1. Lawson Healthcare Solutions Optimization of Key Resources Forms a Foundation for Excellent Patient Care
Lee Farabaugh, Eric Lott, Tom McLoughlin, Ashwini Patki

2. Enterprise Resource Management
Offers solutions to the 3 critical areas of Resource Management:
Workforce: Lawson Human Capital Management
Supplies: Lawson Supply Chain Management
Capital: Lawson Financials

3. Lawson Supply Chain Management
Provides the latest inventory management tools to the health care system
Compatible with U.N. Standard Products and Services Code® (UNSPSC) and GS1
Leader in industry
60% of the top 50 Integrated Delivery Networks
33% market share (hospitals with 250+ beds)
4,000 customers in 40 countries, including 100 health care providers
Competitors include IBM/Cognos, McKesson and Oracle
GSGS1, the standard currently advocated by AHRMM to promote safe and efficient supply chain management1

4. Data Flow
Upstream
Suppliers
Master File
Lawson Materials Management Information System (MMIS)
Users
Admin
Downstream
Oracle, HealthQuest, Crystal Reports
Data including product descriptions is fed into MMIS from the suppliers and a master file is created by Materials managers to complete product info and to attach a vendor contract, which ensures accurate pricing and ordering. Descriptions of special orders not supplied by cardinal can also be entered.
Within MMIS, users place orders, receive deliveries and manage par inventory. Downstream healthquest captures data for patient billing, admin can generate reports from Crystal and Oracles finance and accounting functions with orders/delivery. In addition suppliers receive orders.

5. Materials Management is the branch of logistics that deals with the tangible components of a supply chain... this covers acquisition, quality control , purchasing and ordering…, and the standards involved in ordering, shipping, and warehousing. Wikipedia
Manufacturers
Supplies
Distributors
Cardinal
Direct shipping
Facility
Mailroom
Receiving
Warehouse
Patients OR
Floors
Supply room

6. Traditional/ Legacy Model
Large Inventory of Items maintained in hospital warehouse and storage areas in hospital.
Large staff maintains inventory and searches for items as they are requested by units
ESI/ NOVA software utilized to place orders, manage stock

7. Users’ Needs / Par Levels
Process
Users’ Needs / Par Levels
Orders Placed
Items Shipped
Items Received
Items Distributed

8. Users needs→→ Requesting Items
Tasks
Catalog of items
Purchase Orders
Lawson Solution= Materials Management Inventory System (MMIS)
On-line, searchable database of available items
Detailed descriptions of products from supplier
Each item contains all necessary fields to ensure order accuracy
Every item has an associated vendor contract to ensure pricing accuracy
Multiple names and item numbers for a given item
Outdated paper catalogs
Paper
Time-consuming
Lost orders/tracking
Approval process
Purchasing authority

9. Requesting Items Challenges
Lawson Solutions = Requisition Self-Service (RSS)
Disconnect between user of items and supply technicians
Orders placed directly by users
Enhances accuracy and cost control
UAB –
over 2000 employees trained
500 are regular users
Error prone enhanced by associated product details and vendor contracts
slow

10. Requesting Items- Par Inventory
Tasks
Establish and adjust par inventory goals for units and storage areas
Determine items used on a routine basis
Place orders to replenish items, i.e. maintain par levels
Lawson Solution
Maintains electronic database of par levels
Supports hand held scanners
Scanners generate automated orders
The “par” level is the maximum number of items to be stored in a given area
Lawson Solutions: Par levels-Adjustable, Generates reports to flag insufficient levels
Scanners:used by counters who scan remaining items on units , sync results to main system and to replenish items

11. Placing Orders Tasks Lawson Solutions
Purchase orders faxed to suppliers
RSS and MMIS support Electronic Data Interchange (EDI) through Global Health Exchange (GHX)
Enhances productivity
Creates an electronic trail of orders
Facilitates payment
Allows future use of GS1 standards
Lawson Electronic Fax Integrator
Tasks/Purchase orders :Slow, Potential for lost orders, Minimal tracking
Lawson: decreases turnaround time, allows for just in time inventory, fax integratorConverts fax orders to EDI

12. Shipping & Receiving Tasks Lawson solutions
Cross reference items with orders
Receipt of items from Cardinal, other distributors and delivery providers (Fed-Ex, UPS, USPS)
Update Accounts Receivable
Electronic matching of orders and deliveries
Maintains preset palate unloading by final destination
MMIS interfaces with UAB Finance’s Oracle enterprise
Any item received from cardinal or by delivery service can be scanned or uploaded by item number to match orders in MMIS
Since orders are placed with final destination information, Cardinal loads trucks in palates by destination, e.g. OR, NICU, facilitating rapid same day distribution

13. Distribution Tasks Lawson Solutions Deliver items
Track location of items
Respond to recalls
Monitor expirations
MMIS includes final destination information on all items
MMIS identifier specifies deliverey location
Facilitates locating recalled and expired items

14. Lawson Materials Management
Improved Accuracy and Enhanced Productivity
MMIS
RSS
Decreased Costs
“Just-In Time” Inventory
Fewer Staff
Improved Patient Care
Right Item/Right Patient/Right Time
Eliminates Waste

15. Visit to Supply Closet
This is a picture of supply closet where they maintain at least one of each items.
But how all this merchandise gets to UAB? Who generates this data?
Data goes into the system from University-wide vendor management system via an Oracle interface, Orders from nurses and unit secretaries and data from barcode scanning when supplies arrive by Cardinal Health truck or through UPS/FedEx

16. Data entry to Lawson Handhelds synced with Lawson
Lawson system auto ordering:
Manual order by entering Lawson number
Shopping paradigm to search the product catalog
Templates based on common product sets to place standard orders
Par levels of supplies are maintained at department units and in stockrooms by a team of employees who visit 162 locations six days per week. This team counts remaining inventory with a hand held scanner which then syncs with the Lawson main system. Number of items required in stock are determined by Lawson system. Lawson auto orders the regular items this way.
For specialty ordering, data is manually entered into the system by entering either the Lawson number, or a shopping paradigm to search the product catalog or use templates based on common product sets to place standard orders.

17. Handheld Form View
This is a form that is displayed on hand held while tracking number of supplies. Handheld gives you the lead to count the items. For example it tells which item to count and location identifier no. refers the shelf location of a particular item. This assures that the counting team doesn’t miss to count any item. Dennis mentioned that they are planning to analyze the hand held device data to improve the process.

18. What happens to supplies?
Data into Lawson by 10 pm
Supply orders fulfilled by vendors
One package per department
Cardinal truck arrives next day at 1 pm
Packages stocked according to chart
Packages distributed to departments
All the orders are to be placed in the system by 10 pm into Lawson. Lawson feeds orders to various vendors. Vendors pack all the items for one department into one package. This way it is assured that every item required goes to that particular department. This also saves packaging time and cost. Cardinal truck arrives every day at 1 pm. Packages are stocked into warehouse according to the chart and they are distributed by underground distribution lines to various UAN health departments.

19. Hi Tech Display 
This looks like a Hi tech display but is a simple drawing of stocking layouts that is displayed in the warehouse at all times. Every box on the board tells which department the supplies are going to. This way every Supply services department (SSD) employee can guide the boxes in priority order to appropriate departments. It points out how the supplies should be stocked in a order that brings efficiency in distribution . This also ensures Just in time delivery. These boards are not the best way to do this but this system seems to work well for SSD. As the diagrams are erasable, can be knocked down my accident and may pose a handwriting error SSD should consider a better way to display these stocking diagrams. Also if this data is stored electronically, it might help into some other matters.

20. Ease of operation Accessibility Flexibility Timely delivery
UNSPSC codes:
No special degree/ certification required
Comparatively shorter training
Better reports
What we liked about Lawson is that it offers great accessibility to order supplies to almost all users who are authorized to use the system. Not only supply managers but physicians, nurses and unit secretaries are trained to use the system and they can place orders at any time of the day and hence great flexibility. Orders are compiled by 10 pm/ 6 days a week and arrive very next day from various vendors by 1 pm. It complies with the Just In Time philosophy adopted by SSD. UAB uses a set of codes called United Nations Standard Products and Services Classification (UNSPSC) codes that allow the Support Services Department to compare purchases and spending against other institutions. So the comparison is fair. UNSPSC codes are classification codes that group similar products allowing buyers to code purchases to analyze their spending. Just like at Target store, your receipt displays your spending by category for example, baby items, food items, etc.
Users are not required to have a specialized degree; they can learn and update the knowledge by attending special trainings, labs, seminars or webinars.
Over 2000 employees are trained on the system, but approximately 500 individuals are regular users. Average training time for end users is 45 minutes.
Ease and quality of reports by Lawson is much better than ESI system (the earlier system at UAB)

21. Scope of Improvement RFID – potential Visual effects
Ordering specialty items
UAB is planning to add RFID for faster uploads of counts from handhelds. This is going to be implemented over the next few months. The system display looked more geeky and tedious. That could have been more user friendly and intuitive. The manual feeding of data, especially the specialty items can take a while as there is no unique description for some of the medical supplies items. Choice of multiple descriptions or keywords can simplify the manual ordering of specialty items.

22. Literature Review: Patient Safety
Standard Products and Services Code® (UNSPSC®) – Product Classification
GS1 – not-for-profit organization dedicated to the design and implementation of global standards to improve the efficiency and visibility of supply chains globally and across sectors
Cardinal Health, GHX and Lawson (all components of the UAB supply chain infrastructure) are members of GS1, although UAB is not currently listed
Need for patient safety is real:
Medication adverse events (GS1 received over 100,000 reports in 2007)
Medication recalls (over 1,000 recalls in 2007)
Counterfeiting of medical devices
Disaster planning, shortages/substitutions
Determining appropriate devices
The problem: Same number, different products; Same product, different numbers
GLN = Global Location Number: A globally unique 13-digit number that identifies: Legal entities, Functional entities, and Physical locations
GTIN = Global Trade Item Number: A globally unique 8, 12, 13, or 14-digit number that uniquely identifies products and services
GDSN = Global Data Synchronization Network: acts as a "yellow pages directory" oversees data pools and the items within them provide seamless integration from manufacturer to distributor to provider
Pelletier KD (2009). Mayo Clinic/Cardinal Health GLN Implementation. Mayo Clinic.

23. Literature Review: RFID
Radio Frequency Identification (RFID) provides a way to improve patient care
Tracking patients, staff, and assets (equipment and supplies)
Cost is prohibitive for items under $15 at this time
NY Presbyterian/Weill Cornell uses RFID to track supplies in cardiac surgery department
$230,000 savings on unneeded heart valves
Cost of readers and tags
New York Presbyterian/Weill Cornell uses RFID to manage supplies and improve patient care in cardiac surgery department
System comprises a storage cabinet with an RFID reader, RFID tags, and a management database
When supplies arrive, staff creates tags with item number and expiration date
Users swipe badge to open cabinet. Use touch screen to select patient for whom supply is needed. Anything taken out is recorded by the reader.
Patient safety = open patients, then determine size valve needed. Legal and safety risk if inventory is not complete.
Kumar, S., Swanson, E., & Tran, T. (2009). RFID in the healthcare supply chain: usage and application. International Journal of Health Care Quality Assurance, 22(1),
Scheurenberg, B. K. (2008). RFID moves beyond assets: Provider organizations use tracking technologies to help improve workflow, quality of care and patient safety. Health Data Management, 16(1),

24. Literature Review: Case Studies
Catholic Health Initiatives
Mountain States Health Alliance
$125 million cost savings
Utilization: 20% savings
Freight: 10% savings
Staffing: 4% savings
Supplies: $64% savings
Reduced supply report data sources from 30 to 1
Lawson Business Intelligence (BI) tools provide operational reports
Created single materials management office to handle 7 facilities
Electronic ordering increased 85% (95% with Lawson fax integrator)
Lawson Requisition Self Service increased online orders by 49% with no staff increase
References:
Patient care is the winner with efficient operating model: Catholic Health Initiatives. Case Study (2009). Reviewed on January 27, 2010, from:
Barlow, Rick D. (2009, July). Basic instincts drive Mountain States’ forward momentum: ‘Hub-and-spoke’ IDN masters supply chain fundamentals with IT creativity. Healthcare Purchasing News, p. 8.

25. Literature Review: Lessons from Mass Retail
Supply chain streamlining in mass retail (Wal-Mart) translate to health care cost savings
Commoditizing currently customized items
Providing retail clinics as preferred providers of routine treatments, tests, and vaccinations
Bundling services and products into an episode of care
Items that could be commoditized: generic pharmaceuticals, routine lab tests and procedures, services such as treating uncomplicated ear infections. Criteria for making a product/service a commodity: research that defines the product/service and how it is provided, minimal need for customization, condition/patient/treatment not associated with complications or side effects, and product/service must have the ability to be produced at high volume.
Retail clinics: future expansion into routine wellness services and monitoring of chronic illnesses.
Bundling should only be done when it improves efficiency and price.
Agwunbi, J., London, A. (2009). Removing Costs from the Health Care Supply Chain: Lessons from Mass Retail. Health Affairs. 28(5),

26. Literature Review: Metrics and Benchmarking
Benchmarking supply chain for continuous performance improvement:
Setting the Foundation
Gathering Data
Interpreting the Benchmarks
Taking Action
Why do hospitals benchmark their supply chain activities? Because optimizing the supply chain is a continuous process of performance improvement. We saw this at UAB, where the Support Services Department (SSD) recently took over the function of delivering supplies to various locations around the hospital to further reduce costs. They are also looking at implementing RFID to allow the people who count supplies using handhelds to upload their accounts at RFID reader touchpoints, reducing the time it takes for supply levels to be updated.
Solid foundation:
Establish objectives- use project management tools to create a project charter, and share it with all stakeholders
Recruit the right people – including someone from executive leadership, finance, accounting, IT, quality assurance, clinical staff, vendor staff
Utilize industry standard definitions, such as the SCMetrix tool from the Association for Healthcare Resources & Materials Management
Facilitate communication
Gathering data:
This can be easy or complicated, depending on readiness and experience with benchmarking
Establish a schedule for completing data collection, and meet often to review results and reconsider assumptions
Interpreting Data
Highlight the relationships between operational and organizations practices and and capabilities
Include not only financial data but contract compliance, reporting structures, and product delivery
Taking Action
Develop a business plan on potential areas of improvement including projected ROI.
Smith-Daniels,Vicki. (2008). Hitting the Benchmark: How To Get The Most From Your Metrics. Materials Management in Health Care, 17(9) ,18.

27. Summary Lawson streamlined the UAB Hospital supply chain
Integrated Lawson with UAB Oracle system
Requires less space and capital
“Just In Time” philosophy

28. Possible Improvements
More “user friendly” technology
RFID system
Bundling of certain materials (i.e. gauze, bandages, latex gloves)

29. Questions???