Supply Chain Re-Design – LUM

Presenters Jami Ellis – Director Supply Chain Logistics UAMS Medical Center Peter Saviola – VP Operations, Medline Industries Inc. 2

Foundation Single Source Distribution Logistical Assessments Go Live Support Operational Excellence Process Mapping & Simulation Put Away EfficienciesLUM on Carts Suture & Endo Logistics Innovative Solutions Dedicated ServicesCustomized ServicesAdvanced 3PL »Phase I Foundational - Transition to Single Distributor for all points across the Continuum of Care »Phase II Operational Excellence – Implementation of Best Practice Recommendations for the Supply Chain »Phase III Innovative Solutions – Third Party Logistical Services from Maumelle DC Supply Chain Transformation

Current State Distribution Center: »18k Square Ft. of floor space »31 FTE’s (of that 12 are U-temps due to the planning of this project) »7 day a week operation (not 24/7) limited weekend hrs. »Provides services to the entire campus – hospital, Center on Aging, Cancer Institute, Jack Stephens building, and other off site clinics. Hospital Storerooms : »2 existing – one for sterile supplies supporting the OR and the other one supporting nursing floors and clinics attached to the hospital (central supply and sterile supply) »Nursing floors have both bulk par rooms and pyxis cabinets – bulk par rooms are ordered using barcode scanners. 4

UAMS went “live” with Medline industries in September 2014 as our Primary Med-Surge Distribution of bulk medical supplies (Acute). Current fill rates with Medline are exceeding contract terms of (97.5%). With Medline operations running as they are, the UAMS Supply Chain Management Department feels that we are in a good position to start a LUM program between Medline and UAMS. A LUM program to UAMS will allow us to repurpose operations and activities at the Distribution Center (DC) 5 Background

»Financial Benefit »Savings opportunity of $331K »One-time inventory reduction approximately $800K »Organizational Benefits »Consistent and reliable delivery schedule »Eliminate additional product touches »Reduced inventory 6 Why LUM?

Able to purchase items by “each” or box Items picked and packed by department Streamline product (Dock to Doctor) Reduce redundant steps in the supply chain Reduce operational expense Speed 7 LUM = Logical-Unit-of-Measure What does that mean? {

Pre LUM Process

LUM Process

10 Before LUMAfter LUM

Bulk to LUM Conversion Plan 90 Day Process 55 Project Tasks Across 4 Sections

Put Away Ready LUM Deliveries 12 Each tote has »Container Contents Labels inside the tote »Customer PO, and PO line # »Customer Item # »Qty in tote »Excellent Audit / Check document »Unique Sort / Stacking codes are established »Totes are stacked onto carts sorted for internal delivery

13 Phased Approach Update »Phase 1 –Distributed by Medline LUM to Nursing Non Pyxis (Bulk par rooms) »Started February 22, »Phase 2 – Distributed by Medline to Nursing Pyxis »All items in pyxis sourced from the UAMS DC will need to be in Medline or have alternative sourcing »Starting in May 2016– next couple of weeks »Phase 3 – Items not currently moving through Medline distribution »Minimize the items NOT moving through the Medline distribution channel. »3PL for Items that Cannot be distributed by Medline »Sourcing for supplies not delivered by hospital supply techs – offsite buildings

Parcel 3PL i.e. PPI Traditional Parcel »Third Party Logistics (3PL) Product Movement Dedicated Space

15 Thank You Questions