Never Underestimate the Power of Measurement
It’s relatively easy to identify that you have a hospital supply chain challenge (higher cost, lower quality or poor service levels), but it’s quite another thing to uncover the root cause of why this situation is happening.
Instead of pointing fingers, becoming defensive or accepting the uninformed opinions of others, a much better way is to trust a statistical methodology such as Supply Six Sigma® to identify and address the real source of the problem.
For example, I just read about a hospital that realized that their cardiothoracic unit (CTU) cost per discharge for supplies was $66.11, which they identified as too high. But they didn’t RUSH to judgment on why this was happening. They instead formed a team to define, measure, analyze and improve this situation with the goal of reducing these costs by 50%.
Once this cross-functional team was formed it developed a high-level process map of their CTU discharge process to understand the current system and then gathered baseline performance statistics for analysis. Based on their statistical studies the team found after counting the supplies that were discarded on 52 discharges that on average 67 unused items were discarded, ranging in price from pennies to more than $1.00 per unit.
They also found that medications that were stocked in the CTU’s lock box and which should never have been discarded unused were being discarded. It was estimated based on these statistics that were compiled by the team that this wasteful practice of discarding unused supplies and drugs was costing their hospital $55,185 annually.
The team’s observation and investigation found that there was no uniformity or consistency on how the CTU staff pulled and restocked supplies, confirming that this was the root cause of this excessive cost. The team and CTU staff decided to institute a supply cart system for all CTU patient supplies that would be restocked daily and any unused supplies discarded. It was calculated that after buying seven additional carts, that the ROI on this project was 163 percent!
This is what an organized, methodical and step-by-step statistical approach to your supply chain challenges is all about: No short cuts, no guessing, no opinion just accurate and precise measurements to uncover the root cause of the problem being addressed and then implementing the right solution for sustainable and measurable results.
Filed Under: Best Practices • Healthcare Supply Chain • savingsblog
