By Danielle Malins, Vizient Consulting Director
Doug Rees, Vizient Senior Consulting Director
When we walk into a hospital, it's always interesting to see how inventory is managed in different departments. Clinicians depend on supplies being available to serve their patients, and those supplies need to be close to point-of-use areas at a reasonable cost to the hospital.
There are several ways to replenish hospital inventories using a Periodic Automatic Replenishment (PAR) methodology. A hospital can choose anything from a manual people-and-paper process to a high-technology and hardware-based application. Decisions must be made to determine how much clinical staff time will be required to assist in the replenishment processes or if supply chain staff will manage the entire process.
Standardization is not the right approach to PAR management
We often hear about standardization efforts and sweeping initiatives to implement inventory methodologies across an entire hospital or health system. A hospital's many different departments have diverse requirements, so across-the-board standardization may not be the best path forward.
Nursing units, emergency rooms and surgery suites all operate differently and have varied supply requirements. Balancing the right mix of people and technology should match the actual requirements of that department's supply chain.
Selecting the best PAR methodologies by balancing technology and customer-oriented service requires careful thought and planning. It's important to consider these questions:
- When does supply chain manage the entire replenishment process?
- When do clinical resources partner in the replenishment process?
- Where do we bring in technology?
The table below describes various high-level replenishment methodologies to guide in decision making.
Utilization of people
Great people and processes deliver successful outcomes for many PAR areas. Supply chain staff can engage clinical area staff and leaders regularly, deliver exceptional customer service and free up clinical resources to focus on patient care.
Ensuring processes are well established and staff are trained thoroughly provides consistency. Staff can then focus on customer service and preventing clinical staff from having to engage in day-to-day supply management.
It's also essential to note that technology enhances work processing for supply chain teams. At a minimum, teams should have access to bar codes, handhelds and software to assist in analysis. This provides enough technology to be efficient and responsive to changing needs.
Utilization of technology
The big advantages technology delivers are the connections between systems and the ability to automate many manual and repetitive processes, improve accuracy and speed, and reduce re-work and errors.
Technology provides real-time visibility into available supplies and utilization. It supports reordering and receiving and removes manual work from the supply chain organization. Its analytical capabilities deliver speed in identifying issues or the need to increase or decrease PAR levels.
For clinical staff, technology identifies the inventory consumed and will record supply use for specific patients. This automates clinical documentation and supply billing without additional effort. The use of inventory technology increases accuracy in the patient's medical record and improves charge capture rates.
However, people tend to forget that the benefits of technology are not always easy to achieve. There is a tendency to underestimate the actual requirements for implementation and ongoing maintenance.
Technology does not function well without dedicated resources to manage the system and continuously drive improvements. Value is not obtained without a commitment to take advantage of all capabilities and manage changes. Providing the people and skills required for this is essential to exceed return on investment targets.
Apply the right method
Supply management is not a one-size-fits-all approach for a health system or even one hospital. Take advantage of the benefits that people and technology provide by identifying requirements and balancing the right resources. Once methodologies are identified for the various services lines, be strategic and commit to thoughtful implementation.
An average nursing unit with few chargeable items and a lot of daily activity will benefit most from a focus by staff rather than a high-technology solution.
Provide your team with the following tools for success:
- Develop well-defined processes and document them.
- Train all staff regularly, including those who are experienced.
- Provide handheld technology and bar code labels that are up to date.
- Regularly review PAR levels and adjust them to match usage.
Technology solutions are great at supporting procedural areas. The increased need to document the use of supplies and implants and multiple supply charges per encounter are a great use for a technology solution.
In these areas, some inventory levels are low because utilization is inconsistent and supply costs are high. These situations benefit from a well-implemented technology solution and the increased visibility it can bring.
The successful use of technology includes a handful of objectives:
- Identify the most important requirements and keep them visible.
- Dedicate the right people to do the work and train them.
- Ensure that data is accurate.
- Partner with your skilled IT department before, during and after implementation.
- Plan and commit to ongoing improvement efforts.
Take the time to review how your inventory is being managed in different areas, and assess each situation and consider the best option and use of resources.
And most importantly: Move forward with the future in mind.
Learn more about how Vizient can help transform your supply chain operations.
About the authors
In her role as Vizient consulting director, Danielle Malins equips providers with leading-practice opportunities to improve their supply chain. Her 30 years of experience includes daily distribution operations, periodic automatic replenishment (PAR) and perpetual inventory management, value analysis, new medical facility design and low unit of measure (LUM) implementation. She has a Master of Healthcare Administration and a CMRP certification from AHRMM.
As a senior director in Vizient’s spend management services consulting division, Doug Rees provides team leadership, develops partnerships and manages consulting engagements with provider healthcare organizations. Rees brings more than 30 years of experience in healthcare supply chain management, which includes all aspects of the supply chain organization. Prior to joining Vizient, he held director roles in large healthcare organizations with a focus on process improvement, ERP system implementations, data management and operations. He has an MBA and a CMRP certification from AHRMM.