Living Lean at Vail Valley Medical Center
The following article was published in Colorado Healthcare News in July 2012.
My facility, Vail Valley Medical Center (VVMC and entities), was faced with the unique challenge of covering a 60 square mile territory when supplying 15 distribution sites in Eagle County (The Vail Valley), Colorado. Our primary distributor, Professional Hospital Supply (PHS), was located in Denver and provided bulk deliveries to the VVMC Gypsum warehouse located 40 miles from the main campus.
When I arrived at VVMC, the traditional "break bulk" warehouse model was being utilized by most medical facilities. However, it wasn't working well in this "remote resort" environment. VVMC is a small hospital with tremendous supply utilization due to its well-known orthopedic group. Space and receiving constraints added to the list of supply chain problems.
Our first step to resolve our supply chain problems was to purchase and install modern supply chain software. From there we began to concentrate on how best to enhance the distribution process.
Using Lean methodology, we examined each support process in the Supply Chain. We used a Lean problem solving technique called A3 and addressed each major issue and incorporated it back to the overall dimension of the entire process. We involved vendors, key stakeholders, and our internal team.
We made the decision to further enhance point-of-use technology for the entire system by using Pyxis Carefusion Supply Station. This product, primarily used for drug inventory, would instead be used for the intake and dispensing process of supplies.
Our existing process was to use Pyxis to send supply orders to our warehouse. Pick for supplies was done daily and incorporated 4 deliveries from Gypsum to the consumable locations. Product stock outs were common due to the timing of picks of daily refills.
Our new technique incorporated a Logical Unit of Measure or "LUM" delivery method interfacing with McKesson's Pathways Materials Management software. PYXIS Supply Stations were boarded as ship-to locations with Professional Hospital Supply. The station locations are changed within the materials management software by an automated daily SQL procedure to become "stockless". Orders are interfaced from Pyxis and auto-purchase orders are created and sent through the system.
This new environment allows orders to be sent directly to the primary distributors' EDI system, picked, and delivered in totes during early morning hours. The orders captured greater clinical daily demand, during off hours for our staff. LUM freed heavily used dock space during the day. It also provided fresh product fills at the beginning of the day shift. Stock outs have practically ended as the hospital is completely restocked by 7:00 AM.
Like Walmart's supply chain system, "paying at the register" and immediately generating orders to suppliers for restock was the right process for VVMC. This enhancement along with coordinated IT systems gave VVMC a base point for the entire retrofit.
Our fill rate goal is 99% on commodities and 100% on specialties. These necessary accuracy percentages pose their own set of problems. Every item has to be checked between PHS, PYXIS and VVMC item master, catalog numbers and units of measure needed to match perfectly or EDI invoices would fail.
Dave Petrowski, our logistics technical specialist, was brought in to develop and design the LUM process incorporating the various functional and technical integration strategies.
Contingency plans were incorporated to account for weather in the mountains or distributor failure to make delivery. When orders flow to Denver, non-PHS items are picked early morning in Gypsum. This allows for a full compliment of products to be refilled using LUM.
If PHS is unable to perform delivery, a contingency order is placed nightly from PYXIS where PYXIS delivery locations are switched back to the bulk environment and replenished from the Gypsum warehouse. Materials staff are redirected from Vail to Gypsum for a full or partial pick depending on the situation. One mid-day pick from Gypsum is turned on or off depending on the need.
We are constantly improving and tweaking the process. Information technology is the key to our success, and without having the right technical staff in place this project would have been impossible to complete. More importantly, talented detail oriented people make it work on both sides of the mountain.
Gerald "Jerry" Irvine has been with Vail Valley Medical Center since January 2007. He can be reached at email@example.com.