Utilizing technology to better manage the supply chain

Transcription

1 Utilizing technology to better manage the supply chain January 2015 Jayme White Director Technology Sales

2 Agenda Average procurement cycle Challenges Key components and features Driving savings Case studies Solutions Q&A

3 Procurement Cycle Par Areas Requisitioning Departments Place Orders with Suppliers Product Use Purchase Orders Approve Order Walk in Usage Reports & Analytics Ongoing Inventory Route to Departments Receiving 3-Way Match & GL Integration

4 Challenges Labor intensive processes Disparate systems Error prone Inaccurate information Inconsistent practices Lack of control No visibility Multiple items for the same thing Inability to manage costs Staffing constraints Limited space

5 Ways technology can improve the supply chain Control Product standardization Price and contract compliancy Customizable requisition and/or order templates Approval routing Efficiency Single portal for all orders Par level management with auto suggestions Purchase orders, receiving & invoice processing electronically Barcode technology Service Web-based application Extensive reporting functions Implementation services Ongoing support

6 Key features to look for Multiple Organizations Multiple facilities Single item master Unlimited inventory locations Requisitioning Purchase orders Receiving Departmental usage Patient charging Invoice 3 way matching Accounting code management Contract & price management Par Level & Min-Max management Auto-replenishment Approval Rules Barcode technology Customizable reporting Import & Export functions Interface connectivity User driven access Connectivity to multiple vendors

7 Integrations are invaluable Clinical and Financial Usage Price update Accounts Payable Suppliers Supply Chain Mgt System Clinical Staff EDI/VANs E-Fax Financial Systems Barcode Scanning

8 A manual PO could be costly Average Cost to Process a Complete Purchase Transaction Established Supplier New Supplier Low Average High Low Average High Current Cost $ $ $ $ $ $ The National Institute of Supply Chain Management found that automating the Supply Chain reduces transaction costs by approximately 42% for a savings of $40.92 per Purchase Order. In a recent study by the Center for Advanced Purchasing, 169 companies were surveyed to help determine the cost of processing a purchase order. All costs were considered in the survey: labor cost with benefits, overhead, time and cost to fix errors, delivery cost ( , mail, fax), office supplies, paper cost, telephone, computer hardware, and software costs. The study took an end-to-end approach to determine every cost that went into the tasks associated with processing a purchase order.

9 Potential savings opportunities Purchasing Transaction Costs Purchasing Order Fulfillment Time Purchasing Cycle Time Number of Suppliers Price Paid for Goods FTE's to Support Purchase Transactions 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% From a Study by the Center for Advanced Purchasing Studies; Robert J. Trent, PhD and Michael G. Kolchin, D.B.A., C.P.M. of Lehigh University

10 Radiopharmaceutical company reduced costs across their network Each of its 60 pharmacy sites had always purchased supplies independently This group used McKesson Inventory Manager to audit the medical and office supplies each site was purchasing and then standardized products across the network based on common preferences, quality standards and regulatory requirements Reduced cost of processing orders by 30% Technology provided a core structure to be able to build one cohesive organization, versus 60 independent locations doing their own thing Some results may vary

11 Rehab Center reduces waste and ordering times Staff use their ID badges at kiosks located throughout the building, select a patient & scan the items needed tracking each item to a specific patient Set up min & max levels that trigger orders automatically to replenish inventory in supply rooms and pods Facility also uses the system to manage non-medical inventory such as housekeeping, janitorial and office supplies Reduced on-the-shelf stock by 36% by eliminating over-ordering practices and monitoring actual usage in real time Accurately recorded 95% of its inventory usage Reduced expired inventory waste by 75% Reduced employee time spent ordering supplies by at least 50% Eliminated paying expedited shipping charges for express orders Streamlined vendor orders through a single platform Some results may vary

12 Orthopedic Clinic decreasing costs & increasing efficiency An eight location specialty group where each location purchased and managed their medical and non-medical supplies in silos without intervention from materials management Once the assessment was complete, Group had approximately four to six months of inventory on hand and more than $100K on the shelf Customized par levels were established to reflect actual usage Using bar code technology allowed for quick and efficient management of products An auto prompt is triggered suggesting replenishment quantities for reorder With the implementation of a technology solution, Med-Surg inventory was reduced by 30% with more than $50K in inventory reductions Reduced inventory days on hand from six months to two weeks Some results may vary

13 Surgery Center enable best practice processes across their facilities This Surgery Center was looking for supply cost reduction, contract compliance, corporate visibility into their network of facilities and improve inventory control Generated $1,000,000 in cost savings through contract utilization Defined formularies and enabled compliancy with the IOS program Time to process purchase orders has been reduced by 50% Electronic purchase orders have gone from 0% to 62% A push of a button has replaced the old process The average inventory value has greatly decreased Invoice discrepancy rate has decreased with the 3-way match Invoice processing has decreased with the electronic approval to pay process and interface to MAS 90 with all GL coding Some results may vary

14 Many solutions to choose from McKesson SupplyManager SM McKesson ScanManager SM McKesson ScanManager Plus SM / IOS McKesson Inventory Manager SM

15 Q&A Thank you Contact me at

16 Disclaimer Unless otherwise noted, the recommendations in this document were obtained from the National Institute of Supply Chain Management and Center for Advanced Purchasing. Be advised that information contained herein is intended to serve as a useful reference for informational purposes only and is not complete clinical information. This information is intended for use only by competent healthcare professionals exercising judgment in providing care. McKesson cannot be held responsible for the continued currency of or for any errors or omissions in the information. McKesson makes no representations or warranties the information contained in this complimentary webinar and disclaims all responsibility for, the accuracy or suitability of any information in the webinar and related materials; all such content is provided on an as is basis. MCKESSON FURTHER DISCLAIMS ALL WARRANTIES REGARDING THE CONTENTS OF THESE MATERIALS AND ANY PRODUCTS OR SERVICES DISCUSSED THEREIN, INCLUDING WITHOUT LIMITATION ALL WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. The content of webinar and related materials should not be construed as legal advice and is intended solely for the use of a competent healthcare professional. Eligibility Requirements For Participating in a McKesson Webinar: This webinar is not open to the general public. Your participation in this webinar cannot be transferred or assigned to anyone for any reason. You do not have to be a current customer of, purchase products from, or be affiliated with, McKesson, in order to participate in the webinars. McKesson, in its sole discretion, may terminate this promotion at any time. Due to certain regulatory restrictions, this promotion cannot be offered to health care providers licensed in Vermont and/or to government employees.