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Living Lean at Vail Valley Medical Center

Gerald J. Irvine MHA CMRP

The following article was published in Colorado HealthcareNews in July 2012.

My facility Vail Valley Medical Center (VVMC and entities) wasfaced with the unique challenge of covering a 60 square mileterritory when supplying 15 distribution sites in Eagle County (TheVail Valley) Colorado. Our primary distributor ProfessionalHospital Supply (PHS) was located in Denver and provided bulkdeliveries to the VVMC Gypsum warehouse located 40 miles from themain campus.

When I arrived at VVMC the traditional "break bulk" warehousemodel was being utilized by most medical facilities. However itwasn't working well in this "remote resort" environment. VVMC is asmall hospital with tremendous supply utilization due to itswell-known orthopedic group. Space and receiving constraints addedto the list of supply chain problems.

Our first step to resolve our supply chain problems was topurchase and install modern supply chain software. From there webegan to concentrate on how best to enhance the distributionprocess.

Using Lean methodology we examined each support process in theSupply Chain. We used a Lean problem solving technique called A3and addressed each major issue and incorporated it back to theoverall dimension of the entire process. We involved vendors keystakeholders and our internal team.

We made the decision to further enhance point-of-use technologyfor the entire system by using Pyxis Carefusion Supply Station.This product primarily used for drug inventory would instead beused for the intake and dispensing process of supplies.

Our existing process was to use Pyxis to send supply orders toour warehouse. Pick for supplies was done daily and incorporated 4deliveries from Gypsum to the consumable locations. Product stockouts were common due to the timing of picks of daily refills.

Our new technique incorporated a Logical Unit of Measure or"LUM" delivery method interfacing with McKesson's PathwaysMaterials Management software. PYXIS Supply Stations were boardedas ship-to locations with Professional Hospital Supply. The stationlocations are changed within the materials management software byan automated daily SQL procedure to become "stockless". Orders areinterfaced from Pyxis and auto-purchase orders are created and sentthrough the system.

This new environment allows orders to be sent directly to theprimary distributors' EDI system picked and delivered in totesduring early morning hours. The orders captured greater clinicaldaily demand during off hours for our staff. LUM freed heavilyused dock space during the day. It also provided fresh productfills at the beginning of the day shift. Stock outs havepractically ended as the hospital is completely restocked by 7:00AM.

Like Walmart's supply chain system "paying at the register" andimmediately generating orders to suppliers for restock was theright process for VVMC. This enhancement along with coordinated ITsystems gave VVMC a base point for the entire retrofit.

Our fill rate goal is 99% on commodities and 100% onspecialties. These necessary accuracy percentages pose their ownset of problems. Every item has to be checked between PHS PYXISand VVMC item master catalog numbers and units of measure neededto match perfectly or EDI invoices would fail.

Dave Petrowski our logistics technical specialist was broughtin to develop and design the LUM process incorporating the variousfunctional and technical integration strategies.

Contingency plans were incorporated to account for weather inthe mountains or distributor failure to make delivery. When ordersflow to Denver non-PHS items are picked early morning in Gypsum.This allows for a full compliment of products to be refilled usingLUM.

If PHS is unable to perform delivery a contingency order isplaced nightly from PYXIS where PYXIS delivery locations areswitched back to the bulk environment and replenished from theGypsum warehouse. Materials staff are redirected from Vail toGypsum for a full or partial pick depending on the situation. Onemid-day pick from Gypsum is turned on or off depending on theneed.

We are constantly improving and tweaking the process.Information technology is the key to our success and withouthaving the right technical staff in place this project would havebeen impossible to complete. More importantly talented detailoriented people make it work on both sides of the mountain.

Gerald "Jerry" Irvine has been with Vail Valley MedicalCenter since January 2007. He can be reached at