Methods for Improving Materials Management

As health care costs continue to rise and reimbursements decline, the focus on health care efficiency is increasing,(1) including the use of Lean management principles.(2-4) These principles initially were crafted and used in the manufacturing industry to improve productivity and efficiency by eliminating waste or non-value-adding activities.(5,6) Naturally, inefficiencies exist in health care as well, and addressing waste can lead to improved productivity, increased patient safety, and positive financial outcomes.(7-9)

The operating room is likely among the most expensive areas in the health care system, but it also is responsible for significant financial contributions.(10) Indeed, these two attributes make the OR prime for Lean development, as small improvements can lead to meaningful monetary gains. Studies have shown applying Lean thinking to the OR can improve flow, efficiency, and fiscal return by identifying and eliminating waste.(1,3,10)

Lean thinking identifies seven types of waste: overproduction, unnecessary inventory, waiting, waste of transporting, over processing, defects, and unnecessary motion (see Table 1).(11) In the OR, Lean interventions tend to focus on waiting, waste of transporting, overprocessing, and defects, but not on unnecessary inventory.(3,10,11) Considering 47 to 56 percent of OR budgets can be dedicated to inventory,(1) OR inventory likely would benefit from the application of Lean methodology.

Poorly managed OR inventory may lead to increased expedited shipping charges, oversupply, expired supplies and insufficient supplies.(1,12) Precise management can lead to a 15 to 30 percent reduction in supply costs.(13)

Deficiencies in OR inventory management can lead to patient safety issues as well. Studies have found up to 20 percent of nurses’ time may be dedicated to “logistics” such as traveling, delivering, retrieving and waiting, and much of this surrounds inventory in the OR.(9,12) Consequently, nurses are pulled away from caring for the patient, likely decreasing patient safety as a result.(9) Using expired supplies and running out of supplies are also important considerations, as both could lead to patient safety issues.

Using a timed delivery Kanban card system, or TDKCS, can support Lean implementation in OR inventory management to mitigate patient risk and improve financial success.

Methods

A multidisciplinary team of OR staff members, materials staff members, a urologist (also the vice chief of staff), and administrators was formed to create a process flow map of the existing OR materials management process (see Figure 1). Under the management process, each OR nurse was assigned inventory management for a specific materials section of the OR, such as laparoscopic materials, endoscopic materials, urologic materials, and general materials. The nurses counted and monitored inventory levels and placed orders with the head of the hospital’s materials management. The department head reviewed the orders and sent them to the chief financial officer, who reviewed and modified the orders as deemed necessary.

Figure 1. Process flow map of initial or materials ordering process

The nurses shared that there was no schedule for inventory management; they counted and ordered inventory when they had time to do so. On busy days, supplies waited until the next day. If there were several busy days in a row, supplies were ordered as needed. When a nurse was absent, the other nurses tried to help with the absent nurse’s supply duties.

Par levels were used as inventory goals; those used for initial modification in this study were set arbitrarily by the using physician several years previous. The OR nurses also revealed that they often ordered more materials than needed, knowing the order would likely be modified while moving up the administrative chain. There was minimal standardization of this process.

After the ordering process was mapped and examined, multidisciplinary meetings were held to address the implementation of the TDKCS, including the concept of runners, repeaters and strangers.(14) Runners are frequently used high-volume materials; repeaters are used frequently but less often than runners;(4) strangers are infrequently used low-volume materials.(14) The decision was made to begin TDKCS implementation with the materials involved in urologic cases, as the vice chief of staff was a practicing urologist and contributed information on materials issues he had experienced. Running out of specific materials for ureteroscopy was a common problem and initial efforts were targeted in this area.

The nurses identified a few frequently used urologic materials as difficult to manage. As illustrated in Figure 2, cards were made and placed in front of the products; the products could not be removed without removing the card first. The card receptacle was located near the identified runners (see Figure 3). The new inventory was then loaded on a first-in/first-out basis, such that the newest materials were placed in the back. This area was the OR materials “supermarket.”

Figure 2. Kanban card placed in front of product

Figure 3. Kanban card receptacle

The ideal route was identified and determined to be run once or twice a day. The route consisted of the materials team picking up the cards from the receptacle, getting the supplies, and restocking the items, thus eliminating the nurses’ involvement in inventory management of these items (see Figure 4). Once the cards were in place and both the OR team and materials team were educated on the process, they began using the card system. Inventory levels, expedited freight and nursing intervention were monitored.

Figure 4. TDKCS route

Results

The TDKCS process resulted in more accurate inventory numbers of the tracked items. Once the route was running, nurses no longer counted and ordered these items; the materials team was now solely responsible for them. As the route evolved, more items were added and challenges emerged. Initially, carts were kept out of operating rooms so the materials staff wouldn’t have to change into scrubs to run the route. However, as the number of items increased, some were available only in the ORs. Therefore, the route had to be designed to enable the materials team access to the ORs. This was done by running the route at low-volume or OR down times. As items were added to the TDKCS, specialty carts were designed to effectively and efficiently run the route. A urology cart, orthopedics cart and endoscopy cart were created to keep items separate but available. The system was continually audited for flow issues and modified as needed to improve the route so the materials team could do its job without interfering with the OR staff.

As the route matured, the materials manager was able to predict appropriate inventory levels based on real-time usage data. This allowed for increased inventory turnover and decreased excessive in-stock inventory levels. The inventory footprint decreased through better inventory tracking, as did the time nurses spent counting and ordering inventory. TDKCS nearly eliminated expedited shipping. During the first two months, expedited shipping costs decreased by 20 percent. Since implementation, none of these items has had to be ordered and shipped via expedited freight, as the materials team is aware of real-time use and can order well in advance to maintain appropriate stock levels.

Discussion

Using the TDKCS has several advantages, including removing from nurses the onus of ordering, potentially increasing patient safety, improving inventory management, improving financials, decreasing expedited freight, and expending minimal cost to implement and maintain.

Interestingly, although nurses do not receive formal education on materials management in nursing school, many ORs use nurses to manage approximately 80 percent of OR inventory.(12) Consequently, ORs frequently run out of important supplies, which leads to a stressful working environment and may lead to possible patient safety issues as nurses are pulled away from patient care.(12) The card system affords nurses the opportunity to focus less on materials and more on patient care, likely contributing to better patient outcomes.(9) The OR nurses simply pull the card and place it in a bin, allowing the materials department to track the inventory and the nurses to focus on patient care, commensurate with their training.

The card system also facilitates more efficient inventory management when nurses are absent, as the system precludes the need for nurses to cover each other’s ordering responsibilities and eliminates obvious problems therein. Kanban cards are also ideal for the on-call staff, who may not be familiar with supplies used in after-hours emergent cases, as the system requires minimal knowledge of materials to function well in the operating room.

With the TDKCS, the OR materials are managed more effectively because the materials department can track the specific items in real-time. This allows for more accurate assessment of item usage rather than arbitrary par levels, permitting inventory management using a perpetual rather than a periodic system.(1) A periodic system counts inventory on a scheduled basis and maintains par levels, assuming continued average use. This system leads to inaccurate inventory, excess supplies and supplies in multiple locations.(1) The perpetual system allows for real-time updating of inventory and increased knowledge of use patterns, allowing the materials department to make better-informed decisions about ordering materials.(1) The perpetual system also precludes the need for time-consuming inventory counts.(1,12)

Improved inventory management also has positive financial implications. Twelve inventory turnovers a year is the current recommendation to carry less product and decrease waste.(15) But, the typical operating room turns over inventory 2½ times a year, at most, highlighting a clear area for improvement.(15) Using a real-time inventory management system and stocking on a first-in/first-out basis reduces waste by limiting excess and expired supplies.(1) Ordering based on a real-time use likely leads to increased inventory turnover and less inventory in the hospital. Because in-house and expired materials do not produce income, higher inventory turnover leads to improved monetary gains.(1,12)

The TDKCS has advantages over other inventory management systems as well. The system was perfected by Toyota, arguably one of the leading Lean manufacturing systems,(16) is taught around the manufacturing world, and is considered the gold standard of waste elimination and efficient materials flow.(6,17) Initiation requires minimal startup cost and no additional personnel.(17) Rather than hiring new staff and implementing costly technological systems, the organization can rearrange current staff and materials flow.(1,12,17) The cards might need to be replaced as they become worn, and the route should be audited periodically and altered as more waste is identified and usage patterns change. However, the system is easily scalable and requires minimal upkeep.

There are disadvantages to implementation of the TDKCS as well, including barriers to adoption. In this case, the rapport between materials management and the OR staff was amenable during multidisciplinary meetings; however, trust was questionable. The OR staff’s primary concern was running out of supplies, in part because of the potential to increase patient safety issues as aforementioned — a concern the OR staff strongly reiterated. Fear of blame when supplies ran out also caused significant apprehension.

Discussions about how the OR staff prevented these issues before Lean implementation revealed that OR staff hid frequently used materials in multiple locations, including in lockers, different ORs, behind other materials, or on the wrong materials rack, all in an effort to have extras “just in case.” Other studies have confirmed similar issues in Lean implementation.(12) To build trust between the materials team and the OR staff and to instill confidence and trust in the system, the route began with six runners. Implementing the route slowly allowed monitoring for possible flow problems, which are much easier to fix with a small volume of items as opposed to the entire OR materials catalog. This method of implementation also allows staff members to quickly see how the route will work.

These “quick wins” or quick successes are paramount to establishing trust between the materials staff and the OR staff.(13) As the route continues to work as designed, trust in the system builds. More materials are then added to the TDKCS in a stepwise, methodical fashion. Lean team meetings continued after initial implementation to ensure the route was running well and to identify other runners to add based on the OR staff experiences. The staff elected to add the items most difficult to manage and monitor — likely, the items that frequently required expedited shipping or were out of stock.

Discussions after implementation revealed widespread acceptance of the system. The OR staff was pleased to have more time to focus on patient care. They were surprised that as they continued to pick materials for cases, the materials reappeared in the proper location without any effort on their part. The OR staff quickly stopped monitoring these items and handed over the job to the materials team. Job satisfaction increased and the stress level in the workplace decreased.

The materials team also mentioned benefits to the system (see Table 2). Specifically, tracking and counting the high-volume materials became more manageable. Team members quickly stopped worrying about excess, hidden inventory; incidents of urgently running materials up to the OR slowed dramatically; and the need to drive to other hospitals to borrow materials stopped.

Physician involvement in materials management is likely among the most efficient methods to reduce costs and contribute to success in the supply chain.(18,19) Other studies have stressed the importance of physician involvement in Lean implementation in the OR as well, involving both materials flow and patient flow through the OR process.(1,3,10,12,13) Additional quality studies in academic journals are needed to promote physician involvement in Lean implementation, as most current literature is published in journals infrequently read by physicians.(1) As hospitals continue to evolve and become “Leaner,” physician involvement likely will become increasingly important. This will not only benefit the hospital, but also might allow physicians to be part of this change rather than subject to it.

It is important to remember that Lean implementation encompasses several components, such as level scheduling, materials flow, workplace organization, information flow, operator and machine balance charts, supplier development, and identifying the seven types of waste.(1,3,10,11,14,20,21) Knowing where to begin can be difficult. Some Lean experts advise starting the Lean process by developing an efficient materials flow system for two primary reasons:

• Inefficient flow of materials makes the proficient flow of other processes difficult.

• Materials often take substantial capital and improvements lead to tangible monetary gains.(17)

Initially, waste in the materials process should be identified by using a process flow map, as illustrated in this study, which has been shown to effectively identify waste in manufacturing as well as in medicine.(17,22) Once waste is identified, a plan to remove the waste can begin to form.

This study was conducted in a small hospital, which may call into question the ability to generalize. A smaller hospital likely lends itself to easier implementation, team involvement, and route identification and flow. However, this method of materials management also has been effectively implemented in very large manufacturing environments with high volume materials turnover.(17) Nonetheless, further studies on materials management in the OR using this system are needed to confirm widespread applicability.

The Lean implementation team also sought guidance from a Lean professional (or sensei) in materials flow with more than 10 years of experience, which might not be immediately available at all institutions. This Lean team also had an engaged and willing physician, who was also the vice chief of staff, to help with implementation and to help other surgeons get involved in Lean thinking. The initial materials targeted were those pertaining the vice chief of staff’s service and this likely contributed to the success. Willing physicians might not be available at all institutions, which may be a barrier to success.

Conclusions

Applying Lean principles to OR materials management using the TDKCS can be effectively implemented at minimal cost with desirable benefits. The TDKCS decreases waste and possibly leads to improved patient safety, fewer expired products, improved inventory management, increased nursing availability for patient care and improved financials. A multidisciplinary team involving all aspects of materials flow is crucial to success. Consideration of implementing this system is encouraged in other ORs as well as in other hospital areas.

References

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