Case Study: How UAB Medical West transformed its supply chain strategy in one year

In 2014, Medical West Hospital (Bessemer, AL) was only one year away from its Joint Commission accreditation.

The hospital was experiencing a myriad of supply chain related challenges and knew it had to take action in order to demonstrate efficiency, optimize workflows and maintain quality of care. Poor supply organization, tedious workflows, and both under and over-stocking were the most immediate problems facing supply chain director Allen Brazelton.

“We had nursing supply closets on every floor and old cabinetry, some of which dated back to the 1960s,” says Brazelton. “On some floors we had products in cabinets behind doors, and we also had bins on the countertops. We already knew we wanted to gut [the nursing cabinets] out and have wire racks.” While nursing cabinets like these are commonly used, poor organization, clutter and a lack of visibility make it difficult to detect expired supplies.

They also struggled to manage par levels. Without consistent, real-time data to inform its ordering decisions, the hospital over-stocked of some supplies and encountered stock-outs for others.

“We were overstocking on nursing units, and in some cases we were running out of things,” says Brazelton. “We didn’t have a way to manage the par level and determine whether items were overstocked or not.”

The hospital had 25 storage locations at the time, 17 of which were managed by materials management staff using an inventory replenishment model. To manage par levels, staff followed a process that required traveling between floors, counting numerous items and printing off tickets. The tedious process was extremely manual, meaning mistakes were probable.

Staff in the other eight storage locations — all of which were specialized areas such as labor and delivery — didn’t have materials management support for supply replenishment, resulting in overstocking to compensate for potential stock-out situations.

These recurring problems spurred Medical West to rethink its supply chain management strategy. The hospital had one year to implement a solution that would increase supply visibility and reduce the amount of time clinicians spent identifying and retrieving items. Further, Medical West wanted this solution from an experienced leader that would solve its challenges around inventory and related workflows.

Brazelton was very interested in the immediate and long term benefits of the 2-Bin Kanban inventory management solution. “I’d already researched some hospitals that had used the 2-Bin Kanban solution from Cardinal Health and liked the success they’d had,” Brazelton says.

Kanban, which literally means “signal,” aligns inventory with the actual consumption of goods or use of supplies. In this system, each item is stored in two bins placed on shelves with one toward the front and the other behind it, ensuring first in, first out consumption. FIFO helps prevent the expiration of supplies managed at the bulk level. The 2-Bin Kanban inventory management solution is also supported by cloud-based software designed to aid in determining the exact amount of on-hand supplies that are needed.

So, ultimately, there is never too much or too little inventory. The right supplies are available whenever a nurse or clinician needs them, and no money is tied up in surplus supplies. This saves time, labor and revenue, and it supports patient safety initiatives for supply rooms.

After learning about the benefits of the 2-Bin Kanban system from Cardinal Health, Medical West gave the go ahead and implementation began in August 2014. “I liked Cardinal Health — [the solution] fit our hospital,” says Brazelton. “It was really a simpler system than some of the other systems out there.” By the end of 2014, Medical West and Cardinal Health were already discussing expansion of the 2-Bin Kanban inventory management solution to other parts of the hospital.

As a result of the 2-Bin Kanban system implementation, Medical West saw abundant success by way of four key outcomes:

1. Decreased expiry events
2. Over and under-stocking eliminated
3. Optimized clinical staff time
4. Increased visibility to products and supplies

To read all about how Allen and his team transformed their supply chain in one year, download the full case study – at no cost to you – through Becker’s Hospital Review.

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