Benchmark for success in inventory management

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Portsmouth Hospitals NHS Trust has embarked on the first trust-wide roll out of an inventory management solution.

Jackie Pomroy, head of supply chain at NHS South of England Procurement Services details its progress.At Portsmouth Hospitals NHS Trust, our vision is to be recognised as a world-class hospital, leading the field through innovative healthcare solutions, focused on the best outcome for our patients, and delivered in a safe, caring and inspiring environment.

To contribute towards achieving this, our internal and external supply chains needed improvement to ensure we had complete end-to-end supply chain management. Our ultimate long- term goal was to have the ability to track all products through to point of use, at patient level.

Our goal sparked a review of existing supply chain practices and procedures, and revealed a number of issues. Clinical staff were informally managing inventory, placing and approving orders. Supermarket sweeps of store rooms by clinicians were a frequent occurrence due to inadequate advanced planning. Bad practices, along with a lack of reliable and accessible information created the risk of stock outs, as well as overstocking and significant wastage, largely as a result of out-of-date products and unknown levels of waste being disposed of.

We also suffered poor consignment stock management, a real liability for any trust; this created wastage, incorrect declaration of inventory value, ‘stock turns’ as low as two in some areas, and too much inventory in other areas. Issues with ICT were also apparent, with networks and a lack of interfaces to current systems, while supply chain knowledge was embedded in a few individuals rather than process.

Inventory was a moving target; stock levels constantly fluctuated, product identification was difficult, and a range of storage places existed from designated stock cupboards to the desk drawers of individuals.

An invest-to-save approach

In a large trust it was hard to believe there wasn’t an inventory management system in place; we knew what was purchased, but had no understanding of where products were, or when they were used.

This issue could not be turned around with a short-term fix, we needed an invest-to-save approach to support long-term plans, and ultimately the success of the Trust. The project began with the implementation an inventory management solution from Ingenica Solutions across a 27 theatre complex and 40 supporting locations. Other areas have been completed or are underway, with plans to roll the solution out fully across the Trust.

One of the main challenges in this project was the management of change and new processes, and utilising modern technology in a highly paced clinical environment. However the solution in place is a simple, powerful tool that is intuitive for staff to use. Ingenica Solutions also provides the first GS1 certified inventory management solution in the healthcare market, so as well as being an early adopter this technology, we are a leading force in the GS1 strategy.

Our interest in GS1 was propelled during the early stage of the project. We found no barcodes on many items, while two different types of clinical product in the theatre storeroom from two manufacturers shared the same barcode; this set alarm bells ringing, and indicated that the suppliers to the healthcare market were years behind other industries.

In cardiology, for instance, we needed the ability to scan all products out at point of use. We undertook a large exercise to cross reference all products into the inventory management system to capture product, lot and serial numbers, and expiry dates so we could scan products in and out to increase efficiency.

To carry this out without the use of barcodes would be totally inefficient, and would no doubt create mistakes. Therefore we asked our inventory management system supplier to develop the ability to strip out certain fields and read all types of barcode including Health Industry Bar Codes (HIBCs) and variations of Global Trade Item Numbers (GTINs). At the same time our contracts team looked at new contracts and requested barcode data from suppliers.

It was at this point we engaged with GS1 UK to formally work together to drive change.

This has since enabled us to build a rich database of accurate and up-to-date information, which feeds automatically into our inventory management system.

Real-time results

One of the most important factors to enable the NHS to act smarter with budgets, and become truly world class, is innovative technologies, something which has helped us make great strides in revolutionising the way we spend money.

Following implementation of the inventory management solution, real time results were secured in terms of both financial and service level; theatres management and procurement are now able to collate clear usage data, including costing and traceability down to patient level.

The benefits of the implementation were greater than expected. The financial savings speak for themselves and include balance sheet savings of £1.78m and £350,000 of consignment stock management savings.

Our procurement team is now empowered to provide a truly proactive service, agreeing with clinicians what is needed and ensuring supplies are delivered at point of use. Clinicians are no longer tangled up in administration duties, and three whole time equivalent (WTE) posts have been released to the frontline creating recurring savings of £108,000.

The supply chain team had no additions of staff; instead they improved processes and now deliver an enhanced service using technology. Before staff could order products by typing a description in a text box (which was unstructured data). These free text orders would be routed to procurement staff to investigate before release of the order – this work load is now not required releasing these procurement staff to contracting.

The changes have facilitated a cleaner, more organised environment. Within theatres, stock is now centrally located in one, secure, organised room, which has also removed the need for clinicians to store their own supplies and created space savings of £31,000.

Control, purchasing accountability and visibility has also been turned around. We have experienced a reduction in expired stock and obsolescence, we only have 0.1 per cent waste, and have reduced our stock holding by 20 per cent.

Supply chain management: the bigger picture

The implementation of a best practice inventory management solution has dramatically improved our operations, providing us with a bigger picture of supply chain management; we are now a long way towards our ultimate goal.

We’ve been able to use inventory management as a building block to ensure we manage our supply chain efficiently, and it has also helped us meet and exceed government requirements such as those in the eProcurement Strategy.

It’s been a long journey to this point, and we’ve worked tirelessly to build our status as the NHS benchmark for success in inventory management, and to also achieve the first trust-wide implementation. Inventory management has, at last, made its mark in healthcare.

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