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Aptean Blog

Articles posted during June 2017

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Hidden Cost of Warehouse

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.

TIME

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

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 no payback.

ORGANIZATION

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

CONCLUSION

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.

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June 28, 2017 Steve Adams Jump to Comments

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Optimizing Patient Flow

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 Internal Barriers.

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. 

Discharge Practices

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 staff satisfaction.

Internal Barriers

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 issues?
  • At what point in the patient journey are these delays noted?
  • 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 results.

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 yearly

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 organization.

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Clinical Engagement: A reciprocal commitment from staff & their organization to improve patient satisfaction

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.

The Organization

  • 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."  

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