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Applying data analytics software to the hospital supply chain

Analytics software can be used for more than clinical data. Hospitals crunching supply chain numbers for order fulfillment timeliness and accuracy can see bottom line improvements.

BOSTON -- Meaningful use rules are pushing doctors and IT leaders to work together and implement fledgling clinical data analytics software and clinical decision support systems. Such technologies have two key benefits -- improving patient care and allowing facilities to react to illnesses quickly, before they become acute and require hospitalizations. In the back office, though, hospital supply chain managers are turning to data analytics software to help bolster the bottom line.

At the Lawson Software Inc. Conference and User Exchange (CUE) 2011, three representatives from Catholic Health East -- comprising 32 hospitals from Florida to Maine -- explained how analytics software has helped the provider fine-tune supply chain management by keeping much more detailed tabs on vendor performance between its facilities.

As beta testers on Lawson Analytics for Healthcare, a new application announced at the conference, Manager of Application Development Kimberly Martin and two of her colleagues discussed how applying business intelligence to human resources, supply chain and financial information helped create efficiencies.

The hospital chain -- which uses Lawson supply chain management software -- already had a pretty good grip on orders and logistics, Martin said. However, data analytics software has helped it even more finely tune the supply chain to be even closer to just-in-time by harmonizing Catholic East's data sets with that of its vendors.

"From our end, we're trying to make sure we're being efficient -- using our contracts, getting the requisitions in and purchase orders out quickly," said Michael Weber, manager of supply chain data analytics. "We're also working with a particular distributor. We had to talk their language. Otherwise, it's just our information against theirs. So we wanted [analytics reports] to be molded to their distribution centers so we could talk apples to apples with them, with our data underlying in it."

Metrics assess vendor performance in the hospital supply chain

Specifically, Lawson analytics lets Catholic Health East better understand metrics such as on-time delivery of supplies, as well as the completeness and accuracy of orders they deliver.

The pre-analytics part of the job -- collecting and normalizing data from the 32 hospitals in time for a daily refresh -- turned out to be more difficult than running the analytics.

"The hardest part was just going through and looking at the data and making sure we agreed with how the data was organized," Martin said.

Then came the assembly of data in one repository -- and, per Catholic Health East's policy, securing it so that one hospital can't see another's supply chain data.

After collecting supply chain data each day, Catholic Health East groups its hospitals together in regions. Its Lawson analytics application aligns these regions with its vendors' various distribution centers to assess delivery timeliness and order fulfillment success rates. The data analytics software will also let supply chain leaders see whether the same vendor is changing some hospitals higher prices for the same item. The next project for the team, officials said, is explaining that phenomenon to vendors and leveling the pricing across all Catholic Health East hospitals.

Vendor feedback on data analytics software results

Reporting with Lawson S3 Supply Chain management is still so new that Catholic Health East hasn't been able to identify any particular doctor or a hospital department with a specific hospital supply chain issue that has been solved, said Gerald Driscoll, director of supply chain systems.

However, he added, the one vendor who saw a preview of the system was agreeable to having its performance measured with this new analytics yardstick -- albeit with a few suggested tweaks.

Martin noted that data analytics software shortens processes that previously took weeks to one day. By showing vendors exceptions to normal order fulfillment one day after they show up -- whether they involve a single item or a class of items on an order -- will enable vendors to solve problems more quickly and cheaply than before.

Data analytics software also gives materials managers at each hospital a view of what products are being ordered in accordance with vendor contracts, through which Catholic Health East has negotiated lower prices, and which are being ordered off-contract at more expensive rates.

Before, Martin said, "by the time you were done doing the analysis, a whole different set of problems might have shown up….I can make my processes and my system so much more efficient. By gaining that efficiency, I am going to save dollars."

Let us know what you think about the story; email Don Fluckinger, Features Writer.

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