Inventory Management

The University of Wisconsin Hospital and Clinics Tames a Large and Varied Inventory with the Help of a Real-time, Online System

Melissa Post, Interventional Radiology Manager, Department of Radiology at UW Health, University of Wisconsin Hospital and Clinics, Madison, Wisconsin
Melissa Post, Interventional Radiology Manager, Department of Radiology at UW Health, University of Wisconsin Hospital and Clinics, Madison, Wisconsin
In February of 2006, Ms. Post’s department implemented Owens & Minor’s Clinical Supply Solutions (CSS), an inventory, order, contract, utilization management and revenue enhancement service enabled by a proprietary web-based technology platform. The interventional radiology department at University of Wisconsin Hospital and Clinics not only saved money and time, but unexpectedly found physician-technologist relationships strengthened. What was the state of your inventory that caused you to consider implementing something new? The state was one of concern. I have been in the interventional radiology (IR) division for 14 years, as a technologist and now as a manager. As a technologist, it was always frustrating to go to the cupboard (kind of like Old Mother Hubbard) and find that the cupboard was bare. The shelf didn’t have the product you needed; the right size stent, tube or wire. It was awful and the last thing you wanted to do was go back into the procedure room where the physician was waiting for you and say “I can’t find it” or “we don’t have any more — what should we use instead?” Once I moved into management, it was just as painful. Physicians came to my office after struggling through a procedure because they were without the tools that were needed, and they wanted to understand why their ability to treat patients was being limited by supply issues. The answer was usually something simple, such as the item was not ordered. When I started in this position at the University of Wisconsin (UW) Hospital and Clinics, the first thing I noticed was there were so many products on the shelf that no one knew what we had, let alone where these products were. The entire staff was responsible for ordering products, which really meant no one was responsible. When the order was placed, whoever ordering it simply made sure we had more than was needed, since they were on the receiving end of the physicians’ displeasure when the item was not available. As a result, we were significantly overstocked. In addition, since we were so overstocked, the purchased products were always expiring on the shelf. We not only didn’t manage our ordering, but we didn’t manage the products once they were on the shelf. Over any six-month period, we would throw away $60,000 to $80,000 worth of expired products. That, of course, was totally unacceptable. We needed an inventory management system, if for no other reason than the sheer amount and varieties of products in use in our busy interventional radiology lab. While figuring out how important this endeavor was, I analyzed the entire cost structure of the IR department. The single largest expense in our department was not salary and benefits, but the supplies we used. Our supplies made up 80% of our expenses! That was huge. We needed to do something immediately to stop losses and control expenses. Implementing a home-grown manual system which involved the use of an Excel spreadsheet just to keep track of what we had on the shelves was helpful. We had to guess at what the appropriate par levels should be, since we did not have any utilization information. This caused us to have too much of one thing and not enough of another, but at least we knew what we had. Besides tracking what is on the shelf, however, we found this type of manual system did not assist with the continual updating of new products or the improvements that were made to the existing products. For example, it is not uncommon for us to have a particular line of coils on the shelf and find out the company manufactured an improved version of that product. Or the competitor’s product is updated and needs to be swapped out, and then the physicians hear of a brand new product that is supposedly better than the two that are currently on our shelf, so we need that product, too. Needless to say, we end up with a constant changing of preferences; product rotates through the lab at a pretty fast rate, but what do you do with the old product? Just let it sit? Throw it away? Rightly so, the doctors want to use the best available technology, but at whose expense? Our manual system was better than no system, but like any system, it is only reliable as long as it was updated, which took a long time to do. Unfortunately, updating required resources; resources we did not have. Our lead technologists (our highest paid technologists) were spending their entire time handling inventory. Their skill is better utilized beside our physicians and in front of our patients, not in the storage racks. We all knew there had to be a better way. By this point, I had a better understanding of what inventory management systems would be beneficial in our lab — one that was designed especially for high-volume labs like the UW IR division. We chose Clinical Supply Solutions (CSS, a service of Owens & Minor, Mechanicsville, VA) for many reasons. It is actually quite hard to rank which reason weighed the most. One excellent feature of the service is that it is web-based. It does not matter what computer you are using. As long as you have internet access, you have the ability to get into CSS and follow what is happening in your supply chain. Another feature we truly appreciate is that the system is always up-to-date. You can request a report and as soon as you hit update, you have the report with real-time information. With other systems we used in the past, I’d have to request that a particular report be run, and by the time I got the report back, perhaps a week later, I’d be trying to recall why I wanted it in the first place — and then trying to figure what had changed since I made the request. It is nice to have up-to-the-minute accuracy so we can adjust inventory immediately if necessary. In addition, CSS uses the bar codes that are on the products from the manufacturing companies, so you don’t have to apply another sticker to the product. Any catalog number can be simply typed in, but the bar code is very handy. All the technologists find it convenient when using it in the procedure room. CSS is implemented with a complete database of products. We didn’t have to build the database of products ourselves. It is already there and always updated with the latest product releases. Every product we use is in the database, all the time. You mentioned before that virtually all your staff were responsible for inventory management, particularly your lead technologists. How has that changed? Now we have one person in charge of the inventory management system. His official title is a tech assistant, but he actually came from Central Services/Supply. He’s a stock person by background and having him in the department frees up very valuable technologist time. He is responsible for receiving the products in, stocking the shelves and ordering new products every day. Now technologists can focus on patient care, and I can refocus much of my time on my other managerial duties. Do you store supplies in one central location? Yes. That was another big plus for CSS. Before CSS, every procedure room had exactly the same stocking scheme. Every room had the same stent sizes, the same balloon sizes, etc. Our overall stock was not based our actual utilization of products or procedures but based on convenience and the fear of not having something on hand when it was needed. CSS allowed us to pull everything out of the rooms and change our levels to a par determined by actual utilization patterns. We felt comfortable knowing that the reports in CSS were so accurate that we didn’t need to rely on multiple safety stock locations. Today, if we do one procedure requiring a stent of a particular size, we know we have it on the one centrally located shelf. When we know a patient is coming into that room, we bring the necessary supplies over. As a result of the new system, we were able to immediately decrease our inventory by 25%. It’s true that the new system was an adjustment for everyone. Our technologists now have to think ahead when deciding what kinds of products are needed for each procedure. They have to be aware ahead of time about the cases that are coming in and approve what products the radiologist or whoever is performing the procedure may need. Did having to think ahead and discuss needed products have an impact on the team relationship between the radiologists and the technologists? Yes. Prior to the implementation of CSS, it was contentious to even bring up the topic of case supplies — technologists felt that they didn’t even want to be “in the know” of what supplies might be needed, because then they might be blamed for not having a certain item. Now, they take the opposite approach. Our technologists can use the system to find out what the physician will most likely use and can say to the physician, “This is what I know we have on the shelf. Does it fit your needs and is there something else you may need?” It’s more of a partnership in taking care of the patient. It was not an issue that had been previously identified, nor a goal that we sought to achieve. But it is a very nice and positive achievement all the same. What types of reports do you typically review in CSS? I look at utilization of high-dollar items. We have a strong neuro-interventional department that takes care of coiling of brain aneurysms. There are a number of different companies selling the same types of coils with the same sizes. Physician preference is a challenge. Each physician has their own favorite product they would like to use. It has been hard for us at this time to determine products that are the standard of care or those that are the best product, since this is an evolving practice. I can see what products the department uses most often and note the sizes that typically serve our population. Then I can go back to the physicians and discuss product choice. I might say, “Because of our utilization of these sizes, we haven’t turned these other products in 6 months. Is this an opportunity for us to decrease pars, knowing we have a quick turnaround time when reordering the product?” Turnaround time is a very useful thing to know. If you order a product, but it takes 6 weeks to arrive, you need to make sure you have enough of that product to cover you for 6 weeks. When we order an item, CSS helps us stay on top of timing. We can see how long it has been since the order was placed, and when it was received. It helps us determine when to call and follow up on the order, and helps us troubleshoot orders that were messed up during processing. We know with great certainty what the lead times are for our products. For some of the high-dollar items, I do go ahead and pay a higher shipping rate, knowing that in the long run, it will cost me less to have fewer of that product on the shelf and I can get it in quickly if necessary. To know we can successfully maintain many of our most expensive products at a par level of 2 is valuable information and saves us money. Now, a challenging aspect of my work is keeping up with the trends of purchasing products, whether we own it or can consign it. Consignment is when the company brings in a product and hopes that we use it, and it sits on the shelf until needed. Only after we use the product do we pay for it. It puts a great deal more responsibility on the vendors to make sure that their product turns over at a level at which they are comfortable. In the past, it’s always been the hospital’s dollar sitting on the shelf. I now have vendors coming to me to say, “Do you think we can decrease the number of different sizes of coils on the shelf, because we’re not really turning these particular sizes?” I’m always smiling from ear-to-ear during these conversations, knowing that vendors now also feel the impact of having all these products on the shelf and not using them as often as they would like. It’s a real shift in who is responsible for the products and CSS has made this shift possible. Does the system keep track of consignment products as well? Yes. Identifying product as consignment using CSS is not a problem. Before the inventory management system, the word consignment made me cringe. A company would come and say “I have a great product and I would love to give it to you on consignment.” They would send in a shipment, we would put it on our shelf and probably use it, and just like everything else, we’d re-order it. But we might reorder 2-3 at the same time because staff didn’t want to order it one by one. Lo and behold, the vendor would come back in 6 to 9 months to perform their count and say, “You’re over par on a number of these sizes,” which meant we now owned these products. Or the vendor might also tell us, “You are missing product in these sizes,” which meant we had to bulk pay for this product! It was a nightmare. We were having a hard time verifying the vendor’s requests and documenting the accuracy of their count. I often wondered, “Did we really use this product? Was it used in a different lab and we weren’t told about it? Did it ‘walk’ out the door to a research project or perhaps another hospital?” It used to be very risky for us to have consignment on the shelf without a reliable inventory management system to help us track it. You mentioned you had 4 rooms. Can you share more about your lab? We have 4 rooms where we mainly do body procedures. We actually have a total of 7 procedure rooms, but the 4 rooms handle a particular section of body interventionalists that all do the same type of work. As a result, we were able to pull out all of the supplies from those rooms and make one central supply location. For neuro, we have one main room, so all the supplies for neuro are in that area. We’re not duplicating supplies, but the neuro room gets full. Two other rooms have minimal supplies based on the patient population in these rooms. Unlike a typical cardiac cath lab, we do a mix of procedures: head, neck, extremities, lower extremities, abdomen, drainage and so on. Our technologists float to each of these areas. Right now, we have a total of 12 technologists that work in the interventional department and they are responsible for covering all rooms. Our 12 technologists rotate call and we have 2 separate teams for call that cover the body area and the neuro area. They are a busy group. It is quite challenging for them to keep up with all the changing product, the rotating physicians and their preferences, plus keeping up on the standards of care. With CSS, our technologists have found that they don’t have to worry about what products are on our shelf, because now it’s always consistent. Now that there is time, the technologists and physicians are better able to look ahead on the patient schedule as well, in order to accommodate the needs of tomorrow, today. What is your overall procedure volume? We do approximately 9,000 procedures annually. Has the CSS system helped in terms of growing the lab or looking ahead for long-term planning? We have gained the confidence of many of our counterparts in the hospital, from purchasing and the OR to the cardiology lab and even other divisions within radiology. Because of CSS, the cath lab does have web access to view our inventory. We are looking to work with certain departments and combine our inventories, so we can hopefully eliminate duplication of products. The cardiac cath and the interventional radiology labs tend to do a lot of the same procedures, and we carry the same lines of products. If we can get to the point where we are ordering on-line and have that quick re-order process, I think it will be a good way to grow the system. As far as patient procedures, our physicians are definitely more apt to start marketing their business. The neuro department is a great example. The number of neuro procedures we are capable of and are now performing has grown significantly. Melissa Post can be contacted at