PRODUCTS & SERVICES
supplier removes stents and pacemakers the materials management department, sources. The project is centered around re-
from Hospital A because they are needed cardiac cath lab department and surgery ducing expenses in their cardiology area,
at Hospital B. Hospital A would never have departments, including consignment and we are doing inventory cost reduction
known, except a hospital employee noticed products. through both PAR optimization and stra-
the supplier removing the cardiac supplies. • Communicate with all stakeholders in tegic sourcing.
The employee was told the supplies would the hospital supply chain on a regular We expect to save them a minimum of
be replaced at Hospital A in good time. The basis. $1 million. While I firmly believe that ma-
problem presented: What if the supplies • Design a consignment process that all terials [management] must be proactively
were not replaced, and Hospital A needed parties buy into and manage to that involved in gaining control over the in-
them? The consignment form process was process. ventory process throughout the hospital,
also implemented at this system, funnel- • Develop a contract document that in- it has been very gratifying to involve the
ing all consignment inventory through the corporates all the features to protect the department clinicians and their business
materials management department, to hospital and supplier that is generic in manager in the process. What we have
track consignment supplies. Also, all sup- format, and standardize across your learned is that they were only monitoring
plies and equipment were kept in a secure system wherever possible. expenses from month to month and
location where only a hospital employee • Assume nothing. watching their budget numbers, which
could allow entry and exit of consignment had been increasing steadily but at a rate
supplies and equipment by the supplier.
Michael Neely,
they thought was acceptable.
Useful tips:
president and
They had never taken a physical inven-
• Identify all parties involved in the daily
managing principal,
tory and really had no concept of how
supply chain process from decision mak-
Perimeter Solutions
much product and dollars they had on the
ing to purchasing, including all depart-
Group LLC, Atlanta
shelf. They simply reordered whenever
ments, people involved, value analysis they used something and also ordered new
teams. Clinical items as they came on the market without
• Evaluate all parts of the materials pro- cooperation eliminating older products – anything to
cess, including consignment. I am working on a project in Boston at a keep the physicians happy. As a result,
• Ensure measures are in place to track all major hospital, which needs to remain they had significant issues with products
supply and material entry and exit from nameless, with Appleseed Healthcare Re- See INVENTORY MGMT on page 58