WSHMMA CMRP Overview

1. WSHMMA CMRP Overview Chris Matala, CMRP Director, Supply Chain & Sterile Processing Island Hospital Dave Hinkle, FACHE, CMRP Director, Supply Chain Outreach and ValueSource Providence Health & Services

2. Your Presenters – Chris Matala • Credentials • BS, Central Washington University • MBA Prepared, St. Martin College • Certified Materials Resource Professional, Association for Healthcare Resource & Materials Management • WSHMMA Board Member • AHRMM Education Committee • Twenty Four years HealthCare Managment • Director, Supply Chain & Sterile Processing, Island Hospital • Recent Positions • Purchasing Manager Harrison Medical Center cmatala@islandhospital.org 360-299-1304

3. Your Presenters – David Hinkle • Credentials • BS, Missouri State University • MHA, Baylor University • MPA, Clark University • Mouse Ears, Disney University • Fellow, American College of Healthcare Executives • Certified Materials Resource Professional, Association for Healthcare Resource & Materials Management • Ten year presenter, AHRMM CMRP Training • Director, Supply Chain Outreach, Providence Health and Services • Manages relationships with Providence’s non-owned Supply Chain affiliates • Manages Providence’s internal Supply Chain consulting activities • Recent Positions • President, Pinnacle Consulting Services • Senior Director, VHA’s Consulting Services • Director, Operations Redesign, Johnson & Johnson/The McFaul & Lyons Group • Director, Support Services and Supply Chain, Hillcrest Baptist Medical Center, Waco, Texas David.Hinkle@providence.org 856-816-7150

4. CMRP Overview Session Disclaimer • Please be advised that this is only an overview of the Materials Management Review Guide and assumes the attendee has read and is familiar with the guide. • It should not be inferred that test items in the examination are selected from any single reference or set of references or that participation in this review session guarantees a passing score on the examination. • No portion of this presentation may be reproduced by an attendee without the expressed written permission of the presenter.” *Nothing is guaranteed in life. No such thing as a “free lunch”. But if you study, you should pass.

5. A Mark of Distinction CMRP status allows you to: • Have a premier credential based on a sound assessment to distinguish yourself in an increasingly competitive marketplace. • Enjoy the pride of recognition and knowing you are among the elite in the field of healthcare materials management. CMRP status sets you apart from your peers

6. American Hospital Association Certification Center The CMRP process is: • Governed by a Board of Directors • An independent body affiliated with the AHA • Certification Program Committee • Content experts • Test development • Scoring and analysis • Designed to test full scope competency of individuals involved in healthcare supply chain management

7. Eligibility - Concept In 2003, the CMRP eligibility requirements changed to include job challenges faced by supply chain professionals in both the hospital and healthcare industry related settings on a daily basis. The requirements are constantly reviewed and continue to blend experience and education. Participants should include experienced healthcare supply chain leaders and professionals. There is no membership requirement but the fee is significantly reduced if you are a member.

8. CMRP Eligibility • Baccalaureate degree plus three (3) years of associated healthcare resource and materials management* experience; or • Associate degree or equivalent plus five (5) years of associated healthcare resource and materials management* experience; or • High school diploma or equivalent plus seven (7) years of associated healthcare resource and materials management* experience. *Experience includes persons who are involved in the materials functions of healthcare facilities; or are active in the healthcare supply chain, including manufacturers, vendors, distributors, consultants, and employees of group purchasing organizations.

9. Steps for Administration • Application for examination processed • Eligibility confirmation sent to candidate • Confirmation notice received • Fees • Members - $275 (Periodically AHRMM awards CMRP scholarships to members.) • Non-members - $425 • Schedule appointment; reschedule once within 4 business days at no charge • Rescheduled within 90 days - $100 rescheduling fee • Reschedule after 90 days must resubmit application and pay a fee of $275/members or $425/nonmembers

10. Steps for Administration • Selected H&R Block computer centers or AHRMM National Meeting • Photo ID (2 forms of ID) • Computer-based • 2 hours • 110 questions (10 potential future use but don’t count) • Results immediately upon completion • Notice of successful completion • Letter of congratulations • Pin • Renewal packet • Employer notification letter • Your name on the CMRP website identifying you as a Supply Chain professional

11. Exam Content The AHRMM role delineation study identified real-world tasks that were grouped into categories and weighted to produce exam specifications. 1. Purchasing/Product Value Analysis • Inventory/Distribution Management • Information Systems • Finance • Strategic Planning/Leadership/Support Services This is how the examination is organized. However, like real-life, day to day problems don’t come batched together by category, the same is true with the examination. Earlier this year the exam content was changed.

12. Exam Questions Categorized Recall • The ability to recall or recognize specific information Application • The ability to comprehend, relate or apply knowledge to new or changing situations Analysis • The ability to analyze and synthesize information, determine solutions and/or to evaluate solutions

13. Test Items To ensure reliability and validity, test items are: • Written by experienced healthcare resource and materials managers; • Geared to test application of knowledge - not just recall of facts; and, • Reviewed to ensure clarity.

14. Notes on Terminology Important Notice: The various statements, terms, and definitions provided herein (and in the CMRP Examination Review Guide) are what the AHRMM CMRP Committee considers the most common use of these expressions. Should another use of these statements, terms and definitions be found in “industry”, it is recommended to pay close attention to how these items are used in this presentation and review guide. Note that the AHRMM “definition” will be the one used to process the examination.

15. Measurement Expertise To ensure the highest standards in testing, the AHA Certification Center engaged Applied Measurement Professionals, Inc. (AMP) to assist with: • Test development; • Test administration; and • Scoring, score reporting, and analysis.

16. Administration The CMRP Examis offered on computers at over 150 secure test centers throughout the U.S. Scores are private. Only the applicant receives the scores.

17. Administration • The examination application is contained inside the CMRP Handbook and Application and is available by downloading a copy from: • The AHA Certification Center, • www.aha.org then click on “Certification; or • Call Applied Measurement Professionals, Inc. (AMP) at 888-519-9901 • AHRMM’s Web site, www.ahrmm.org

18. Exam Provisions The Examination fee is: • $275 for any PMG or At-Large Member; or • $425 for a nonmember. Certification is valid for three years. (45 hours to recertify so start keeping track.) • Keep copies of training agendas to document attendance • You get “two times” the credit for programs you present • This is not a program to start a month before your renewal • If you fail to recertify, you must re-take the examination

19. Preparing for the Exam • AHRMM CMRP Candidate Handbook and Application (White Book, free) • http://www.aha.org/certifcenter/files/12CMRPhandbook.pdf • CMRP Examination Content Outline provides valuable information on the topics AHRMM deems important • AHRMM CMRP Study Guide, 5th edition (White Book, $75, members; $95, non-members) • CMRP preparation presentations • AHRMM, National Meetings • AHRMM Webinars • AHRMM Regional and State Chapters • Optional purchase of the “pre-test” from AHRMM • Optional purchase of this Webinar CD from AHRMM • Non-AHRMM study materials, such as flash cards (not endorsed) • Presenter’s study materials-free upon request • Develop internal study sessions (brown-bag-lunch) with your local peers or at your facility site-consider dividing up the various sections

20. Preparing for the Exam Examination Content • The following five sections provide a brief overview of the examination elements, as provided by AHRMM in the Candidate Handbook, CMRP Examination Content Outline. • Each section provides a list of those job elements and expertise a supply chain professional should possess in order to be successful in managing the hospital department. • A study suggestion would be to review the elements and then read the Materials Management Review Guide with a focus on those areas. • After you take the practice exam you can focus on the areas where you missed questions.

21. Procurement/Product Value Analysis 25 percent Requisitions Purchase Orders Purchasing Terms and Conditions Legal Aspects of Purchasing The Materials Management Toolbox Value Analysis CQO Process

22. Procurement • Direct the program to purchase materials, supplies, and capital equipment being mindful of: 1) specific patient needs (e.g., pediatric, geriatric, bariatric). 2) green initiatives (Leadership in Energy and Environmental Design (LEED)). • Participate in the organization’s purchasing process, including: • budgeting • contracting or sourcing 3) purchasing 4) receiving 5) inventorying • Participate in the organization’s capital purchasing process, including: 1) budgeting 2) evaluating/selecting 3) negotiating

23. Procurement • Implement advanced purchasing and procurement techniques for: 1) contract negotiation 2) competitive bidding 3) material use evaluation 4) comparative costing 5) product standardization • Evaluate purchase agreements for: 1) product quality consistent with standards for patient care 2) lowest possible total procurement cost 3) cost protection for extended periods of time 4) cost increase ceilings 5) consignment agreements with competitive prices 6) stockless purchasing agreements

24. Procurement • Develop systems and procedures that minimize the customer cost of ordering, storing, and using supplies, services, and equipment. • Ensure that timely order placement, expediting and supplier performance analysis take place and are continuously reviewed for effectiveness. • Direct audit activities, including the review of discrepancies, purchase orders, invoice price, payment terms, lost rebates, performance criteria, contract terms and conditions. • Lead focus groups for review and analysis of products and supplier services. • Prepare cost benefit analyses that support best product recommendations. • Negotiate competitive pricing, terms, and service levels. • Review contracts that optimize value to the organization considering standardization, utilization, and compliance.

25. Procurement • Develop supplier performance standards program to include the auditing and monitoring of: 1) product quality 2) pricing 3) discounts 4) rebates 5) service charges 6) invoicing 7) service levels 8) vendor competency • Develop supplier performance standards program to include the auditing and monitoring of The Joint Commission (TJC) standards for vendor tracking. • Direct and understand the components of the value analysis process.

26. Procurement • Evaluate purchasing reports (e.g., cost savings, price index, order processing time, purchase order error rates, work load volume, freight expenditures). • Assure that catalogs, price lists, inventory records, purchase order files, and product/supplier files are updated and current. • Participate and provide support to materials management standardization, consolidation and/or re-engineering processes. • Interact with physicians and clinicians to coordinate and integrate products/services consistent with cost elements and quality management programs into existing departmental services by assisting with: 1) program development 2) data collection and analysis 3) implementation 4) monitoring 5) measurement and evaluation

27. Procurement • Collect and analyze data relating to the therapeutic efficacy and cost effectiveness of products, equipment, and technology. • Coordinate service training for new products or equipment. • Provide consultation to departments requiring assistance in resource allocation. • Initiate and implement a product utilization review process. • Identify opportunities for reduction in resource consumption. • Provide process review and physician resource analysis of various clinical applications. • Adhere to a code of ethics to ensure corporate compliance.

28. Value Analysis and CQO • Value Analysis: • Multidisciplinary approach • Identifies potential alternatives to the product • Reviews the total delivered cost, not just acquisition cost • Patient focused, looks at quality and patient impact, not just price • Cost Quality Outcome: • Minimizing Cost, while maximizing Quality Patient Outcomes • A way to organize your efforts in meeting the challenges of the ACA and future trends

29. Inventory Distribution Management 20 percent Inventory Programs and Strategies Inventory Management Warehouse Design Distribution Methodologies Monitoring Performance

30. Inventory Distribution Management • Assure that the organization’s acquisition and distribution strategies and practices improve the overall healthcare system supply chain. • Develop strategies and procedures to integrate all resource functions of the overall healthcare system. • Monitor and determine causes of inventory variance, and implement corrective strategies. • Develop inventory reduction targets and process to achieve targets. • Determine effective space for storage (e.g., on-site vs. offsite). • Evaluate warehouse design factors related to: 1) flexibility (e.g., ease of expansion and contraction). 2) total, overall system rather than specific subsystems. 3) automation of materials management function. 4) back-up systems available.

31. Inventory Distribution Management • Manage the following inventory and distribution programs and strategies: 1) consignment strategy 2) just-in-time strategy 3) stockless strategy 4) consolidation strategy 5) Vendor Managed Inventory (VMI) 6) electronic point of use systems 7) Periodic Automatic Replenishment (PAR) 8) electronic requisitions 9) random requests and emergency requisitions 10) back-orders • Monitor work flow for returned goods, product recalls and conversions, and arrange for pickup and/or exchanges

32. Inventory Distribution Management • Determine effective receiving process (e.g., centralized, decentralized). • Oversee distribution processes and accountability (e.g., accurate reporting of customer activity, discrepancies between receipts and supplier invoices). • Determine an appropriate data management system (e.g., tracking of packing slips and purchase orders, set-up of filing systems, computer systems and receiving logs). • Develop a Performance Improvement (P1) mechanism for monitoring performance of the receiving process. • Resolve customer concerns by providing a central point of access, and serve as a liaison to customer departments and suppliers. • Determine appropriate internal and external material transport devices and systems to use ((e.g., carts, pneumatic tube systems, automated guided vehicles (AGV)). • Review and evaluate distribution system performance.

33. Inventory Distribution Management • Identify and calculate ratios for inventory management (e.g., inventory turn rates). • Understand implications of regulations and logistics pertinent to delivery and conveyance of freight to affiliated healthcare facilities (e.g., third party delivery, cross-docking, and courier services).

34. Information Systems and Data Management 15 percent Functional MMIS Requirements Assessing, Acquisition and Implementation Supply Chain System Standards GS1, GLN, GTIN Records and Data Storage HIPPA

35. Information Systems and Data Management • Define functional requirements, specifications and interfaces for an automated materials management system. • Assess existing Material Management Information System (MMIS) capabilities and gap analysis. • Direct acquisition and implementation of an automated, system-wide materials management information system. (RFP-RFI Process) • Promote development of supply chain system standards. • Apply supply chain data standards to organization MMIS (e.g., GLN, and GTIN). • Employ ANSI X.12 EDI transaction sets. • Establish guidelines and procedures in conjunction with MIS or external users for participation in the materials management system. • Analyze and present data and analysis to task forces, departmental personnel, administration, and physicians.

36. Information Systems and Data Management • Collaborate with Information Technology and Health Information Management to facilitate records management storage, archival and retrieval including Health Insurance Portability and • Accountability Act (HIPAA) compliance. • Investigate software and hardware technologies integrating medical equipment data and the patient record (e.g., safety infusion pumps).

37. Finance 20 percent Financial Terminology (GAAP) Financial Report Interpretation Expense Management and Savings Initiatives Regulatory Standards

38. Finance • Review capital requests for compliance with standardization efforts and contract requirements. • Ensure that the materials management system has comprehensive pricing information for instruments, supplies, and equipment for budgetary planning. • Review and analyze supply expense and utilization trends to support both clinical and financial goals, and recommend appropriate budgetary adjustment. • Prepare annual objective and budgetary recommendations including: 1) analysis of budgetary data. 2) coordination of departmental expenditures. • Establish a purchasing and financial document retention and filing system in accordance with regulatory requirements. • Manage non-labor budgetary expenses.

39. Finance • Communicate with Accounts Payable to ensure the following best practices: 1) Generally Accepted Accounting Principles (GAAP) adherence 2) invoice reconciliation 3) timely application of rebates and credits • Demonstrate knowledge of the impact that reimbursements have on the revenue cycle (e.g., capitation, diagnosis-related groups (DRG’s), CMS, private payers, charity). • Manage cost-saving programs, including: 1) equipment maintenance 2) capital equipment selection 3) technology assessment 4) consumable product evaluation 5) procurement, inventory management, utilization, and selection of products and services

40. Finance • Understand the relationship to Supply Chain and apply standards from: 1) Robinson-Patman Act 2) Uniform Commercial Code 3) Safe Harbor Regulations 4) Sarbanes-Oxley Act

41. Strategic Planning, Leadership and Compliance 20 percent Sterile Processing Support Department Management Customer Service Performance Improvement and Benchmarking Safety and Emergency Preparedness Legal and Accreditation Standards

42. Strategic Planning, Leadership and Compliance • Oversee tasks in cleaning and preventive maintenance to ensure a high level of sanitation and infection control. • Manage hazardous waste disposal policies and procedures in accordance with regulatory requirements. • Demonstrate knowledge of universal precaution guidelines. • Integrate data findings of departmental performance into operational and strategic planning. • Incorporate key principles of performance improvement in daily operation (e.g., customer driven, key player involvement, continuous improvement). • Participate in Performance Improvement (P1) efforts (e.g., benchmarking, analysis of process flow, operational needs assessment). • Participate in Performance Improvement and Environment of Care Committees, Corporate Compliance, space planning and construction programs.

43. Strategic Planning, Leadership and Compliance • Develop position descriptions and employee responsibilities. • Develop department goals and objectives in concert with the organization’s mission and strategic plan. • Manage staffing requirements and human resources issues (e.g., patient/customer focus, union compliance, staff training and development). • Develop customer satisfaction plans, communication links, and measurement tools. • Analyze market conditions and statistical data and interview suppliers and other sources to assist in the development of business plans and/or creation of new business ventures. • Train employees regarding the procedures for product recall. • Participate with purchasing/materials management organizations, including GPO affiliations and local, state, and national purchasing/materials/sterile processing organizations (e.g., central sterile supply organizations).

44. Strategic Planning, Leadership and Compliance • Ensure compliance with legal, regulatory, guidance documents, and accreditation standards or codes to include: 1) Environmental Protection Agency (EPA) 2) Department of Transportation (DOT) 3) Hazard Communication Standard (HCS) including Material Safety Data Sheet (MSDS) 4) Association for the Advancement of Medical Instrumentation (AAMI) 5) The Joint Commission (TJC) 6) Health Insurance Portability and Accountability Act (HIPAA) 7) Americans with Disabilities Act (ADA) 8) National Fire Protection Association (NFPA) 9) Occupational Safety and Health Administration (OSHA) 10) Centers for Disease Control and Prevention (CDC) 11) Centers for Medicare & Medicaid Services (CMS) 12) National Incident Management System (NIMS) 13) Hospital Emergency Incident Command Systems (HEICS)

45. Strategic Planning, Leadership and Compliance • Participate in supplier diversity procurement programs (e.g., Minority Business Enterprises (MBE) initiatives, women-owned businesses, small businesses). • Ensure code compliance through inspections of specific areas (e.g., medical gasses). • Comply with waste stream requirements including compliance with management of hazardous waste. • Recognize the importance of MSDS and Employee Right to Know. • Investigate vendor credentialing (e.g., OIG). • Participate in emergency drills and training. • Describe evacuation plans for the department/building. • Describe primary components of the Emergency Preparedness Manual. • Coordinate emergency management with other healthcare facilities, suppliers and community partners

46. Strategic Planning, Leadership and Compliance • Oversee the department’s safety and emergency preparedness programs: 1) mass casualty or disaster response 2) hazardous material and waste 3) life/fire safety 4) medical equipment 5) safety 6) security A. Develop business continuity plans in case of supply chain disruption. B. Evaluate general disaster drills and security.

47. Supply ChainDefinitions

48. Definitions • ABC, Activity based costing.  Usually refers to costing method that breaks down overhead costs into specific activities (cost drivers) in order to more accurately distribute the costs in product costing. Has also been applied to customer and vendor management. • ABC stratification. Method used to categorize inventory into groups based upon certain activity characteristics. Examples of ABC stratifications would include ABC by velocity (times sold), ABC by sales dollars, ABC by quantity sold / consumed, ABC by average inventory investment, ABC by margin. ABC stratifications are used to develop inventory-planning policies, set count frequencies for cycle counting, slot inventory for optimized order picking, and other inventory management activities. • Allocations. Allocations in inventory management refer to actual demand created by sales orders or work orders against a specific item.  The terminology and the actual processing that controls allocations will vary from one software system to another. • Standard allocation is an aggregate quantity of demand against a specific item in a specific facility; I have heard standard allocations referred to as normal allocations, soft allocations, soft commitments, and regular allocations. Standard allocations do not specify that specific units will go to specific orders.  • Firm allocation is an allocation against specific units within a facility, such as an allocation against a specific location, lot, or serial number.  Firm allocations are also referred to as specific allocations, frozen allocations, hard allocations, hard commitments, holds, reserved inventory.  Standard allocations simply show that there is demand while firm allocations reserve or hold the inventory for the specific order designated.

49. Definitions • ASN, Advanced shipment notification (EDI 856). Advanced shipment notifications are used to notify a customer of a shipment. ASNs will often include PO numbers, SKU numbers, lot numbers, quantity, pallet or container number, and carton number. ASNs may be paper-based, however, electronic notification is preferred. Advanced shipment notification systems are usually combined with bar-coded compliance labeling which allows the customer to receive the shipment into inventory through the use of bar-code scanners and automated data collection systems. • Auto discrimination.  The functionality of a bar-code reader to recognize the bar-code symbol being scanned, thus allowing a reader to read several different symbols consecutively.  • Batch picking.  Order picking method where orders are grouped into small batches, an order picker will pick all orders within the batch in one pass. Batch picking is usually associated with pickers with multi-tiered picking carts moving up and down aisles picking batches of usually 4 to 12 orders, however, batch picking is also very common when working with automated material handling equipment such as carousels. See also Zone picking, Wave picking.  • Blind counts. Describes method used in cycle counting and physical inventories where you provide your counters with item number and location but no quantity information.  • BOM, Bill of material.  Lists materials (components or ingredients) required to produce an item.  Multilevel BOMs also show subassemblies and their components.  Other information such as scrap factors may also be included in the BOM for use in materials planning and costing. • BULK. Term usually thought of as describing inventory arriving or being produced in the manufacturers standard unit of sale, usually full-case quantities.

50. Definitions • Carrying cost. This is the cost associated with holding inventory. This includes the cost to finance the inventory purchase as well as the general inventory shrinkage (e.g., pilferage, outdating and damage to product.) • Compliance labels.  Standardized label formats used by trading partners.  Compliance labels are used as shipping labels, container/pallet labels, carton labels, or piece labels, and usually contain bar codes.  Many bar-code labeling software products now have the more common compliance label standards set up as templates.  • Consignment inventory. Inventory that is in the possession of the customer, but is still owned by the supplier. Consignment inventory is used as a marketing tool to make it easier for a customer to stock a specific supplier's inventory. The customer pays for the inventory only after it is resold or consumed. • Contract warehouse.  A contract warehouse is a business that handles shipping, receiving, and storage of products on a contract basis.  Contract warehouses will generally require a client to commit to a specific period of time (generally in years) for the services.  Contracts may or may not require clients to purchase or subsidize storage and material-handling equipment.  Fees for contract warehouses may be transaction and storage based, fixed, cost-plus, or any combination.  Also see Public Warehouse and 3PL. • COGS, Cost of goods sold.  Accounting term used to describe the total value (cost) of products sold during a specific time period.  Since inventory is an asset, it is not expensed when it is purchased or produced. It instead goes into an asset account (usually called Inventory).  When product is sold, the value of the product (the cost, not the sell price) is moved from the asset account to an expense account called cost of goods sold or COGS.  COGS appear on the profit-and-loss statement and are also used for calculating inventory turns.