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Hospital- Inventory Distribution

Six Sigma – iSixSigma Forums Old Forums Healthcare Hospital- Inventory Distribution

Viewing 13 posts - 1 through 13 (of 13 total)
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  • #24899

    Mark Cealey
    Participant

    I am currently working on a Six Sigma Project trying to revamp the distribution of products within the Hospital.  Would welcome discussion if anyone else had similar experience.

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    #59795

    Tammy
    Member

    Mark,
    We’re having a problem with distribution also. Too many supplies in one area, not enough in other areas. Is that the problem you’re having? Have you started a 6 sigma project on it yet? I’d be interested in discussing this with you — maybe others will join.
    Tammy

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    #59796

    O’Connell
    Participant

    We are currently working on a project in this area.  The scope became too big and we found that there were some fundamental issues in the area of central stores that were causing problems with distribution.  We are now taking a step back and trying to improve the ordering and receiving process in Materials Management.  The goal is to eventually tackle the problem with distribution but to do so now would not accomplish anything.  We have to go back to the underlying issues.

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    #59797

    Schmidt
    Participant

    Brian,
    One thing that I would suggest that has really helped my distribution projects is a process modeling software program like ProcessModel or iGrafx. Usually the purchasing group does their buys on a schedule and you can model that as the input of your process, then specify the different floors/departments and consumption rates (if you have the data, if not you can easily take it). By better understanding the process as it operates, you’ll be able to create “to be” scenarios and actually watch them run over 1,000 or 1,000,000 cycles. If you haven’t heard of these two programs, talk to your BB (or better yet, your MBB) and ask for assistance. It might be useful.
    Marcus

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    #59798

    Reinhard Zapfe
    Participant

    Mark, Brian, TammyI am presently in the implementation phase applying six sigma to reduce supply expenses by managing inventory for a four hospital system.  Consider a two prong approach.  Begin by measuring the process cycles from receipt of order to deliver and identify the many causes of variations.  Apply a QFD to identify the primary issues affecting the quality of service provide by the material management system to its customers and avoid “mission creep” or a broad project scope.  In my project, the team focused on the input or supply request process for the distribution of inventory for surgical and pharmaceuticals.  The material management system was deemed a lesser issue that the inaccurate requests from the departments.  So, for our project the second prong is to establish efficient inventory replenishment levels at the point of consumption.  In this case apply a modification of the EOQ model to establish minimum, maximum and reorder points based on historical usage.  Establish your LSL & USL as minimum and maximum levels.  Spot check the process.  Any audits of a 30 items having a level outside the LSL or USL range is a defect.  Establish a process sigma level using the sigma calculator provided on the iSixSigma site.   Controls measures include inventory turns, sigma process measure for maintaining efficient levels of inventory.  I would recommend adding the process measure for cycletime of requisition to receipt.  Reinhard Zapfe,  Performance Solutions, GE 

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    #59799

    Tammy
    Member

    Reinhard,
    Thank you SO much for your play by play on the project. It was very easy to understand how I should help our project progress, and I really appreciate it.
    One question: how do you define “EOQ model”?
    Thanks a bunch!
    Tammy

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    #59800

    Reinhard Zapfe
    Participant

    Tammy,I have adapted the EOQ to exclude carrying cost since hospitals do not have the storage capacity store economic order quantities  that will offset their ordering costs.  So, instead the attached modification works well and is also a popular logic found in softwares.Lead Days = Time required for vendor to deliverOrder Cycle Days = Time between orders.  Daily = 1, Weekly = 7 etcSafety Days = Buffer or supplies maintained to manage irregular usage patterns, storms, delivery delays, etc. Avg. Daily Usage (ADU) = Total usage/365 Maximum = [Lead Days + Order Cycle + Safety Days] x Avg Daily UsageReorder Point (ROP) = (Lead Days + Safety Days) x ADUMinimum = Safety Days x ADUHope this helps. If you need to discuss this please let me knowReinhard Zapfe, [email protected]

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    #59801

    Cary
    Participant

    Reinhard,
    I’m doing the same type of project! I appreciate your advice on this type of project and I will post more thoughts/suggestions as I progress in my project. It is in the charter stages right now, but I appreciate the fact that others are working on the same thing. It’s good to know that you’re not the only one dealing with this type of issue :).
    Cary

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    #59802

    Reinhard Zapfe
    Participant

    Cary,
    Let me know how it goes.  I would be interested in see how you scope the project and your approach.
    Thanks,
    Reinhard

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    #59803

    Steven
    Member

    All:
    I have been interested in the area of health care from a personal perspective and am shocked at the poor process capabilities. Funny enough I found similarities, which are profound with respect to the automotive industry and are very appliucable to health care, except no one wants to listen, everyone is an expert (in general). However, if one can slightly think out of the box for a moment and compare the value streams, of both the automotive and health care they are more or less identical. Granted the emphasis on saving lives is by far more important than if it has a heated seat.
    Regardless, there are hosts of people who are involved with improving the value stream in a supply chain and service perspective.  In addition, as cost climb, and our population gets older, we better get off the stick and start fixing some very fundemental problems.  As a contributor to a supply chain consortium, I will be happy to offer some assistance in at least your efforts to move forward.
     
    Cheers

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    #59804

    Sinnicks
    Participant

    Reinhard,
    I am also in the implementation phase of my Project.  I studied the ordering patttern of 5 specific departments and found that 24 items
    were making up 80% of the ordering volume. I was also able to find
    a static replenishment cycle.  This process in a pilot lowered our inventory by 20% and reduced cost by 27%.  Our Customer satisfaction is 95 %.  We measured a defect as an item delivered to the wrong place,in the wrong qty and not when the customer required it as a defect.
     

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    #59810

    Reinhard Zapfe
    Participant

    Mark,
    How did you measure your 27% cost savings?  Can you share your transfer function? 

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    #60080

    Ang
    Participant

    I apologize if I posted this more than once – I seem to be having connection problems.
    use case – future eventpatient sees a healthcare providerpatient and healthcare provider schedule a healthcare event in the futuresupplies ordered for healthcare event (order early, order at optimal time, order late)supplies are delivered for the healthcare event
    use case – immediate event(you should be able to id these by comparing the scheduling date to the scheduled date)patient sees a healthcare providerpatient and healthcare provider schedule a healthcare event immediatelysupplies ordered for healthcare event immediatelysupplies are delivered for the healthcare event
    supply state for possiblities for each use case   ( could be a Y or an X depending on where in the process you look at it)* to many supplies for the healthcare events on their schedule dates* to few supplies for the healthcare events on their schedule dates* just the right amount
    Your problem (the Y’s I think in sixsigma) is going to be either effectiveness and/or efficiencyIt sounds like you may have both.
    y1 = lack of supply at time the time of the of healthcare event  – process is not effectivey2 = over supply – process is not efficient
    NOTE: You should be able to separate immediate healthcare events from future healthcare eventsby comparing the date the event was scheduled onto the date that the event that was scheduled for.If the event was scheduled on the same day then that was probably an emergency.
    possible x’s for y1   future scheduled healthcare events are ordered at the last minute   spikes in immediate need healthcare events are greater than supply   supply is ordered at the optimal time but something else is failing in the process   supply is delievered faulty/broken  supply is delivered late  supply is delivered to wrong location  supply is qyt is wrong   supply is delievered to early   incorrect supply is delivered
    possible x’s for y2   future scheduled event orders are made to early   over ordering is done to handle the spikes in the immediate need events  over ordering is done to compensate for the ineffectiveness of the supply process    (Your Y1 problem could become a root cause X of your Y2)
     
    All of the x’s listed above should be measureable.   You should be able to do separate analysis on the variance caused by known future events versus the variance caused by the unknown immediate events.
    I realize scope is important but the root cause of a healthcare supply order is a healthcare event. If you limit your scope to just the time of the order to the time of the delivery you may be missing some big impact data.
    FYI —- I am still in the novice stage of sixsigma .. So I may be way off. 
    Good Luck

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