AHRMM: Paradigm shift first step in supply chain improvement
BOSTON—To leverage the role of the supply chain from just order-takers to strategic planners, hospital leaders and members of the C-suite need to undergo a change in mindset, according to John R. McMillen, director of supply chain at Children’s Healthcare of Atlanta, during an Aug. 8 presentation at the 2011 Association for Healthcare Resource & Material Management (AHRMM) annual conference.
McMillen detailed efforts at Children’s Healthcare of Atlanta to bring the supply chain department “from the basement to the boardroom,” where they now participate with hospital leaders to increase efficiencies and synchronize workflows. The shift has improved the quality of his department as well as brought down costs, he said, but the first step was undergoing a paradigm shift from materials management to supply chain.
“When we started, we were literally in the basement,” McMillen said. “Once we changed our mindset, it was easier to sell outside. You’re more than just order-takers; you have to get outside the mindset of thinking reactively,” he told an afternoon audience.
For the 520-bed, three-hospital campus, Children’s Hospital of Atlanta currently has a supply chain team made up of two directors, five managers and 80 total employees. Directors manage supply chain and strategic sourcing and the five managers oversee sourcing, purchasing, inventory and distribution, explained McMillen. The hospital has an offsite distribution center, logistical deliveries and uses supply chain management software to assist with centralized purchasing and sourcing, among other tasks.
During the shift, McMillen said the department focused to avoid making an overly complex system and implementing a one-size-fits-all model, he noted. Instead of thinking about each department as isolated, and striving for the lowest cost as a number one priority, he said. Atlanta’s supply chain focuses on being customer-centric and planning based on demand. Additionally, individual departments have a stake in the processes, as ideas to improve efficiencies—both big and small—are welcomed from every hospital employee.
The hospital’s model for improving its supply chain consisted of a multistep strategy: streamline, enhance, extend and synchronize, according to McMillen, noting the process won't be easy. “If you don’t think it will be difficult and take some time, you’re setting yourself up for failure,” he added.
A diagram presented to the audience depicted a house made up of the features of Atlanta’s supply chain. The foundation consisted of process flow, master data management and category management. McMillen stressed the importance of knowing the processes and maintaining clean data.
The core of the house was made up of the department’s competencies, including achieving operational excellence and connecting and integrating with the hospital. McMillen noted the importance of connecting with department staff and engaging them in process to demonstrate value. “You have to connect and integrate with everyone and get them on your side,” he said. Finally, the roof of the structure was made up of measurement and dashboard development, data integration, item master-ownership and financial understanding.
McMillen noted a few components of their success: thinking differently, people capacity, process discipline and technology capability.
Providing a few examples of how heightened staff awareness has improved process, McMillen said the hospital's cath lab monitors expiration dates and tries to use products before they expire. Another idea, which came from one of the hospital's nurses, saves the hospital an estimated $750,000, by using recylced pusle oximeters only when needed, as opposed to routinely, he said.
McMillen detailed efforts at Children’s Healthcare of Atlanta to bring the supply chain department “from the basement to the boardroom,” where they now participate with hospital leaders to increase efficiencies and synchronize workflows. The shift has improved the quality of his department as well as brought down costs, he said, but the first step was undergoing a paradigm shift from materials management to supply chain.
“When we started, we were literally in the basement,” McMillen said. “Once we changed our mindset, it was easier to sell outside. You’re more than just order-takers; you have to get outside the mindset of thinking reactively,” he told an afternoon audience.
For the 520-bed, three-hospital campus, Children’s Hospital of Atlanta currently has a supply chain team made up of two directors, five managers and 80 total employees. Directors manage supply chain and strategic sourcing and the five managers oversee sourcing, purchasing, inventory and distribution, explained McMillen. The hospital has an offsite distribution center, logistical deliveries and uses supply chain management software to assist with centralized purchasing and sourcing, among other tasks.
During the shift, McMillen said the department focused to avoid making an overly complex system and implementing a one-size-fits-all model, he noted. Instead of thinking about each department as isolated, and striving for the lowest cost as a number one priority, he said. Atlanta’s supply chain focuses on being customer-centric and planning based on demand. Additionally, individual departments have a stake in the processes, as ideas to improve efficiencies—both big and small—are welcomed from every hospital employee.
The hospital’s model for improving its supply chain consisted of a multistep strategy: streamline, enhance, extend and synchronize, according to McMillen, noting the process won't be easy. “If you don’t think it will be difficult and take some time, you’re setting yourself up for failure,” he added.
A diagram presented to the audience depicted a house made up of the features of Atlanta’s supply chain. The foundation consisted of process flow, master data management and category management. McMillen stressed the importance of knowing the processes and maintaining clean data.
The core of the house was made up of the department’s competencies, including achieving operational excellence and connecting and integrating with the hospital. McMillen noted the importance of connecting with department staff and engaging them in process to demonstrate value. “You have to connect and integrate with everyone and get them on your side,” he said. Finally, the roof of the structure was made up of measurement and dashboard development, data integration, item master-ownership and financial understanding.
McMillen noted a few components of their success: thinking differently, people capacity, process discipline and technology capability.
Providing a few examples of how heightened staff awareness has improved process, McMillen said the hospital's cath lab monitors expiration dates and tries to use products before they expire. Another idea, which came from one of the hospital's nurses, saves the hospital an estimated $750,000, by using recylced pusle oximeters only when needed, as opposed to routinely, he said.