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Get Ready to Get the Most Out of Your Data

06/14/19

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Travis Liening, Consultant, Supply Chain Operations

In order for health care organizations across the country to further drive at reductions in cost per case, they have to get the most out of their data. Data contained in electronic medical record systems take care of the clinical end of the equation, but what about the supply chain components? If data can be pulled out of your current system, will key stakeholders believe that data is reliable?

With the increased pressure to lower costs, an upgrade of your system, or possibly a whole new implementation of an enterprise resource planning (ERP) system might be needed for the organization to have confidence in the data capture. The question is: Are you ready?

Whether you’re responsible for distribution, purchasing, contracting or maintaining the current materials management information system (MMIS), everyone has a vital role to play in the successful implementation of a new system. Following are a few key elements that get noted, but typically don’t get enough attention when system upgrades are contemplated. This lack of preparedness can lead to significant pain points later in the implementation process.

Item master: cleanse it early and often

What exactly does that mean? Well, all of the large ERPs are primarily driven by the item master file. A wrong unit of measure, an improper item description or an incorrect vendor item and you’re in for chaos. Invest in a resource that can assist with cleansing your item master file to provide you with standardized item descriptions, unit of measure strings, UNSPSC (United Nations Standard Products and Services Code), HCPCS (Healthcare Common Procedure Coding System) codes and Proper Nouns for your item descriptions. These can help identify items for your hospital requestors and help you slice and dice your usage and analyze your spend to identify savings opportunities through standardization and contracting.

Accuracy is key in inventory counts

Supply disruption is the single biggest risk for the supply chain in an upgrade to a new system. Much of this risk can be mitigated by accurate inventory counts in the current system. Increasing the frequency of counts in the six months leading up to the new system implementation will help mitigate potential inventory issues prior to the data being converted into the new system.

Clean up open orders, returns and inventory problems

Getting those product returns that have been sitting around the warehouse or receiving area collecting dust dispositioned with your suppliers will only make life easier during the transition. While it’s common to leave purchase orders in the system and not try and convert them, the primary benefit to minimizing the open and problem orders is it allows purchasing to focus on implementing the new system.

Purchasing will ultimately feel the pressure to rush orders in to the hospital in order make up for any inventory-related issue that occurs in the distribution warehouse. That being said, it’s vital that they’re able to focus their attention on the new system they’re using to help them be as efficient as possible. In a successful implementation, purchasing is a calm voice reassuring their warehouse staff or nurse manager that no matter the problem they may be experiencing, the supply they need will arrive on time.

Eliminate new contracts during implementation

Whether this is a purchasing or contracting group function in your organization, the point remains the same: no price changes should be made at least one month prior to and one month post-implementation. Holding on price changes as well as new or extensions to contracts will help ease the stress when converting to the new system. Because ERPs are price driven, the loaded price or lack of a price on an item can affect everything, including inventory transactions.

Overconfidence in the data quality in these areas will come back to haunt a go-live and hinder user acceptance and trust in the new system. While there’s no magic formula for a problem-free ERP implementation, taking on these tasks as early in the process as possible, and continuing these habits into the new system implementation, will help create a smoother transition.

About the author. As a consultant in supply chain operations for Vizient, Travis Liening uses his subject matter expertise to assist member organizations in optimizing their supply chain operations through use of their ERP to leading-practice performance levels. His more than 13 years of industry experience provides him with a keen understanding of numerous aspects of supply chain operations, which allows him to adapt those processes through ERP implementation and optimization.

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