Better supply chain data can save you several hundred thousand dollars


FOCUS: Operating Room Supply Chain

Creating better supply chain data can save you several hundred thousand dollars: New OHA guide shows how.

This is the third installment of a three-part series examining various aspects of OR supply chain improvement projects, based on the Ontario Hospital Association’s guidebook, Optimizing Your Perioperative Supply Chain: A Guide to Improvement Projects.


Some OR supply chains are more efficient than others.

“On a cost-per-case basis, we were one of the most expensive hospitals in the province in November of 2006,” offers OR manager for York Central Hospital Pam Richards. But that was before she and her colleagues undertook an OR supply chain improvement project.

Now that the project is complete, the team reduced costs overall by several hundred thousand dollars and identified areas for further savings.

Its project work, and in particular its work optimizing data in the item master files  –the database that catalogues the product information hospital employees need to manage frequently purchased goods and services   provided a solid foundation for continued improvements.

As one of the 14 pilot project hospitals participating in the operating room supply chain program, optimizing data was just one of a number of improvements York Central Hospital completed.

By creating better data, the team can easily track items, and this has contributed significantly to controlling product procurement costs.
“If a surgeon requests a new item, we can look at inventory and say: ‘There are 12 that are similar and in stock. Once they are used, we will order the new one.’ Prior to that, the new item was just ordered and the 12 in stock would expire,” explains Richards.

Why is data optimization important?
Without a firm foundation of quality data, hospitals can have difficulty performing basic data transactions and generating the reports required for tactical and strategic decision making. Also, business processes can become less efficient and more labour intensive.

Having quality data is essential for the efficient day-to-day operation of the supply chain. Good data helps to plan, implement, and measure supply chain improvements. It also supports clinical practices, ultimately enhancing patient safety and reducing medical errors.

Where do you start?
Data optimization projects are complex undertakings that require current state assessments, plan development, implementation strategies as well as ongoing maintenance.

Most begin with a detailed review of a system’s structure to ensure the optimized data is created using the correct number of characters and the elements are broken down appropriately.

The OHA’s new guidebook Optimizing your Perioperative Supply Chain: A Guide to Improvement Projects, which is available on the association’s web site as a free download, offers a more detailed explanation of this undertaking.

Compiled by subject matter experts and informed by the work of project hospitals such as York Central, the guidebook examines challenges and offers solutions based on actual implementation experiences.

For example, one challenging aspect of a conducting a data project is changing the labels and item names in the item master file, a file that is continually in use.

How do you change labels that are in use?
Here are a few steps York Central Hospital undertook to help with the transition:
1.    Start with talking. For York Central, its teams worked with the shared service organization to understand how inventory items would be ordered and labeled and to make sure the new way of doing things would interface well with other existing systems.
2.    Use descriptors. As anticipated, the new nomenclature proved to be an entirely new lexicon for clinical staff, says OR manager Pam Richards. “But it didn’t make sense to redefine the procurement people’s world just to meet our needs,” she adds, so they decided to include a descriptor field in the scheduling system that generates the procedure cards to help clinicians recognize the item.
3.    Focus on educating key users. York Central Hospital decided to focus its efforts on educating the surgery program’s five perioperative resource nurses who needed to be most familiar with item numbers and information. They started by identifying and setting aside all the items that were easily recognized. Then they built a list of problematic item nomenclature for which the team created nurse-friendly terms in the scheduling system.
4.    Use tandem labeling. In the medical device reprocessing department (MDR), change was a little more immediate. The team had to use all new labels with new item master information. To soften the learning curve, the department functioned using both the old and new labels on every item. The old labels were removed after three months when MDR felt the new system was firmly established and it was safe to do so from a patient safety perspective.
5.    Encourage learning. MDR also stressed to its staff the importance of individual responsibility in learning to work with the new item information, first explaining why this change was happening and how it would improve functioning and then later by providing consistent follow-up.

“Prior to doing data optimization some pick lists didn’t even have item numbers on them. There was so much ‘tribal’ knowledge and historical remembering that picking was almost like magic, with no process,” recalls Richards.
Now, she says, MDR staff send product to the OR with confidence, and clinicians receive the right items in the right amount.

Improving your data systems is one of the four foundational projects discussed in the OHA guidebook Optimizing your Perioperative Supply Chain.
To learn more and to download a free copy of the guidebook, visit and select ‘Supply Chain Strategies and Initiatives’ from the ‘Services’ tab.