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DEVELOPING STANDARDS FOR SUPPLY CHAIN MANAGEMENT PRODUCT INFORMATION . Hugh Blythe, CMRPAssistant Manager, Surgical ServicesCarolinas Medical CenterCharlotte, North Carolina David Boyce, CMRPSenior Director, OperationsMaterials Resource ManagementCarolinas HealthCare System,Charlotte, North
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2. II.5 DEVELOPING STANDARDS FOR SUPPLY CHAIN MANAGEMENT PRODUCT INFORMATION - Achieving the Goal -Establishing A Product Utility For the Healthcare Industry
3. DEVELOPING STANDARDS FOR SUPPLY CHAIN MANAGEMENT PRODUCT INFORMATION Hugh Blythe, CMRP
Assistant Manager, Surgical Services
Carolinas Medical Center
Charlotte, North Carolina
David Boyce, CMRP
Senior Director, Operations
Materials Resource Management
Carolinas HealthCare System,
Charlotte, North Carolina
Richard A. Perrin, MBA, HFMA
President,
AdvanTech, Inc.
Annapolis, Maryland
Chairperson, HIMSS Supply Chain Management SIG
4. Agenda Key Trends
Business Challenges/Pain Points
Understanding the Problem
The Answer ~ Our Process, Findings & Solution
Key Capabilities & Business Value
ROI/ Business Case
Customer Success Story ~ Results To Date
Next Steps
5. Objectives Understanding of current status of Product Data Utility (PDU) standardization efforts for the healthcare industry
Understanding the business challenges, costs and benefits to provider organzations from use of PDU standards
Understanding of the issues/steps/methods necessary to garner benefits from use of PDU standards for provider organizations (hospitals)
Provide insights into impacts & benefits on e-commerce activities from use of PDU standards
6. PDU Organizing Committee Product Data Utility Organizing Committee
Vision, Mission, Objectives - Develop Standards for Sharing Supply Chain Management Product Information
Organizing Committee Structure
Accomplishments To Date
PDU Committee
Hospitals/IDNs
Professional Associations (AHRMM/HIMSS/HIDA/HDMA)
Manufacturers & Distributors
Group Purchasing Organizations
E-Commerce Exchanges (GHX/NEOF/Others)
E-Commerce Content Providers/Portals (e.g., HCEC/GHX/GS1)
7. Key Trends Healthcare Specific Data Requirements
Data Synchronization Fragmented Systems
Shrinking Reimbursement & Declining Provider Margins
Accurate Information Required for Informed Business Decisions
Linkages of Clinical & Financial Information Systems
Scheduling, Patient Safety & Quality of Care
EHR, CPOE, eMar & Bedside Care Activities
Need for Increased Efficiency Driving Process Automation & E-commerce
Supply Chain/Resource Management
Asset Visibility Both In-Transit & Inventories
Customer Support Clinical Value Analysis & Reduced Inventories
Healthcare specific data requirements different from industry in general.
Focus on key industry trends
Healthcare specific data requirements different from industry in general.
Focus on key industry trends
8. Business Challenges/Pain Points Develop Standards for Data Elements Including
Manufacturer
Packaging
Units of Measure
Quantities
Enable Trade (BusiNess) Partners to Accurately Price (Contract), Buy & Sell Products
9. Business Pairs Manufacturer - Distributor
Manufacturer GPO
GPO Provider
Distributor Provider
Manufacturer Provider
Distributor GPO
10. Business Challenges/Pain PointsGPO - Providers Inaccurate Data in Provider Data Master/Product Item Information
New GPO Contract Activation Delays for Data Loading/Synchronization
Contract/Purchasing Pricing Discrepancies
Inaccurate Purchasing & Customer Volume Reports Synchronization between buyer and seller product data reduces order errors
70 -- 80% of all product transaction errors directly relate to inaccurate product information (Healthcare e-Business Collaborative)
One major supplier notes that 10 90% of purchase orders received from hospitals require corrections
Time delays activating new contracts - Source Update allows member hospitals to preview, filter and schedule contract updates from Premiers eSource
Pricing discrepancies Hospitals are notified of pricing discrepancies between PO, POA, invoice and contracted price held in Source Update
Inaccurate Purchasing Volume Reports More accurate product data provides greater visibility into volume purchasing
Synchronization between buyer and seller product data reduces order errors
70 -- 80% of all product transaction errors directly relate to inaccurate product information (Healthcare e-Business Collaborative)
One major supplier notes that 10 90% of purchase orders received from hospitals require corrections
Time delays activating new contracts - Source Update allows member hospitals to preview, filter and schedule contract updates from Premiers eSource
Pricing discrepancies Hospitals are notified of pricing discrepancies between PO, POA, invoice and contracted price held in Source Update
Inaccurate Purchasing Volume Reports More accurate product data provides greater visibility into volume purchasing
11. Business Challenges/Pain PointsGPO - Providers Data Synchronization for e-Commerce
Healthcare Providers Need to Have Clean Product Data (Item Master Information) to Minimize Purchasing Errors Impact of inaccurate product data - Synchronization between buyer and seller product data reduces order errors
70 -- 80% of all product transaction errors directly relate to inaccurate product information (Healthcare e-Business Collaborative)
One major supplier notes that 10 90% of purchase orders received from hospitals require corrections
Time delays activating new contracts - Source Update allows member hospitals to preview, filter and schedule contract updates from Premiers eSource
Pricing discrepancies Hospitals are notified of pricing discrepancies between PO, POA, invoice and contracted price held in Source Update
Inaccurate Purchasing Volume Reports More accurate product data provides greater visibility into volume purchasing
Impact of inaccurate product data - Synchronization between buyer and seller product data reduces order errors
70 -- 80% of all product transaction errors directly relate to inaccurate product information (Healthcare e-Business Collaborative)
One major supplier notes that 10 90% of purchase orders received from hospitals require corrections
Time delays activating new contracts - Source Update allows member hospitals to preview, filter and schedule contract updates from Premiers eSource
Pricing discrepancies Hospitals are notified of pricing discrepancies between PO, POA, invoice and contracted price held in Source Update
Inaccurate Purchasing Volume Reports More accurate product data provides greater visibility into volume purchasing
12. Business Challenges/Pain PointsGPO - Providers National & Local Relationships
Provider Contracting Issues
Contracted Direct Sales
Contracted Distributor Sales
Issues Encountered Costs
Contract Implementation Impacts
Process to Resolve Benefits
Status of This Today
13. Business Challenges/Pain PointsDistributors - Providers Providers Change to Different Prime Distributor
Conversion Program Issues & Challenges
Pain Points Different Structure 10 Digit to Alphanumeric
Contracted Direct Sales
Not Contracted Direct Sales
Issues encountered Costs
Process to resolve Benefits
Lessons Learned
Status Today
14. Business Challenges/Pain Points Manufacturers to Providers Contracted Direct Sales
Not Contracted Direct Sales
Companies Changed Names Need to Update Multiple Databases
Product Nomenclature Changes
Some Items Through Distributor & Some Items Direct Issues With Data Routing
Packaging Issues CS v. BX v. EZ
15. Carolinas HealthCare System
16. The Largest Healthcare System in the Carolinas, & Fourth Largest Public System in the Nation
Ranks Fifth on Verispans Top 100 Highly Integrated Healthcare Network List
Leases & Manages 15 Hospitals & Other Healthcare Related Operations
More Than 4,300 Licensed Beds & Approximately 25,300 Employees Carolinas HealthCare Systems
17. Carolinas HealthCare Systems Carolinas Shared Services, A Regional Committed Volume GPO Affiliated With Novation
Provides Contracting Services to 16 Participants
Different MMIS Systems
One Contract Price for All Participants
Volume Reporting for RFP
Contract Compliance Insuring Commitment
Rebating & Fee Reporting
18. Carolinas HealthCare Systems Charlotte Operations 4 acute, 1 specialty, 2 long term care facilities
Central Procurement
PO Lines/month
Active SKU
EDI %
Invoice Errors
Central JIT Distribution
Stocked SKU
Inventory$$ & Turns
Fill Rate
Cost Plus Transition & impact to local operations
Add EDI %ages
PO Lines metrics
Operational component central procurement central distributionTransition & impact to local operations
Add EDI %ages
PO Lines metrics
Operational component central procurement central distribution
19. Data Issues at CHS Actionable
Volume & Compliance
Classification
Descriptive
Spending
Accurate
Electronic Procurement Efficiency
PUOM
Price to the Third
Catalog to Dash or Not to Dash Need actionable data for bidding and compliance
Accuracy for EDI transactions
Need actionable data for bidding and compliance
Accuracy for EDI transactions
20. Data Issues at CHS - Costs Poor Historical Spend Picture = Less Than Best Price
Unproven Contract Commitment = Higher Price Contract Renewals
Inability to Prove Market Share = Loss of Tier Eligibility
Price Parity Among Participants = Overspending
Rework EDI
Rejected EDI Lines = Cancellation of PO
EDI 7 Times More Efficient Than Call in Until Mismatch
$50/PO to Correct Discrepancies
20% AP, Materials Time Is Involved With Rework
Loss of Prompt Pay Discounts
Poor historical spend picture less than accurate picture
Had to rely on the vendors information
Loss of tier pricing
Rework with EDI
Poor historical spend picture less than accurate picture
Had to rely on the vendors information
Loss of tier pricing
Rework with EDI
21. Solution Carolinas HealthCare Established 5 FTE Information Management Team
Central Item Master Control
Ad Hoc Reporting
Contract with Third Party for Data Cleansing
Establish Data Warehouse for Purchase History
22. Carolinas HealthCare Costs IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.
23. Carolinas HealthCare Benefits IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.
24. Understanding the Problem No Central Repository for Product Numbers & Product Description
No Standard Nomenclature For Trade Partners
Errors in Supply Chain Communications Waste Money
What about HIBCC, UCC, GL1, EPCGlobal, ANSI, UNSPSC, etc.?
What about HIBCC, UCC, GL1, EPCGlobal, ANSI, UNSPSC, etc.?
25. The Solution Establish Data Repository
Industry Collaboration & Representation
Funding
Source of Truth
26. ROI / Business Case Lower Connectivity Costs
300-bed Hospital Reports Saving More Than $100,000 in Costs to Connect to 43 Suppliers
Reduced Purchase Order Errors
Average 25% Fewer Purchase Order Errors
Average 50% Reduction in Discrepancies Between PO, Shipping Receipt and Invoices
Faster Processing Times
Average 5090% Reduction in Order Processing Time
Improved Productivity
One IDN Reported Tripling PO Volume With Less Than a 50% Increase in Buyer Staff
Electronic Invoices Reduce Need for Manual Re-keying
27. Customer Success Stories DoD
Owens & Minor
Becton Dickenson
Others
GPOs
Premier
VHA/Novation
Local GPOs & Self-Directed
Providers
28. Carolinas HealthCare Results To Date IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.IDN internal costs without the PDU. What CHS has spent to date to get to actionable data.
29. Benefits Achieve Benefits From Use of Universal Product Numbers.
Healthcare Industry Savings Potential From Using Standardized Product Data Is Estimated to Be Billions of Dollars Annually.
Benefits From Common Standards Usage Have Been Proven Previously in Other Industries.
Achieve Enhanced Error Free SCM Transaction Processing in Support of Healthcare Needs.
30. Next Steps Alternative Approaches
GS1 ~ GDSN
HCEC ~ PIM
GHX ~ AllSource +
Standards Organizations
ANSI/ISO ~ EDI & HL7
HIBCC ~ HIN & LIC
GS1 ~ GTIN & UNSPSC
31. Business Challenges/Pain PointsDistributors to Providers GLN Standards Use
GPO Membership Roster
Sales & Billing Issues
Contract Activation Notification
Performance Tracking
Accurate & Timely Reporting
32. Q & A - Discussion