Cutting supply costs by clearing the clutter

Those years of begrudgingly picking up and organizing rooms may pay off in the materials management arena, as a cluttered supply closet could be detrimental to cost savings and even patient safety.

Todd Tabel, vice president of ERP solutions at McKesson Corp., writes that an unorganized supply closet negatively impacts financial and clinical success.

"Do your medical-surgical supply rooms remind you of a teenager's messy bedroom — things hanging out, cluttered shelves and a look of general mayhem?" he asks.  "Unorganized supply areas are a marker of unorganized processes and the lack of an automated, integrated inventory management system."

Mr. Tabel outlines five ways unorganized closets can lead to lost revenue.

1. Clinicians waste time searching for items and manually charging and ordering them.

2. Manually counting, ordering and replenishing inventory can lead to inflated supply management labor costs.

3. Disorganization can result in missed charges, which then results in a higher percentage of revenue loss in high-cost procedural areas.

4. Without items being in an automated system, organizations may not have adequate usage and volume data for reporting and planning, which throws of total cost-of-care data.

5. Having too much inventory means items go unused, so some items expire and can be stolen. Furthermore, excess items use up "valuable floor space" that could be used for higher revenue-generating services, Mr. Tabel wrote.

Here are two ways unorganized closets can compromise patient safety, according to Mr. Tabel.

1. Clinicians in unorganized closets may pick the wrong items, leading to delayed case starts and lower throughput, as well as potentially leading to an adverse patient event.

2. As nurses deal with low-value supply duties, there is less time to actually spend with the patients.

"By automating and integrating supply functions with the right point of use systems, you can reduce your supply spend, increase charge capture, and ensure that the right supplies are available when needed," writes Mr. Tabel. "And you can clear supply duties off the plate of your clinicians so they can focus on what they do best — take care of patients."

More articles on supply chain:

OpenMarkets, GNYHA Services extend agreement 
Not seeing cost saving results in supply chain? 5 underlying issues 
6 of the largest GPOs 

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