Comment: Can healthcare learn lessons from the aerospace industry?

8-Jul-2013

David Snelson of Waer Systems reveals how the healthcare industry needs to look to other sectors improve efficiencies

When it comes to improving supply chain and inventory management the NHS could learn several valuable lessons from other industries, according to DAVID SNELSON from Waer Systems

The pressure on the NHS is increasing, so improving procurement has to be a top priority if it is to deliver a £20billion saving by the end of the financial year 2014/2015.

The pressure on the NHS is increasing, so improving procurement has to be a top priority if it is to deliver a £20billion saving by the end of the financial year 2014/2015

But, without robust, flexible solutions, the targets to improve procurement simply won’t be met. The old maxim ‘work smarter, not just harder’ has never been more relevant. To achieve these, the NHS would do well to look to the manufacturing industry, where supply chain optimisation and inventory management are key to maintaining cost-effectiveness.

Take the aerospace sector, for example. In aerospace and defence, the exact location and movement history of high-value, fast-moving assets such as containers, tooling, equipment and consumable items are now being routinely tracked in real time using Radio Frequency Identification (RFID). Over time, RFID technology and equipment have matured to a state where the range of practical and cost-saving applications is now much wider than it once was and in the healthcare industry in particular, there is an ever-expanding array of items where RFID tracking is now a tantalising proposition for ‘smarter’ working.

The NHS would do well to look to the manufacturing industry, where supply chain optimisation and inventory management are key to maintaining cost-effectiveness

RFID tags are a little like barcodes, but a lot more sophisticated. They can be used for tracking more or less anything, from a freight container to a patient. Tags are embedded into the item they are tracking and can hold huge amounts of updatable information relating to the item they are on – with information flowing both ways from a software programme in real time.

Ten years ago, RFID was not a viable proposition for tracking low-cost items, as the tags themselves were quite costly, but the price has come down dramatically in the last few years, making RFID much more attractive.

The precision and exacting standards of aerospace and defence have resulted in the evolution of this technology over many years and there are many clear and obvious applications for the technology in healthcare organisations, for example:

  • Inventory Management: Each NHS trust has a complex network of equipment, often stored in multiple locations with a variety of suppliers, sometimes for the same item, i.e: trust ‘A’ has two hospitals as well as several separate storage locations. At any one time the trust is not necessarily sure what quantity it has of what items at any particular location. This means that there are a lot of error-prone human processes involved to try and replenish the stock from the correct location, and let the supplier know stock is low so as to avoid a stock-out
  • Replenishment Ordering: Although trust ordering systems are often integrated with NHS supply chains, many of them are not at all well integrated with the systems that are in place to actually control the inventory locally on trust premises
  • Patient-Level Costing: Systems that are designed to support patient-level costing and patient administration are often limited in their effectiveness because in many cases, they lack a quick and straightforward method of recording patient-level consumption. Manual documentation and data input are still used extensively throughout the NHS
  • Surgical Loan Kits: Because of the continuously increasing variety of materials and services being offered to patients by NHS trusts, sourcing the complex array of materials presents a number of challenges.

Trusts have begun to use third party suppliers to provide kits of material on loan for specific operations, which helps to deal with a lot of the complexity. However, it does bring with it a number of new issues:

  • The contents of the ‘surgical loan kits’ are not accurately listed anywhere on the trust’s systems as the kit is treated as a single item, so the trust isn’t fully in control of what should be in the kits
  • Recording the materials taken out of the loan kits in theatres is completely manual which is time consuming and can naturally lead to human error
  • As a result there are relatively frequent discrepancies between what trusts think they have used and what the suppliers of the kits claim have been used, giving rise to significant wastage of resources and financial loss

Supply chain management is a fast moving industry and with technologies such as RFID, for example, now a much more affordable proposition, the opportunities for improved supply chain visibility and vastly improved management are there for the taking

All of these examples have solutions. The problem, however, is that off-the-shelf software often isn’t flexible enough to solve these specific problems, causing headaches and putting a strain on resources by requiring excessive training.

Supply chain management is a fast moving industry and with technologies such as RFID, for example, now a much more affordable proposition, the opportunities for improved supply chain visibility and vastly improved management are there for the taking.

For example, return on investment on our projects is typically realised within two to four months of go-live, with on-going savings then becoming available either for investment in other areas, or to lower the levels of pre-existing budgets while maintaining service improvements. With the NHS’ improvement targets looming ever closer, this has to be good news.

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