Let’s face it, warehousing of product in essence should be
relatively simple. The product is received, putaway, picked and then shipped
with an occasional count to make sure everything is in order.
However the consequence of an inefficient and ineffective
warehouse can be disastrous. Product that is built to exacting specifications
in your pristine manufacturing operation that disappears in a warehouse “black
hole” is never going to impress any customers. Bottom line, if you can’t find
the product, you can’t ship it, or if it takes longer in labor costs to find it
than the customer paid for it, then your chance of a long term profitable
business are very slim. Your business is the sum of all parts and unfortunately
the lowest common denominator usually thrives.
Nowadays many companies have a WMS or Warehouse Management
System to help them manage all the people and processes within a warehouse. While
a WMS can help control the movement and storage of materials within a warehouse
and process associated transactions, such as receiving, picking and shipping,
even when used well, there are still many “hidden costs” that can have a major
impact on the bottom line, customer satisfaction and overall business success.
Here are three “hidden costs” that can be addressed with
proper use of a WMS.
Travel time is the second most expensive variable cost, labor
being the first. It is virtually
invisible and extremely expensive if allowed to go unchecked. Just as a manager would not want to see
employees wandering around with nothing to do, equipment should not be crossing
the floor unloaded, or traveling to the far corners of the warehouse to pick
the product when the same product is available within eyesight. Three solutions
available with WMS can resolve this issue.
Slotting is the placement of products within a warehouse
facility, to maximize the use of a warehouse’s available cube space by improved
storage and picking efficiency and reductions in warehouse handling cost, by
optimizing product location and balancing workload. This strategy takes a number of factors into
consideration, such as location, dimensions, and weight, to profile and
sequence items down the pick path.
Proper slotting leads to reduced picker travel, more stable loads, fewer
accidents, and less product breakage.
Interleaving is a practice that uses WMS to assign tasks to
workers in ways that make use of each trip that they and their associated
equipment make during their work shifts.
This practice typically can eliminate 25-30% of the machine travel
associated with pallet moves.
Picking strategies are one of the easiest and more cost
effective ways to maximize productivity and improve order accuracy. This operation is also in direct connection
to customer satisfaction, as quickly and accurately processing orders is
essential to the bottom line. Batch
picking involves picking more than one order at a time. Using the WMS to help
batch orders together in different ways, allows the workers to optimize picks
and increase pick density, which reduces the number of times a picker has to travel
through any aisle. Zone picking divides the warehouse into multiple zones and
assigns workers to pick only within one zone reducing travel time. Orders are either picked and passed from zone
to zone for fulfillment or consolidated at a point before shipping. Order picking is often the most preferred
method of picking, but may not be the most effective. An order picker picks one order at a time,
following a route up and down each aisle until the entire order is picked. This method may work well in an operation
with a low number of orders, and a high number of picks per order; however,
using this method in a warehouse with a large number of smaller orders would
lead to excessive travel time.
Inventory management is a balancing act. You can’t have too much, which could lead to
shelves filled with expired or obsolete products; excessive expensive inventory
holding or a larger facility than is really needed. You don’t want too little, resulting in
product shortages, unfulfilled orders, and unhappy customers. You need just the right amount of stock. Companies can increase profitability 20-50%
through careful inventory management.
Tracking inventory is essential. Product should be tracked and recorded during
initial receipt, as bad practices at receiving only get worse later. Whether it is through the use of bar codes or
radio frequency identification (RFID), a detailed transaction history of
inventory flowing in and out of the warehouse can improve visibility and reduce
errors. Real-time data in WMS means the
system and the warehouse are never out of sync, ensuring better checks and
balances with audits and cycle counts.
Shelf life and stock rotation can also have a major “hidden
cost” implication. Warehouses need to now know where each
lot is stored and when and if the product is set to expire. Most Warehouse
Management Systems offer various controls to help control the shipping of these
products, such as LIFO, FEFO and FIFO. Without these controls product will
expire without ever being picked. The costs associated with this can be
outstanding. There is the obvious cost of the manufacturing of these obsolete
products but also expensive warehouse space has been used to house the product
and costly labor to receive and putaway the product can also be incurred with
The final area of “hidden” costs is the organization of the
warehouse itself. Cost savings in travel
time and inventory control can be lost if the warehouse is an incomprehensible
maze. The first step is to determine how
the facility will operate and develop a master strategy. Decide how space is used and think in three
dimensions; rather than expanding the footprint, perhaps there can be better
use of vertical space. Examine potential
traffic patterns and storage locations. Consider
how items will be picked, how they will be putaway, and how the stock will be
replenished. Group products into
families based on the results of this analysis, and configure the WMS to
support this plan, building in exception protocols. Lastly, plan to work and work the plan. Without regular upkeep, a well-organized
warehouse can quickly become disorganized and difficult to navigate
Remember, warehouses should never be rocket science. Having a
strong WMS will help reduce costs, increase inventory accuracy and storage
capacity, and improve customer satisfaction. This will at least allow you to
survive against your competitors. Using a strong WMS effectively to manage all
processes will help you drive out these additional “hidden costs”, giving you a
tangible advantage against your competitors.
Every hospital organization is unique and has attributes
that separates them from others, these can include: number of beds, programs
and services, budgets, patient population served, models of care and staffing
models. However, there are many similarities – there never seems to be enough
beds and inevitably patients have to wait for services, whether they be
internal services or those provided by your community partners. Patient flow
and patient throughput is a major focus in all hospitals. The question remains,
how do we measure patient flow and what is the gold standard or benchmark for
excellent patient flow?
Due to the uniqueness of each organization, there is no one
metric or statement that can be set for all hospitals. The targets will continue
to evolve and new goals should always be reached for. The key is to start measuring and continue to
strive for better.
IDENTIFYING OPPORTUNITIES FOR PROCESS IMPROVEMENT
How do you know where to focus your efforts?
That’s where Medworxx can help. Like
the old adage says, you can’t manage what you can’t measure. Medworxx data is already doing the
measuring—you just need to start looking at the data and creating the internal
benchmarks for your unique organization. Monitoring data to identify where
process improvement efforts should be focused can include:
Admission day practices – are we admitting the right
patients? Medworxx data on Avoidable Admissions will give you the insight into
the data to understand who is being admitted and if those patients are
appropriate for that level of care
Discharge practices – are we discharging or transitioning
patients as soon as they are clinically stable? Medworxx RFD/T data will
provide organizations with the number and percent of potential avoidable days,
often referred to as the ‘low hanging fruit’.
Even a small reduction in avoidable days can result in aiding
significantly in daily bed flow challenges.
Focus on organizational (internal) barriers - Anecdotal
information can help guide organizations to areas in need of process redesign.
Are there clear referral processes to multidisciplinary team members and are
diagnostic tests being ordered early enough in the stay of the patient?
TRENDS FROM PATIENT THROUGHPUT REVIEWS
Through the work Medworxx has completed in the past year
conducting Patient Throughput Reviews (PTR), we have documented the following
patient flow trends in Admission Day Practices, Discharge Practices and
Admission Day Practices
Potential avoidable admissions ranged from 10-19% with an
average of 13%
This number represents all patients that did not meet the clinical criteria for
admission. What does this mean for an organization? Those patients occupied a
bed but did not require that specific level of care. This prevents other
patients that do meet clinical criteria for admission to come into hospital and
obtain the required treatments and services. This creates bottlenecks and
backlogs in all areas of the hospital.
Organizations that measure and create strategies to reduce avoidable
admissions will have a positive return on patient flow and throughput.
RFD/T days ranged from 23% to 35% with an average of 31.5%
This represents the patients that were clinically stable but remained in
hospital due to barriers, interruptions or delays in their care. Potential avoidable days is an important
metric to measure as these are days that could have been saved and beds turned
over for other patients that would clinically require the bed. Reducing these numbers is vital to creating
capacity and flow in your organization. It also leads to greater patient and
Waiting for allied health assessments/treatments, medication
treatments such as IV antibiotics and diagnostic testing orders/delays, are the
most commonly documented reasons patients remain in hospital after they have
been deemed clinically stable.
Understanding the precipitating factors that contribute to these delays is
important. Data can help determine:
When are these delays occurring? Time of day or
day of the week, could the issue be related to weekend or off hour coverage
At what point in the patient journey are these
Are tests and services being ordered late in the
admission or could these services be provided on an out-patient basis?
Objective data enables your hospital to create strategies
for improvement. So remember, start small but think big and before you know it
your organization will look back on your journey with a true feeling of
accomplishment and the knowledge that slow and steady always ensures successful
OPTIMIZING PATIENT FLOW
Benchmarking is key. Begin by getting a baseline to
jumpstart your measurements. Start small and ask questions. Develop a culture
of continued improvement throughout your organization by:
Engaging and communicating with staff
Developing a plan - start with something attainable and
create a plan that strives to keep the finger on the pulse
Revisiting your data on a regular basis
Setting new benchmarks and goals monthly, quarterly, and
These are just a few strategies that will get your
started. Medworxx is committed to
helping your organization realize its potential. Please reach out to a member of our team as
we are excited to help you develop the plan that works best for your
Remaining in the hospital
when a patient no longer requires an acute care setting puts them at risk for
many reasons: nosocomial infections, physical deconditioning, and decreased
mental status are some key examples. The longer the Length of Stay (LOS)
exacerbates these and results in poor clinical outcomes and dissatisfied
patients and families. In hospitals we, the care providers, are overwhelmed and are often task
focused, which prohibits us from not focusing on progression of care. We need to be go back to basics and put the
focus back on the patient and providing quality care.
Clinicians and Care Providers
Engage Earlier - start engaging the patient and the family about their goals of care on the day of admission.
Make Care Coordination Patient Focused in Real Time - assign a target Estimated Date of Discharge (EDD)
on the day of admission and continue to review it daily as the patients
progress through their care journey to discharge. Discharge can be to their home
or transition to an alternate care setting.
Be Proactive - discharge planning must be
proactive not reactive.
Identify Barriers and Delays on a Daily Basis - focus on patient flow daily to identify any
barriers, delays or interruptions in the patient journey. These barriers should be identified and acted
upon daily in real time to ensure the patient is receiving the best care, the
right level of care and having progress in their care path daily. Keeping patients involved in their daily care
and hospital LOS goals with improved communication and collaboration puts the
patient first and will improve patient satisfaction.
Standardize Processes - hospitals need to standardize their patient flow
processes, make them visible, and communicate across the organization.
Encourage Collaboration - embrace a culture where
every member of the Multidisciplinary team is involved in the care plan of the
patient which includes the discharge plan.
Although many hospitals now have discharge planners, social workers, patient
flow coordinators to facilitate discharge plans, it is still the responsibility
of all members of the care team.
Care delivered must be a value-add to the patient. We do not want our patients sitting around wondering what is happening with their plan of care. Communication is key among the care delivery team and, more importantly, with the patient and their family.
We have all heard the phrase "happy wife, happy life." For clinicians out there, "happy patient, happy nurse."