MANAGEMENT
also shine a spotlight in corners that were previously not visible at a granular level. The commercial sector highlights this
point perfectly. On the whole, businesses fully understand that supply chain and inventory management are core to operations and profitability. However, in the NHS, this has not yet been fully grasped. Instead, in many cases, old methods of managing inventory remain in practice despite being unable to cope with today’s modern healthcare environment. This is because the processes and systems often grew independently over the years and then were merged or heavily adapted as successive governments made their own changes and influences upon the NHS. The result is that supply chain and inventory management is often in disarray with antiquated systems and processes, which were perhaps a suitable option at the time, but are now a serious cause for concern. Taking a closer look at the current
situation, many hospitals utilise basic systems to create electronic orders for products. Often inaccurately referred to as inventory management, these type of systems actually only generate an electronic order from manual input. They do not effectively support good supply chain and inventory management, mainly due to the inefficiencies of leakage and inappropriate
This means that hospitals can secure a much greater understanding of costs, and are able to track and analyse the cost of care of individual patients.
buying that remain hidden from view. In many procurement departments, catalogue management still involes an excel spreadsheet. There is no closed loop between the procurement process and the consumption of the product on the patient. Inventory management closes that loop, providing better structured data and information to the procurement departments. They spend less time trying to manage unstructured data. If we add to the consumption the ability to track cost to patient it creates a whole new level of cost visibility that was not possible before. Often theatre stores present further issues: lack of physical storage, bad storage, overstocking, lack of product rotation, poor organisation, and unsecured messy environments are common. As a rule, clinical staff have become far too involved in admin- related tasks, taking up time from frontline duties. An example to illustrate this is that clinical staff may put deliveries away as
material management staff do not consider it their job, or vice versa; or indeed theatre staff have been known to help themselves to whatever is needed from the stores and even store items themselves. A further issue that has occurred in most hospitals at some stage is that clinicians are too involved in the buying process, frequently having more interaction with the suppliers than the procurement teams. Clinical staff will also get involved in chasing the delivery of products that have not arrived. In terms of the procurement process, sales representatives are seen much more frequently in the clinical areas than the procurement teams. Potentially clinical staff have more day-to-day interaction with the supplier than the procurement teams, which sales representatives have used in their favour. If a representative tells them something, it is often believed as there is nothing else to compare it to. A classic
Case study: Lancashire Teaching Hospitals NHS Foundation Trust
The ability to foster new solutions to realise cost savings and improve efficiencies is key to the success of all Trusts, and ultimately the NHS. Through the implementation of best practice solution, Atticus, Lancashire Teaching Hospitals NHS Foundation Trust, is at the forefront of successful inventory management, securing unprecedented cost-savings as a result of improved supply chain control and visibility.
Background
Lancashire Teaching Hospitals NHS Foundation Trust (LTH) provides health and wellbeing services for a population of more than 1.5 million, and employs approximately 7,000 members of staff across more than 400 sites. The Trust balances the provision of highly rated specialist services with providing acute services in Lancashire and South Cumbria. Not only is it one of the largest, it is also one of the highest performing Trusts in the country. With the vision to provide 21st century healthcare, the Trust continues to improve the lives of the people it serves. Service transformation is pivotal for future success, and year on year the Trust continues to deliver quality improvement and productivity efficiency savings; averaging 4% per annum recently. As part of this focus, one of the Trust’s key aims is to
make the best use of all resources; where its focus on inventory management and supply chain management begins.
The challenge
Under mounting pressure to cut costs and discover new, better, and more efficient ways of working, Trusts today face unprecedented financial challenges. Supply chains often lack maturity, and an assessment of supply chain management at LTH established that a move was necessary in order to progress the hospital from a very basic supply chain model to a much more mature position. Best practice inventory management is key to supply chain improvement, and the initial focus was to introduce new processes for the highest spend area – the operating theatres, with the aim of providing an organisation- wide view of inventory levels, and assigning costs to both the patient line and service line. One of the main drivers of change, which had the greatest impact on LTH’s desire to transform its inventory management, was its obligation to make quantifiable savings. Also, significant issues existed with stock management in the theatres department. Stock was poorly controlled, and regular ‘stock outs’ were experienced. The supply chain was primarily managed by clinical staff, with the support of limited stores staff, which was both ineffective and inefficient.
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To effect real change, LTH needed more than just a ‘top up’ process; a best practice inventory management solution with the ability to adapt to the Trust’s requirements would provide greater advantages. Ian Britcliffe, inventory management project manager at LTH explained: “The Trust responds well to clinical and workforce challenges, and we fully understood that to transform this situation, we needed to take control of our supply chain to drive much-needed savings and efficiencies. Some providers were keen for our Trust to adopt a ‘top up’ process, which was simply not the right solution for us. The lack of an appropriate system to manage these activities at the time was certainly holding us back and presented challenges.” The absence of inventory control and visibility meant a shortage of management information, which subsequently created issues including product wastage, the need for more storage space due to excess stock levels, and the inability to trace products. The Trust undertook a search for an advanced real-time solution from a specialist team that had demonstrated real results and understanding of healthcare supply chain operations.
The solution
The Trust appointed Ingenica Solutions to implement its proven, best practice system,
SEPTEMBER 2017
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