the implementation of the computer system. implementation of the computer system.

Lessons LearnedLessons Learned

nn Changing the culture of the employees is as important Changing the culture of the employees is as important as changing processes and roles.as changing processes and roles.

nn Continuous improvement should be the focus. If you Continuous improvement should be the focus. If you try to change too much, too fast; nothing may get try to change too much, too fast; nothing may get done.done.

nn Automation changes do not ensure process changes . Automation changes do not ensure process changes . It is difficult to complete both simultaneously.It is difficult to complete both simultaneously.

nn Current computer system analysis revealed procedural Current computer system analysis revealed procedural weaknesses (manual payment procedures weaknesses (manual payment procedures -- no no matching, no credit/rebate followmatching, no credit/rebate follow--through, supervision through, supervision holes).holes).