Shift to a Demand-Driven Supply Chain (Part 2)

By Douglas Lowe

May 5, 2017

It’s (Still) All About the Data

We have data standards in healthcare, right? So do we really have data problems? (And what does this have to do with building a demand-driven supply chain?) If you think of a demand-driven supply chain as an environment where you’re sending real-time demand signals up and down the system, standardized data is probably the most fundamental building block. Yet in healthcare, at the heart of the data issue is still the inconsistency of data standards.

I often see hospitals, across their various systems and facilities, using different part numbers and descriptions for the same products.  These part numbers and descriptions vary from department to department from facility to facility.  I’ve even seen variance from one nursing unit to another within the same organization. And in recent years, while it’s become more common to see hospitals employing GS1 GTIN numbers, many are still using product descriptions that include:

  • MMIS/ERP generated numbers
  • Manufacturer numbers
  • Combined distributor/vendor numbers
  • Packaging string numbers
  • Even a nurse’s name!

When I hear supply chain leaders talk about how long it’s taken to eliminate manual processes, my mind immediately goes to data consistency. Applying an industry-wide data standard – in every facility, in every system - would create an environment to systematically identify and describe products and supplies, and create the ability to send demand signals throughout the supply chain.

How do we start?  With a single uniform data standard deployed across all disparate systems and processes within a hospital, and the item master as the source of truth. With data coming out of the item master flowing into the EHR, charge master and OR Information systems, and to the asset management, inventory and requisitioning and procurement system, it becomes possible to consolidate, coordinate and centralize the varied requirements for products and supplies.

It’s Chaos!

The lack of data standards creates complexity, complexity creates chaos, chaos creates inefficiency in our systems and processes. If we believe the role of supply chain in healthcare is to ensure right products, right place, right time, right price, then we can also consider that data standards employed across the enterprise can contribute to fulfilling our supply chain goal by levelling the playing field with a consistent uniform language.  This also gives us a common language to automate manual processes.

Take 3 Steps

A three-step discipline can be used to ensure technology and automation solutions drive toward the development of a demand-driven supply chain:

  1. Understand the key business processes required to operate your business successfully
  2. Simplify and streamline business processes, beginning with customer interfaces
  3. Automate only after understanding and simplifying. Never, ever automate complexity!

Pick a Place and Start

Get started by using the 80/20 approach.  A small number of items account for a significant portion of the results. First, identify the 20%.  Next, remember –

  • Complexity blurs importance
  • Simplicity focuses action
  • Focused actions improve performance

Third, take time out of your processes to make your department faster, more nimble and responsive, and adaptable to the needs of your customer. Spend time only on those things that add value for your customer and when you look at processes in this way, you’ll see over-complications, unnecessary steps, and be able to cut out time.

Finally, remember, never automate unnecessary complexity.

If you'd like to learn more about this topic, check out this recording to the recent webinar I hosted along with my colleague, Sophie Rutherford.

In the next blog, we’ll look at 10 Steps You Can Take in the OR – a use case to help get to a more demand-driven supply chain.