iSixSigma

Monitoring supplie expense

Six Sigma – iSixSigma Forums Old Forums Healthcare Monitoring supplie expense

This topic contains 7 replies, has 6 voices, and was last updated by  BritW 12 years ago.

Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • #25553

    lin
    Participant

    Is there anyway to use sigma techniques to monitor supply expenses, to properly make sure that supply expenses are inline, to make sure that they are under budget or within budget guidelines other than the “old fashion way”?
    BillT
     

    0
    #61747

    Perryman
    Participant

    Hi Bill,
    Not sure what you mean by the “old fashioned way” but you could plot your historical spend data on a control chart to see if there are special causes in your spending.  You could also plot on a time series chart to figure if there are patterns such as end of month or quartlerly spend sprees.  You might also what to look at these spend patterns in comparison to how budgets are allocated and re-allocated to see if the process drives certain behaviours – and spend.
    I have seen yearly budgets allocated on historical spend, so if you don’t spend, you don’t get it types of behaviours..
    Hope this is the type of advice you were looking for.
     

    0
    #61749

    GDS
    Participant

    Bill,
    Not sure if this is what your talking about, but one thing we did with supplies was to determine the correct on-hand qty. We collected the data on daily, weekly & monthly use of each item and calculated what we wanted our on-hand qty to be taking into account the lead times on each item. Our analysis results showed we had six months of inventory on items that had two day lead times (however we were ordering replacement supplies each week) further analysis revealed that we had a vendor change and our lead time went from three months to two days, but nothing was put into place to align our re-order points.
    Now for the overall budget monitoring process, we have a +/- 3% of total budget spend each month, we allow for some variance due to billing delays (budgeted for this month, paid next month). Any line item outside of the set range (+/- 3%) requires a detailed comment. (Natural gas prices went up, electricty rates, volume increase etc…)
    Hope this helps.
    GDS

    0
    #61750

    BillT
    Participant

    Hi,
    Thanks for the insight.  How did you determine the correct on-hand quantity?  Do you mean you determined what qty you had on-hand at a particular time and monitored from that point?  Did you determine what you “wanted on-hand” and monitored from that point?  It may seem like the same question but it is not.
    Bill
     

    0
    #61751

    GDS
    Participant

    We took historical usage data, number of items used per day, per week, per month, calculated the basic stats (mean, stdev). Mean + 3 stdev = our 95% CI stock level. Item by item we analyzed what we wanted our safety stock level to be based on how critical the item is and the lead time.  
    So item “A” calculated to be 250 units per week, we are 95% confident that if we start out Monday with 250 units we will have enough supplies to last all week.(Item “A” has a two day lead time) Also you have to consider lead time and minimum order qty of the supplier, Our items safety stock levels range from 3 days to 3 weeks.

    0
    #61752

    BillT
    Participant

    Got it, great idea!  I was thinking some what in those terms but was not a 100% sure.  Any ideas on monitoring overtime?

    0
    #61754

    DaveAllah
    Participant

    hi
    try fish bone, it is old but still do it best
    yours
    DaveAllah
     

    0
    #61755

    BritW
    Participant

    Was 250 the minimum stock order?  Wondering why you would purchase for the week if you had a lead time of 2 days.

    0
Viewing 8 posts - 1 through 8 (of 8 total)

The forum ‘Healthcare’ is closed to new topics and replies.