Eliminate the Weak Links in Supply Chain: 4 Core Points

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Kyle McAndrewsSupply chain management plays a vital role in ambulatory surgery center success.

Kyle McAndrews, a project analyst with Facility Development & Management, consults for several multispecialty surgery centers and has seen firsthand commonly overlooked areas of supply chain management and the steps to take towards improved operations. Charles Dailey, vice president/business development of ASD Management, also has extensive experience in supply chain management for surgery centers across the country.

Overlooked areas
There are two key areas ambulatory surgery centers commonly overlook:

•    Group purchasing organization utilization: Most ASCs belong to a GPO, but many fail to use all that a GPO has to offer. Lack of alignment with a primary distributor paired with an underutilized GPO represents lost supply savings.
•    Standardization: Between physician preference items and relationships with multiple vendors, ASCs often don't realize the highest level of potential discounts.

Reviewing GPO contracts is important even at the management company level. "We looked at our materials management GPO contracting and after the review we realized our contracts needed to be restructured," says Mr. Dailey. "We assumed all our centers were covered but realized that some of our centers were not listed. So we realigned classification for the GPO to include all our centers and could achieve better pricing as a result."

Finding the solution
A strong relationship between a materials manager and GPO account manager is one of the simplest ways to keep on top of all of the tools available. Account managers can inform their ASC contacts of upcoming educational seminars, new service availability and of any expiring contracts. Regular contact also allows materials managers to ensure their ASC remains in the right pricing tier.

"A three-room center that is using their primary distributorship and GPO properly should be close if not on par with hospital level pricing for most of their med-surg supplies," says Mr. McAndrews.

Partnering with a management company opens the door to a team of experts prepared to identify and eliminate supply chain weaknesses. Forging a relationship with a management company can also allow ASCs access to bundled agreements including all centers under the management company's umbrella.

Mr. Dailey has worked with several centers to institute cost-savings programs in materials management such as reprocessing, alternative implant options, freight management and electronically ordering controlled substances.

"In the past, ordering controlled substances was manual, so it took a lot of time and was open for error," Mr. Dailey says. "The materials manager would fill out a form and order the brand name, but didn't know there was a cheaper generic available with the same quality standards. Now we use the McKesson Controlled Substance Ordering System online that provides us with generic equivalents that are available. They can order the generic equivalent online, and that saves time and money."
    
Maximizing efficiency
More is not always better. Multiple people involved with an ASC's ordering process engenders chaos rather than efficiency. In a streamlined ordering system, the materials manager will hold the primary responsibility and the director of nursing will be familiar with the process, so she can step up in the case of an absence.

Paper records are not uncommon in surgery centers, but the lack of an inventory management system takes a great deal of time out of the materials manger's day. An electronic system can track orders and materials and help establish par levels, leaving the materials manager free to hone in on other responsibilities.
 
Many ASD Management centers use an electronic program for inventory management. "They catalogue all the products we are using and extract pricing information so we can look at case costing," says Mr. Dailey. "We saw surgeons who were doing the same procedure but used different materials. We wer able to compare and contract costs so we could improve our spend."

Consignment items contribute to increased supply chain efficiency and cash on hand. Vendors become responsible for counting consignment items and replacing anything expired. The materials manager gains more time and the cost of expired items is completely eliminated.

Team involvement
Materials mangers are the key figures in supply chain operations, but all ASC team members have a hand in overall success of management success.

•    Physicians: Preference items will always remain a part of ASC supply chain, but working relationships with physicians can make strides in regulating materials used. "Most any physician can either champion or crush your objective with one word," says Mr. McAndrews.   
•    Management company leaders: Management companies oversee multiple ASCs and can offer strategic suggestions based on the best practices and mistakes of other centers.
•    Nursing staff and techs: Nurses and techs spend the majority of their time in the OR. They provide an invaluable clinical perspective.
•    Administrator and business office manager: These ASC leaders offer a financial perspective.
•    Front office staff: These staff managers collect all patient satisfaction information, including implants and medical supplies used during cases.

"For these reasons, open communication between a materials manager and the staff is crucial. Every staff member should be given an opportunity to voice their concerns regarding the development of supply chain operations," says Mr. McAndrews.
 All team members, though faced with time constraints, can look outside of the ASC to continue learning ways to improve supply chain and day-to-day operations. "Continuing education opportunities are very accessible in the healthcare industry," says Mr. McAndrews. Taking advantage of the opportunities available provides ASC employees with the resources to keep up with the rapid changes in healthcare.

More Articles on Supply Chain:
8 Questions to Ask for Materials Management Success
Easy Inventory Management: 5 Key Components
12 Statistics on Surgery Center Supply Chain Strategy & Physician Engagement

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