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Oct 23 2012   1:04PM GMT

Automating the implantable device supply chain: What we have learned at McLeod Health

Posted by: Jenny Laurello
implantable devices, Medical devices, SCM, Supply chain management

Guest post by Dale Locklair, vice president, procurement & construction, McLeod Health

McLeod Health decided to take on a new challenge in February 2012 and take a leap forward in automating our supply chain processes. We realized we were lacking a smooth, automated process for tracking the many implantable devices that flow through our establishment each day despite, like so many other health care organizations across the country, having a handle on the majority of our supplies. We needed a better way to track replacement hips, knees, stents and other supplies.

We set out with the goal of filling in the gaps between us and our manufacturers in electronically managing implantable devices, which are driving higher health care costs. Health care is losing approximately $5 billion each year due to inefficient manual business processes and lost, wasted, or expired products.

Capturing product data electronically is one of the key steps toward this goal, even at the point of use in the operating room. McLeod Health has had a portal for entering device information in place for about five years, putting us ahead of many health care providers. Our staff members keyed in barcode information from these devices into our portal, so we could track what devices were being used and what we had on site. Once this information was added into the portal, it automatically created a purchase order and validated the device price through our connection with the GHX Exchange. However, there is a certain amount of human error and time involved with manual keying of information, as with all manual processes.  We started a pilot program with GHX to begin electronically capturing the barcode information of these devices, which would automatically be scanned into our portal in order to reduce time and error.

When we started this pilot, we quickly realized there was a challenge in how we communicated with some manufacturers and shared the information needed by both parties. For example, one of our manufacturers had slightly different bar codes for each of its manufacturing facilities – so one type of knee, if manufactured in three different places, could have one of three different codes. We had to overcome this information gap when devising a method to scan and identify these product codes into our portal. We successfully worked with our manufacturer to overcome this information hurdle.

The second challenge was overcoming our own culture. Yes, our staff members were used to working with the portal, but they were also used to manually keying in the product information. We had to explain that automation meant they would be available to do more hands-on tasks rather than sitting at a computer all day keying in product information. We also explained that automation did not mean anyone was going to lose their job.

The ability to scan the device barcodes, which are automatically turned into a purchase order, has eliminated a lot of work and human error. Our staff members are now available to work in more health care critical roles within the organization, which makes them happier with their jobs. There’s no question that the GHX pilot program has helped us streamline our process and resulted in time savings, though it’s still too early in the process to provide an exact figure on those savings. We are interested to see how much more time and cost we can save as we continue to improve our processes and expand the project to more manufacturers.

My advice to health care providers who are looking to automate their implantable device supply chains would be to start as soon as possible. For too long providers and suppliers were talking about automating this process, but nothing ever happened. GHX brought a group of us together about three years ago to discuss automation and find ways to make it happen so that everyone would win. Providers and suppliers who aren’t jumping on this opportunity are only contributing to the billions of dollars being wasted each year. My advice? Stop before it’s too late.

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