The Challenge:
The Hospital for Special Surgery, the number three ranked orthopedic hospital in the United States, prides itself on excellence in both its clinical and operational areas. To support that drive for excellence Carpedia was called in to help improve the Materials Management department. Materials Management is responsible for purchasing products and services for all hospital departments. It is also responsible for receiving and maintaining inventory, delivering supplies to patient floors, and overseeing the mail room.
In purchasing, the buyers were spending a large portion of their time explaining proper procedures for completing purchase orders to other departments, and following up on incomplete purchase orders. This reduced the time they could spend focusing on negotiating purchase savings. As well, with improvement in technology, the time from order placement to receipt of product has greatly decreased. Subsequently, the cycle time of processing purchase orders needed to decrease to allow products to be received in the HSS system when they arrived on the receiving dock. Any delays incurred in receiving the product caused delays in delivering the product. In addition, the patient floors supply requirement was being manually calculated, expanding the margin for error. The nursing stations were cluttered, and the space allocated to the supplies caused overages in some products and stock-outs in others.
Based on these challenges Carpedia was requested to work directly with HSS Management to improve procurement methods as well as to improve department labor productivity and the overall organization of the Materials Management area. The savings objective presented provided a 140% return on investment.
The Results:
The project generated a 180% return on the project investment. Some of the changes put in place to achieve the results included:
- Reassigned the scanning of nursing station inventory to one person to reduce errors in the products needed and to maintain consistency in the volume of products delivered.
- Created a method for accurately accounting for the supplies delivered to the patient floors.
- Designed a daily store room area schedule which allowed the employees to finish stocking the patient floors 2 hours early. Overtime has been reduced by 70%.
- Rearranged the supply storage room to make product easier to find and more accessible.
- Increased the number of cycle counts to improve inventory accuracy to 98%.
- Redesigned the nursing stations on the patient floors to maintain a neater appearance and make products easier to locate. New two day par levels were set to eliminate unnecessary product overage and reduce the number of stock outs.
- A support employee in Purchasing was trained to enter purchase orders. This reduced the cycle time of purchase order processing and decreased the delay in receiving and delivering product when it arrived on the dock.
- A purchasing information brochure was created for HSS. The brochure contains information on how to complete a purchase order and answers frequently asked questions. This has reduced phone calls to Purchasing and allows the Buyers to focus on negotiating savings.
The Client Experience:
“Carpedia has worked closely with the Materials Management team to analyze the opportunity, identify the changes necessary, and install a package that allows us to perform with a higher level of efficiency. Thank you for your team’s efforts to date, and we look forward to the follow up visits.”
Vice President, Hospital for Special Surgery