PRODUCTS & SERVICES
is — or should be — totally different. In a ware- house you should never place any two like items beside, above or below each other [because] this is a miss-pick waiting to happen.” Like Van Vlerah, Switzer favors the use of a warehouse management system, which would track item location, proper stock rotation, lot numbers, expiration dates, receiving, shipping, routing personnel and even which size totes to take for an order, he indicated. This system also will enable managing inventory in multiple lo- cations within the warehouse — both dynamic and fixed — as well as handle cycle counts for a consistent, accurate inventory and allow you to measure the various [key performance indica- tors] to verify how well your systems and your people are doing, he added.
Warehouse management systems can help even the newest employees and intermittent personnel identify picking locations for fulfilling order selections and putting away stock, ac- cording to Jim Dickow, President, Dickow Consulting Group LLC, Milwaukee.
“Most warehouse management systems have some sort of system to rearrange the ‘picking ticket’ in the order most efficient for picking and/or packing,” he continued. “This would increase the pace and accuracy of the fulfillment process.”
Jim Dickow
A WMS also enables employee accountability and responsibility, Dickow insisted, “keeping track of who is filling a particular order, how much time it takes and how the performance compares to standards of operational practice,” he added.
“Inventory management begins with accurate tracking of original incoming inventory for use in manufacturing processes from raw materials, staging [and] kitting, through work-in-process to shipment of finished goods,” said Amy Flynn, OR/CS Market Manager, Hanel Storage Systems, Pittsburgh, PA. In fact, [materials resource plan- ning or enterprise resource planning] systems provide management visibility for all in-bound, in-storage and out-bound inventory, she added. “These systems assist in the planning of the manufacturing process to ensure that all needed components are on hand at the time of assembly or manufacturing,” she said. “The [stock-keeping unit] level tracking continues throughout the pro- cess to keep accurate stocking levels, create audit trails of employee interaction with inventory, identify obsolete inventory as well as identify shipping requirements.” Flynn insisted that a comprehensive integrated system is vital for accurate inventory manage- ment in this age of accountable care, tighter bud- gets, leaner staffing and Six Sigma methodology, but lamented that “far too many hospitals are still utilizing a pen-and-paper system or a standalone software platform for inventory management.” Switzer favors “wire guidance” in the floors to guide powered equipment, such as forklifts
or pickers. “This keeps your staff from running into the shelves and potentially damaging the shelving, the products, or even their cowork- ers,” he said.
Believe it or not, Supply Chain should design the building’s air conditioning system, too, Swit- zer insisted. “We use a type of system that uses no ductwork and allows you to store goods clear up top without having to worry about tempera- ture differences,” he said. “A typical warehouse with standard air conditioning would have about 100 roof penetrations — which can lead to leaks — and will have air stratification that can lead to a 15 to 20-degree difference from the floor to the ceiling in a warehouse. This is very important for temperature-sensitive items. It also has the ability to filter all of the air and remove all of the dust from the entire building. The only time we have to dust our goods is when we receive them.”
Visibility matters
Selecting the right technology hinges on many variables, according to Nancy Pakieser, Senior Director, Industry Development, TECSYS Inc., so the exercise can be a bit challenging. “Our partners often work through the ‘people, process, technology’ methodology,” Pakieser said. “Once they have the right staff in place and have identified the workflows and processes needed to support patient care, then we can determine the right technology to put in place. As an example, in some clinical areas, bar-code readers work well, in other clinical ar- eas an RFID-enabled Kanban system is the best solution. In the perioperative setting there may be many technologies in place to support vari- ous aspects of the workflow, such as handheld devices to help build the case carts, 2-bin Kanban in the core, an RFID reader to capture data use in the operating room and then a bar-code reader to restock unused items.”
Technology merely gives supply chain the inventory visibility across the health system it serves, Pakieser noted. “Know- ing what you have and where you have it enables an organiza- tion to be nimble and responsive to fluctuations in care delivery needs and to shift items to areas of greater demand,” she said. “You can then leverage this data to right-size your inventory investment and imple- ment demand-planning practices. By leveraging the data from any mix of technology capture, you can improve your supply chain’s overall performance with definite business payback and better support of care delivery.”
Nancy Pakieser
Access to real-time data is critical for decision- making, according to Robert Jones, Director of Logistics, Medline Industries, Mundelein, IL. “At worst, most healthcare supply chains rely on gut feel, and at best, many cumbersome spread- sheets to merge data,” he said. “Forward-think- ing institutions should utilize modern database
34 January 2016 • HEALTHCARE PURCHASING NEWS •
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strategies and business intelligence software to ensure optimal performance. Having real-time visibility of inventory performance, equipment locations and KPIs will have a significant posi- tive impact on service to clinical partners.” Supply Chain must be able to visualize its workflow through a system of record for bin locations so that they can maintain a slotting strategy, Jones continued. “This slotting strategy should be evaluated with modern warehouse vi- sualization software, which allows for the ability to test what-if scenarios for warehouse layouts and slotting strategies,” he added. Scott Nelson, Senior Vice President of Sup-
ply Chain, Cardinal Health Inc., Dublin, OH, indicated that simulation tools would contribute here as they would allow Supply Chain “to see the impact of design changes and mitigate any un- foreseen bottlenecks or obstacles before moving any furniture.” Nelson further recommended velocity/profiling tools as an- other essential element “to determine the opti- mal storage location for each product based on parameters such as velocity, size, and proximity to the outbound area.”
Scott Nelson Velocity matters
Gaining access to inventory velocity data can facilitate planning and forecasting, according to John Freund, CEO, Jump Technologies Inc., Eagan, MN, but hospitals tend to struggle with it. Distributors and suppliers build this data by using technology such as carousel systems that organize, store and provide access to huge amounts of inventory, Freund indicated. “Be- cause these systems are extremely sophisticated, they not only learn the best way to organize the inventory, they also track every item requisi- tioned and over time, build accurate velocity data that supports the replenishment and on- going fulfillment processes,” he said. “As the system assimilates more data, it can reorganize the location of supplies for efficiency, set new reordering information based on actual velocity over time, and make recommendations to assist with planning.”
Historically, hospitals have found managing inventory velocity, or item-level usage data, dif- ficult to achieve and maintain for three reasons, Freund observed. “First, there may not be a way to centralize consumption data for every item in each area of the hospital or health system,” he noted. “Second, hospitals must overcome the challenge of unit of measure, with some areas or sys- tems storing item data as ‘eaches’ and others reporting ‘boxes’ and ‘cases.’ Finally, reporting tools ac- cessible to the hospital may not be able to aggregate item usage data across multiple systems.”
John Freund
As a result, hospitals rely on PAR replenish- ment, which involves “a technician visually as-
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