Current Operation

Realized Goals (annual numbers)

• Compartmentalized Supply Chain Operations

• Inventory Management

• Push Distribution

• Redundancies & Rework

• Basic Tools & Infrastructure

• Fill-rate = 82% (inpatient only)

Mercy Hospital & Medical Center – ChicagoCentralized Supply Chain Operation (Lean Supply/Demand Flow Program)

Objective 1: Save Critical Resources: Time and Money.Objective 2: Remove silos and develop a unified data driven supply chain operation.Objective 3: Introduce and sustain standard work and lean processes that drives continuous improvement.

Demand Flow Program Dashboard

Demand Flow is:A two bin supplies delivery system that uses visual triggersto deliver the right supplies, tothe right place, at the right cost

Demand Flow’s objective:To remove the end-user from the supplies management business, while optimizing supplyavailability, eliminating supplieslead time, and reducing cost

Demand Flow Node Report

Buyer Performance Dashboard Demand Flow Item Dashboard

SCM DashboardSCM Dashboard

Pre-Demand Flow Post Demand Flow

The JourneyKanbans sized exactly to LUM requirement

End-user removed fromsupplies management

Elimination of excess and obsolete supplies

Order placement is error-proofed

Product standards set and maintained

Cost per order line significantly decreased

OperationsJuly 2011

Pre-DF- General InpatientAverage SKU’s available = 164

Average time to service = 25 mins

Weekly time required to service floors 1-11= 252 hours

Pre-DF- General InpatientAverage SKU’s available = 278

Average time to service = 5 mins

Weekly time to service 1-11 under LUM = 60 hours

- 4.0FTE efficiency improvement- Redeployed to service OR, Lab, etc

Outpatient Lab ThenRoom Size: 7ft x 12ft (84sqft)

Supply Value: $8,943

SKU Variety: 41

Outpatient Lab NowRoom Size: 4ft x 7ft (28sqft)

Supply Value: $1,810

SKU Variety: 57

Demand Flow Volume Driven Cost Savings

Lean Impact (Efficiency)

~28,000 hoursclinical hours saved!

~$1,000,000saved on medical supply expense!

Too much clinical time was spent search-ing for supplies; delaying patient care

Inventory levels were “eyeballed”, reorder quantity was “best guess”

Unreliable system was driving millions in waste

Unreliable methods to ensure FIFO posed a risk to patients

Clutter led to chaos and cost

Excess supplies overran clinical work areas

• 28K clinical hours saved

• 30% less storage space

• 97% overall fill-rate

• 37K less stat/rush orders

• $900K saved in medical supply expense (ops ex)

• CS warehouse reduced $300K

• 8K to 4K sqft

• 33% supply chain staff efficiency

• 12 to 8FTE, who now also service surgical services

• Unified Supply Chain

• Focus on Total Cost of Ownership

• Variance Control

• Visibility to all Spend

• Data Driven Operation

• Kanban Distribution

• Disciplined Processes

• Standard Work

• Continuous Improvement

Lean Supply Demand Flow Program Data Impact