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_________________________________
Integrated Supply Chain Management
Local Health Integration Network
of
Erie St. Clair
__________________________________________________________
Warren Chant
Chair, iSCM Steering Committee
President & CEO, Leamington District Memorial Hospital
SWO Regional Partnership Leadership Forum
September 14, 2005
Integrated Supply Chain
Management (iSCM)
Definitions
“
Supply Chain Management”
Supply Chain Management refers to the full range of processes that manage the flow of goods & services, information and dollars between suppliers, customers and end-users, as well as the supporting infrastructure required to enable these processes.
“
Integrated” Supply Chain Management (iSCM)
iSCM refers to tight supply chain collaboration among multiple organizations, ideally with a single, focused entity responsible for managing the associated people, processes, information & infrastructure
“
Leading Practice
”A leading practice can be defined as “any application of process, technology or
people practices that allows organizations in a specific business context to function as efficiently and effectively as possible
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OntarioBuys Integrated Supply Chain
Management Framework
Plan
Source &
Move
Pay
Procure
processes to business physical financial
manage demand processes processes, processes,
for products & including from the
including
services contracting, supplier to the payment,
ordering & expediting end-user rebates
OntarioBuys
3
e-Supply Chain Project
4
Erie St. Clair LHIN
Integrated Supply Chain Vision
The vision for iSCM is centered on:
To transform current practices using technology as the enabler
To view the processes & activities within supply chain as an
integrated process
To focus on meeting the needs of our internal stakeholders
through a commitment to customer service
To reduce the total cost of supply chain (product & process) to
the system
To build the partnership on a foundation of trust & a recognition
of our individual contributions
The Erie St. Clair LHIN’S vision for iSCM spans the full
continuum of services from procurement to payment and is
depicted graphically below.
Plan
Source
Manage
Deliver
Demand Planning OR Supply Distribute to Designated areas Select Supplier Pay Supplier Process Order E-Commerce Receive Goods & Services Warehouse Sterile Process
Supplier Management
Product Management
Inventory Management
Warehouse Management
Policies & Procedures Performance Measurement
Legend Operations Management Product Standardization/Vendor Consolidation
Plan
Source
Manage
Deliver
Plan
Source
Manage
Deliver
Demand Planning OR Supply Distribute to Designated areas Select Supplier Pay Supplier Process Order E-Commerce Receive Goods & Services Warehouse Sterile Process
Supplier Management
Product Management
Inventory Management
Warehouse Management
Policies & Procedures Performance Measurement
Legend Operations Management Product Standardization/Vendor Consolidation
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Suppliers &
Distributors
Hospital
n
PurchaserShared Services
p
Banks
r
SSC Bankq q
Manager Information Management & Analysis StrategicProcurement Customer Service
s
s
Supplier Bank
o
o
Conceptual Future Model:
Integrated Supply Chain Model
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Erie St. Clair LHIN iSCM
Current State - Future State
Integrated Supply Chain Model
•Plan – regional approach to determine product requirements
•Contract consolidation with standardization a key consideration
•Source – Implement vendor certification and performance measurement program •Leverage aggregate purchasing power •Implementation of system enablers for purchasing and accounts payable for seamless transactions
•E links to vendors for contract management and product updates.
•Manage – Implement system tools for warehouse which supports stockless inventory system with JIT delivery to user departments
•Deliver - Implement reporting tools that provide “real time” consumption data as to provide improved service to ends users •Standardization - Broader approach to standardization, develop regional product standardization framework
•One regional group purchasing organization •Practice standardization for product use a key considered across region for long-term savings
Current Environment
•Each individual hospital or hospital group, are purchasing, storing, and distributing “like” products •Variable pricing across region •Limited use of eCommerce •Manually intensive payment process •Limited reporting capabilities for analysis
•Manual contract management •Standardization occurring for individual purchasing groups, but not regionally
•Traditional inventory management methodology, inability to react quickly to demand variations
Future Potential: Optimizing iSCM
•Ability to adopt new technologies as developed i.e. supplier bar codes for tracking purposes •Payment on receipt of product •Expansion of vendor managed activities based on technology advancements and built in controls
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Areas of Opportunity
Transforming existing transactional practices into automated
processes to provide increased capacity for customer service
and strategic investments, e.g. full cycle EDI, customized
vendor catalogues, real time transactions, and full deployment
of electronic requisitioning
Integrated product evaluation & selection
Improving the efficiency and management capabilities related to
inventory management and goods distribution practices to
increase patient and staff safety in the handling and use of
products.
Transitioning vendor relationships from short-term contracts to
longer term relationships.
Creating a new environment for staff to grow and develop in a
centre of excellence for supply chain services.
Erie St. Clair LHIN iSCM
$4.5 - $6.5 million
$2.0 - $4.0 million
$2.5 million
Total
$1.0 - $2.0 million
$1.0 million
Operating Costs
$1.0 - $2.0 million
$1.5 million
Product Pricing &
Standardization
Total Savings
2005-2007
Projected-To be determined through Implementation Analysis2000-2004
Completed to
Date
Annual Savings
Estimate
Erie St. Clair LHIN iSCM
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Benefits
Patients: Improve patient safety practices through standardized product usage,
adoption of leading practice, infection control practices, etc.
Clinicians: Improved process for product acquisition and goods distribution will
reduce clinician time spent on non-clinical workload. Product and practice
standardization could eventually be expanded to other healthcare sectors in the
region i.e. CCAC, Emergency Services, Canadian Mental Health, Long term
care organizations and eventually the municipalities.
Providers’ Staff: Improved process for product acquisition and goods
distribution will allow staff to focus on their work rather than the business of
requisitioning and monitoring of supplies.
Supply Chain Staff: The integrated model will provide a centre of excellence
for supply chain practitioners to grow in their individual competencies and will
provide a more robust career
Local Community: A redirection of resources from the total cost of goods
(pricing and process costs) will provide for more resources to be focused on the
provision of patient care,