A LEAN Approach to Supply Chain Integration & Project Management

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FACULTY

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Régine Villain, MPH | NYU Langone Health SystemVice President, Supply Chain

Ann Marie Ferguson, MPA | NYU Langone Health System Associate Director, Supply Chain

Kenneth Scher, CMRP | Nexera, Inc.Senior Manager, Consulting Services

Ritika Ghose | Nexera, Inc.Senior Consultant, Consulting Services

FACULTY DISCLOSURE

The faculty reported the following financial relationships or

relationships to products or devices they or their spouse/life

partner have with commercial interests related to the

content of this CE activity:

- Régine Villain, MPH – Nothing to Disclose

- Ann Marie Ferguson, MPA – Nothing to Disclose

- Kenneth Scher, CMRP – Nothing to Disclose

- Ritika Ghose – Nothing to Disclose

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Learning Objectives

Identify strategies to implement LEAN

approaches in order to reduce waste.

Analyze the benefits of a team-based

approach to supply chain integration.

Outline the methods to create LEAN

supplier networks.

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NYU Langone Health System

Founded in 1841

NYU School of Medicine + Four

Hospitals• Tisch Hospital

• Rusk Institute of Rehabilitation Medicine

• NYU Hospital for Joint Disease

• NYU Lutheran Medical Center

Over 150 Ambulatory Sites & 40

Practices

New Hospital Under Construction• Kimmel Pavilion

o 11 patient floors

o 374 single-bed rooms

New Affiliation in Progress • Winthrop University Hospital

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Nexera, Inc.

Leading performance and financial improvement consulting firm

with roots in strategic supply chain management

Partnered with over 120 healthcare organization to create

sustainable solutions for health system transformation

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Presentation Overview

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Integration Overview & Approach

Methodology & Project Management

Spend Merger

Operations Merger

Key Lessons

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INTEGRATION OVERVIEW & APPROACH

Nexera’s Supply Chain Operations Pie

Value Analysis

Contracting

Requisitioning

Purchasing

Receiving

Distribution

Inventory Management

Data

Management

& Technology

Infrastructure

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The Lean Approach

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Phase IVPhase I Phase II Phase III

Project Management and Communication

ImplementDesignAssessTrack &Improve

Project Management Structure

FIVE KEY AREAS

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Standardize business practices,

workflow/ consistency, update

policy & procedures

Transition main distributor,

inventory replenishment,

warehouse/ par locations

Align titles, roles, and

responsibilities

Improve analytics capabilities

combine spend & savings into

one reporting system

Systems & Technology

Process Warehouse & LogisticsPeople

Data Analytics & Reporting

Implementation of eProcurement

system = one ERP

Organizational Focus

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CostProcessPeople

Stakeholders &

Champions

Management,

Flexibility,

Adaptability

Technology

Improvement

Approach & Buy-In

Change

Management

End User

Education &

Training

Effective Practices

Process

Management

Policy & Procedure

Enhanced Flow &

Operations

Customer Service

One IMF

Streamline ERP

Price Parity

Optimize GPO

Penetration

Streamline

Align End-Users

Drive

Organizational

Savings

Reduce CostsRequisitioning

Purchasing

Inventory

Management &

Logistics

Analytics &

Reporting

Project Team: SYNERGY

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Executive Leadership

Steering Committee

Clinical

Project Managers

Project Management Leads

Data Management Leads

Corporate Services Inventory Management Value Analysis Legal

Complete On Track to Meet Target Will Not Meet TargetRisk of Not Meeting Target

Overall Status

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Example Status Report

NYU Lutheran Integration Status Report: April XX, 2017

Integration Team: Supply Chain Management

Integration Team Contacts Sign-OffSummary of Major

Accomplishments

Gaols and ScopeKey Milestones

(Achieved and Upcoming)

Target

DateStatus

Barriers & Areas for

Leadership InputSummary of Key Next Steps

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SPEND MERGER

Phase I: Assessment

Overall Matched Spend & Savings Analysis

Facility Matched Spend Savings Associated

NYU Langone Medical Center $27M $500K

NYU Lutheran $13M $1M

Grand Total $40M $1.5M

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# of Matched Unique Catalog #

with Unique UOM:

# of Matched Unique Catalog #:

2,500

1,500

Phase II: Implementation Design

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1. Identify matched items

2. Remove UOM duplication and identify any UOM inconsistencies

3. Quantify savings and spend figures

1. Review top categories with NYU team

2. Share the information with key stakeholders from both NYU and LMC

1. Establish work groups to review pricing of matched purchases

2. Review contracts and contact vendors

3. Quantify realized savings

Discuss next steps

Phase II: Implementation Design

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Identify key stakeholders from each facility for work groups

Review contract terms & commitments. Set up supplier timelines

Evaluate new integrated contracts & track savings

Further review matched purchases for additional savings opportunities

Phase III: Implementation

Category Annual Spend SavingsOrthopedic $20M + $350K +Spine $15M + $2.5M +Cardiac $15M + $250K +Vascular $2M + $100K +Grand Total $52M + $3.2M +

Non-Clinical Implementation

Clinical Implementation

Initiative Total Spend Evaluated

Total Savings

Furniture $15M + $500K +Office Supplies $10M + $350K +Translation & Interpretation $5M + $200K +Facilities - Security Personnel $1.5M + $40K +Grand Total $31.5M + $1M +

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Evaluate Service

Validate

Stakeholder Review

Implement

Phase IV: Tracking & Continuous Improvement

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VBM Taskforce

VBM – Surgical Committee

Orthopedics

Implementation Teams

Perioperative

Value Analysis

Interventional

Value Analysis

Medical/ Surgical

Value Analysis

Value Analysis

VBM – Clinical Oversight Group

Children s Services

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OPERATIONS MERGER

Phase I: Operations Assessment

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CostProcessPeople Technology

Technology

ERP transition

Data Management

IMF vs. IMF analysis

o Exact matches

o Conversion items

o Keep items

Inventory

Management

Perpetual Storeroom

Par Locations

Bulk LUM

Distributor

conversion

Requisition/

Replenishment

MMIS transition

Handhelds

Non-stock & special

orders

Logistics

Roles &

responsibilities

MMIS transition

Phase I: Operations Assessment

(Inventory Management)

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Current state metrics

Inventory turns

Value

Average daily usage

Max daily usage

Mean daily usage

Detailed PAR location analysis led to inventory right-sizing opportunity

Par location detailed analysis

Replenishment/ issue history

Purchase order history

Item conversions

Item adds/ replacements

Storage capacity

Replenishment cycles

Phase I: Operations Assessment

(Inventory Management)

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All location item levels finalized

Distributor conversion

Low unit of measure conversion

Validation

Implementation planning

Location by location par recommendations & stakeholder review

Previous analysis

Vendor/ manufacture lead times

Safety stock

Capacity

On-hand requirements

Detailed PAR location analysis led to inventory right-sizing opportunity

Phase II: System & Operations Design

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New main distributor

Item conversion

Low unit of measure program conversion

o Review updated par location info

• LUM UOM/QOE

Based on analysis:

o Exact match

o Conversions

o Keep

Cross walk identification

o MMIS item # switch

New MMIS par location upload

Item conversion

Approval process

Coordinate with transition teams

Contracting/ Value Analysis

Item Master File

Phase II: System & Operations Design

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New ERP

System and

operational

education

Inventory

Management

Coordination of all

conversion

components

Implementation

design

Final file approvalo System testing

Go-live readiness Bar code applications

Phase III: System Implementation

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Inventory

Tracking

Inventory Barcode

Labels

Phase IV: Continuous Process Improvement

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Ongoing

enhancement

Storeroom

inventory

reductionPar level review

Kimmel

Weighted bin system

Autonomous distribution

Perioperative supply chain inventory management

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KEY LESSONS

Lean Lessons

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Complete buy-in from both

entities is a prerequisite for

success

Full organization specific

current state assessment is

required

Organization collaboration &

change management is

essential

Continuous improvement must

be the mindset

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