It’s no secret that the healthcare industry’s inefficient supply chain is in dire need of repair.
Pressures to reduce costs, address compliance issues, and improve the patient experience are strong. Additionally, the overall healthcare costs continue to climb, forcing healthcare systems to deal with soaring expenses as they seek new ways to offer high-quality, affordable services.
Now, when healthcare facilities lose money, they stand the risk of being consolidated within a large healthcare network. Eliminating waste is crucial to their survival. How can healthcare facilities go lean enough to reduce costs and improve their operational efficiency without sacrificing quality? Focus on the small details that add up to wasted time and money.
A problem (and an Opportunity)
The supply chain at many hospitals is often splintered and inefficient. These flaws no only put patients at risk, but cost billions, weakening hospital leaders’ abilities to make necessary changes. However, this problem presents an opportunity for hospitals to remodel their supply chains with renewed vitality and efficiency, specifically to create a process that will not only streamline operations, but produce more sweeping benefits—dramatically improving patient care, reducing costs, and potentially saving lives.
While the corporate sector has been optimizing the supply chain for years, the healthcare sector has been lagging. According to McKinsey’s Strengthening Health Care’s Supply Chain: A Five-Step Plan, “Supply chains now account for nearly 25% of pharmaceutical costs and more than 40% of medical-device costs. The annual spending is so vast— about $230 billion on pharmaceuticals and $122 billion on devices— that even minor efficiency gains could free up billions of dollars for investments everywhere.”
The article goes on to state that if hospitals and healthcare facilities adopted some of the advances that are already well-established in other industries, total costs— from the supply chain and external areas, such as patient care—could fall by as much as $130 billion.
Why Healthcare is Behind the Supply Chain Curve (and What It’s Doing to the Industry
1. Healthcare organizations are losing money due to waste in the supply chain.
Manual processes and human error are driving revenue leakage. Many modern healthcare facilities are still using the outmoded manual systems to track their inbound shipments. This inefficient “dock-to-delivery” process is often manual or paper-based, leading to a variety of problems that originate at the receiving dock.
If a hospital doesn’t implement a systematic process for recording and delivering every package, it’s hard to record proof of delivery in a manner that can be easily searched later. Should a package go missing, there’s little recourse—staff is forced to spend valuable time trying to track the package down.
Manual tracking processes lead to more inefficiencies thanks in large part to its boundless potential for error. Factor in the notification issues, and you see why it’s not a sustainable method. If someone at your hospital must be alerted when a package arrives, they’ll likely contact the receiving center, where the message will be left on a slip of paper on someone’s (probably cluttered) desk. What’s the likelihood that this will result in the package recipient getting notification as soon as the package is received? The process certainly does nothing to instill confidence.
With manual tracking systems, crucial package details could be taped to a box—and that’s the best-case scenario—and your staff’s methods of retaining internal addresses are seriously limited. This leads to misrouted or even missing packages.
Manual tracking has many limitations— antiquated record-keeping and excessive waste (including wasted hours, costs, and resources) being at the top of the list. There’s also a significant lack of efficiency in the work environment, which could result in an unhappy and unproductive staff.
Wasted staff time. Wasted money. Lost or misplaced supplies. We could go on, but this leaky boat is in danger of sinking—fast.
A healthcare facility requires happy and productive employees to ensure that the job is done right. Inefficiencies and holes in the chain of custody will impact your healthcare facility in ways that go beyond monetary. Staff will consistently struggle to successfully complete deliveries and fix issues that pop up over the course of their day if they’re forced to work within an inefficient system. This feeling of helplessness will lead to dissatisfaction and, potentially, high turnover.
Wasted staff time. Wasted money. Lost or misplaced supplies. We could go on, but this leaky boat is in danger of sinking—fast. Why? It’s all due to the outdated, horse-and-buggy era “dock-to-delivery” process. It’s time to set the sinking ship on course again.
What is the Solution?
The solution starts when a hospital or healthcare facility has the ability to accurately track product all the way through the facility’s supply chain with a state-of-the-art automated tracking solution. This ensures visibility, accountability, and control.
A full-featured, end-to-end receiving and delivery solution combines the efficiency and precision required to stop the excesses and waste that result in significant revenue loss.
As the Mckinsey article states, “The good news is that models do exist to strengthen and improve the health-care supply chain. We believe that by learning from the experience of industries such as fast-moving consumer goods (FMCG), the health-care sector could cut production lead times and obsolescence, while manufacturers, distributors, hospitals, and pharmacies could carry significantly smaller inventories.”
Giving your facility the ability to track or trace your packages’ chain of custody will only enhance the shipping and receiving department’s credibility and enable them to create a verifiable trail for any package that comes into the facility. This will improve efficiency, accuracy, and dependability.
2. Poor Management of the Supply Chain Leads to Delays in Delivery of Live Tissue, Surgical Instruments, and Critical Supplies
Failure to properly manage your facility’s supply chain can result in delayed critical surgeries, compromised patient safety, and increased risk to your whole facility.
Many healthcare facilities are still using outdated systems to track crucial inbound shipments. The systems run the gamut, from manual logbooks to inefficient receiving dock systems. This very unproductive dock-to-delivery tracking—frequently paper-based—leads to a variety of issues, all originating at the receiving dock, and all with the potential to dramatically impact your facility.
Consider a trip to the emergency room…
Unless you’re at the ER for a life-threatening emergency, you probably know you’re in for a long, long wait. The average wait time to get into the treatment room is 30 minutes, and the treatment time can take up to 90 minutes, according to a study by the Centers for Disease Control and Prevention. In other words, you’ll be spending a minimum of two hours trying to get the care you need—and that’s just the nationwide average. In some parts of the country, that time could even be doubled.
Hospital staff spend precious hours trying to track down misplaced or lost medical supplies.
There’s one common denominator in any hospital: sick people, all of whom want to get better as soon as possible. In order to get the care they require, these patients need a variety of supplies. Whether it’s specific medication or basic materials like gloves, their care depends on the prompt delivery of these supplies. Manual tracking with paper logs will slow down packages that contain potentially life-saving supplies; the last thing any healthcare facility wants is for their antiquated system to jeopardize the health and well-being of their patients.
So, the hospital staff spends precious time trying to track down misplaced or lost medical supplies. Time is lost, and patients are put at risk. Your hospital’s growth will lead to a higher volume of parcels, which could lead to even more problems. Stop potential supply chain issues before they get out of hand.
The last thing any healthcare facility wants is for their antiquated system to jeopardize the health and well-being of their patients.
What is the Solution?
An automated receiving and delivery system will ensure everything gets where it needs to be, quickly and efficiently. It will make your healthcare supply chain more efficient. You’ll have the power to document the movement of every package, every step of the way.
Imagine having access to easy one-step purchase order confirmation, real-time reporting, and complete visibility from the receipt of the packages at the hospital’s dock to the final delivery. You and your staff can track critical items from dock to patient, significantly saving time and reducing risk.
Think of the ER, where seconds count. You want to eliminate the precious minutes hospital staff waste on routine tasks, such as tracking down shipments of vital supplies. Taking a cue from the corporate sector and developing internal tracking capabilities can have a dramatic impact on overall performance, patient safety, and the bottom line.
Implementing an automated receiving and delivery system will free up staff, aid them in logging important supplies faster, locate critical packages quickly, and dramatically improve the efficiency of your facility’s receiving and delivery operations.
3. Healthcare Facilities Struggle with Inefficient Systems and Wasted Labor
Ideally, as soon as a package reaches the receiving dock at a large hospital, the receiving staff should be able to immediately scan the package. This will be the first step in the chain of custody, which helps staff track it throughout the hospital, regardless of how many stops it makes before it’s safely delivered to the listed recipient. When your staff is shackled to a paper log, there’s no chance to create a proper chain of custody that will record every change of hands.
For a large hospital, maintaining a proper chain of custody via manual log is next to impossible. The volume of packages alone makes this a ridiculous request, as it would require far too much time—time that’s already dedicated to attempting to located missing packages.
The current approach to supply chain management at most hospitals requires intensive staffing to handle multiple, often redundant systems that lack data sharing and transparency needed to prevent waste.
—Source: Cardinal Health. “Survey Shows Hospital Decision Makers Identify Supply Chain Effectiveness Among Top Priorities.” Press release. December, 2015.
Using these old-fashioned and inefficient dock-to-delivery receiving and delivery systems, most often paper-based, can lead to a variety of problems— most of which start at the receiving dock. Manual systems lead to inefficient workflows, including excessive labor spent on unnecessary and redundant tasks. There’s no proof of delivery, poor notification procedures, failure to record packages, and an erratic delivery process, all of which lead to an abundance of the shipping and receiving department’s most dreaded call: “WHERE’S MY PACKAGE?”
Doing more work than necessary results in a phenomenon known as overprocessing. This includes performing unnecessary steps, resulting in wasted time and money, putting additional exertion on your equipment and materials as well as your staff. You could be spending this wasted time more fruitfully—specifically, focusing on patient care.
Excess motion is another form of waste which occurs when staff performs tasks that don’t contribute to the value of a specific process. For instance, when valuable medical staff, such as nurses or doctors, spend excessive time searching for a piece of missing or misplaced equipment, this isn’t the best use of their time.
What is the Solution?
Automating time-consuming supply chain tasks will empower hospital staff to work more efficiently and focus on patient care responsibilities. Consider using a system that’s driven by data (read: efficient and transparent) so it will allow caregivers the time they need to properly care for patients, rather than waste it counting products or tracking down packages.
Incorporating digital tracking for inbound items will lead to zero misplaced packages or packages that seem to have disappeared from the facility altogether. Also, your current package and purchase order receiving processes will be completely overhauled, too. Digital tracking will enable you to streamline your dock-to-delivery process, taking control of the chain of custody for every package that enters your receiving dock.
Automating time-consuming supply chain tasks empower hospital staff to work more efficiently and focus more on patient care responsibilities.
Ultimately, an automated receiving and delivery system will enable your department to improve their efficiency. Imagine that your facility’s systems will be completely accurate; you’ll initiate the chain of custody as soon as any package arrives. An unbreakable chain of custody will give you one valuable asset: proof of delivery.
How Can You Lead the Charge and Transform Your Healthcare Supply Chain?
Improve Patient Care
The top of any healthcare facility’s list is patient care.
When you’re not wasting valuable time manually logging packages, you’ll be able to devote more time for improving patient care. Implementing an automated receiving and tracking system can only improve the speed and efficiency with which your staff processes packages.
In fact, customers who have transitioned to an automated system report that they are now processing packages in under ten seconds. The contrast between this new time and the one to ten minutes processing used to take is stark.
Freeing up time taken up by locating packages and orders for patient care is significantly more beneficial for the clinical staff; they’re doing what they’re paid to do, not searching for the tools they need to do their job well. Most hospitals have taken the steps toward electronic patient records; why not move to automated receiving and tracking?
Any modern, state-of-the-art hospital prides itself on its embrace of technology. Carry that over to the receiving department. So many aspects of a hospital’s day-to-day could benefit from automating processes that inhibit patient care, including manual logs.
Automated package tracking systems save busy medical staff precious time—time that could be far better spent improving a patient’s health and well-being than tracking down a missing package containing vital supplies. The uptick in patient satisfaction when staff has the time to attend to them rather than dealing with lost packages will likely be impressive, and all it takes to make the change is to implement an efficient package tracking system.
There’s little doubt that improving your facility’s supply chain will also offer your patients access to safer, lower-cost care. The fastest and easiest way to get there is to get rid of your outdated receiving and delivery solution and drag your healthcare facility to the 21st century with an automated system.
Streamline Operations and Reduce Costs
Does your healthcare organization have effective mechanisms for controlling supply chain costs?
Do you have performance metrics for suppliers?
Are your RMAs handled efficiently?
Is the quality of your Supply Chain raising the cost of your operations?
Is your current Supply Chain/Receiving Operation optimized to your business needs?
If the answers to those questions aren’t a resounding “Yes,” then it’s time you usher in a new era of efficiency with an automated package tracking system.
While manual logs typically rely on paper and pencil, automated package tracking software can easily be integrated with you current MMIS system. Not only will this eliminate the possibility of error when you scan packages as soon as they hit the receiving dock, it also removes the aspect of human error. No more transposed numbers, no more illegible handwriting, and no more lapse in patient care as packages are mis-delivered due to a simple mistake.
Failure to get the package to the right place at the right time can be a matter of life or death.
Additionally, time spent logging packages will be significantly reduced; rather than waiting for each important package to be entered by hand, a quick scan will get the necessary supplies where they need to be before they’re even missed. The medical staff will know precisely what they have in stock, as they can locate anything with just a few mouse clicks.
Some packages require more careful handling than others. Take, for instance, packages that fall under the FDA/Joint Commission requirements, such as live tissue or organs. These packages require speed and precision to be sure that they’re delivered with the sense of urgency that they merit. Failure to get the package to the right place at the right time can be a matter of life or death.
When it comes to compliance and risk management, it’s important that you ensure that you’ve got the highest level of safety and traceability for all items that come through your facility, particularly live tissue and medical devices. Be sure that your processes are in compliance with current and future state and federal regulations, including organizations such as the Joint Commission, HIPAA, and Sarbanes Oxeley.
Make Sure Urgent Packages are Delivered Quickly
Sometimes, a package comes in to your receiving dock and it’s labeled urgent. What’s the protocol? Does this high-priority item sit, waiting its turn as all the packages before it are manually logged? Or is it scanned quickly, to prevent a mishandling mishap?
In a medical facility, urgent packages aren’t just a luxury. Urgent often means that if a patient doesn’t get the content of the package immediately, the patient’s care could be compromised. Having a plan in place will ensure that your patients won’t be kept from life-saving medical devices or medications because the package was delayed in receiving. An automated receiving and delivery system will ensure that every package gets where it needs to go when it needs to be there, and it can also guarantee that urgent packages are treated with just that—urgency. This type of package tracking will help your hospital take better care of patients.
Having a plan in place will ensure that your patients won’t be kept from life-saving medical devices or medications because the package was delayed in receiving.
Make Sure Packages are Easily Trackable
One of the big advantages of an automated receiving and delivering system is the transparency. From the moment the staff scans the package upon its arrival in the receiving dock, a chain of custody is established. Every time the package changes hands, the change is noted within the software, until it’s finally delivered to the proper recipient.
At every point in the delivery process, regardless of the package’s size, the package will be scanned— anyone can determine the package’s location with a few mouse clicks. The dreaded “Where’s my package?” calls can be easily resolved with a fast check on the computer.
Effectively Manage Supply Chain Costs
An automated receiving and delivery system such as VueturaTrac creates a one-step purchase order confirmation process, complete with a seamless integration to all ERP/MMIS systems. Scanning each package upon arrival dramatically decreases the opportunity for human error, and you’ll be able to easily track the location of any package within your hospital, reducing man-hours involved for all staff.
Real-time reporting, operational data analysis, and improved sustainability are added benefits. The fact of the matter is that a system like this will help you lead the charge of cost savings—you’ll be the hero of the hospital when it’s seen how much you save.
You’ll be the hero of the hospital when it’s seen how much you save.
It’s Time to Improve Your Supply Chain
Wouldn’t you like to:
- Achieve and maintain 100% of the supply chain from manufacture to bedside?
- Bring accountability, visibility, and control to your facility?
- Have an end-to-end integrated system that not only streamlines your dock-to-delivery process, but helps patient care and reduces costs?
- Utilizes supply chain best practices, data standardization, and supply chain intelligence?
[A 2016 infographic, based on a Cardinal Health survey of 150 healthcare decision-makers shows that they place supply chain as top priority]
Transform Your Healthcare Supply Chain with Advanced Tracking Solutions
The new EHR requirements set forth by Medicare and Medicaid have turned electronic health records from a luxury into a necessity. In fact, these government health agencies were even offering hospitals and healthcare facilities financial incentivization to make the leap to EHR before the deadline passed.
Electronic records make a lot of sense for today’s hospital. They’re easy to secure, they free up valuable real estate within the facility, and they’re extremely searchable. Technology has significantly improved your hospital’s efficiency in the records department— why not carry that over to shipping and receiving?
Sure, manual logs have been the way things have been done for years, but that doesn’t mean that’s the way they should continue to be done. (After all, your grandparents’ grandparents rode horses everywhere they went… are you willing to take on that form of horsepower to get to work?) Updating your processes will only improve and streamline your department, and an automated receiving and delivery system is the most efficient way to make the switch.
That’s how you lead the charge! We know it’s not possible to transform your supply chain overnight, but by working toward pulling your receiving department out of the dark ages and into a period of lean efficiency, you’ll see significant payoffs. Manual tracking has so many limitations, but the primary one is waste: wasted time, wasted dollars, and wasted resources. By shifting to a new way, you’ll be viewed as a hero who reduced waste and created tremendous value for your facility.
The tricky part of the transition comes when you try to focus your efforts on just one area. Don’t attempt to overhaul everything at once; instead, set your sights on one spot—your healthcare facility’s receiving dock.
