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					Pharmacy Supply Chain Assessment
Manual

Version 1.0




Pharmacy Supply Chain Assessment Manual – Version 1.7
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Contents

Introduction – Pharmacy Supply Chain Assessment Manual

Step 1 - Conducting an initial supply chain overview

Step 2 - Planning a more detailed assessment

Step 3 - Data gathering

Step 4 - Data interpretation

Step 5 - Identifying opportunities

Step 6 - Validation

Step 7 - Recommendations

Step 8 - Implementation

Step 9 - Benefits tracking

Appendices – tools and tables




Pharmacy Supply Chain Assessment Manual – Version 1.7
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 Introduction

 This manual has been developed to provide pharmacy personnel involved in a
 buying, or stock control role, with a simple but effective framework to conduct their
 own internal supply chain assessments. This is based on some of the
 methodologies developed within the NHS Logistics supply chain development
 team, and used by the three pharmacy Best Practice trusts.

 The assessment will help to identify savings both in terms of cost and time
 including:

           Stock reductions through the removal of excess stocks and more efficient
            replenishment methods.
           Improved material flow and storage efficiency.
           Release of pharmaceutically qualified staff from supplies activity to devote
            to patient care.
           Release of procurement staff from processing activities to more strategic
            aspects of purchasing.

Supply chain improvement is a very broad subject; but it is possible to take a more
focussed approach and address certain specific areas of concern - many of these
have been documented on the PaSA Pharmacy Best Practice website:

http://www.pasa.nhs.uk/pharma/pharma_supplychain.stm

Subjects currently documented include:

          How to formulate an inventory management policy
          Reducing wastage/returns
          Rating your supplier performance

Having selected an area of interest; this manual provides simple guidance and
templates to complete a successful assessment and a process for implementing
change and tracking benefits.

This is a step-by-step assessment guide as illustrated in this flow chart:

Supply chain assessment


   Step 1                       Step 2                     Step 3                    Step 4
   Conduct initial              Plan a more detailed       Data gathering            Data interpretation
   supply chain                 assessment
   overview




   Step 8                       Step 7                     Step 6                    Step 5
   Implementation               Recommendations            Validation                Identify opportunities




   Step 9
   Benefits tracking




Pharmacy Supply Chain Assessment Manual – Version 1.7
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What is a Supply Chain?
The supply chain for a typical Hospital pharmacy is represented in this simple
diagram.



                                          Manufacturers
                      Drugs,                                         Orders &
                     medicines                                       payments


                                           Wholesalers
                      Drugs,                                         Orders &
                     medicines                                       payments


                                         Pharmacy Store
                      Drugs &                                         Internal
                     medicines                                         orders


                                        Dispensary Stock
                      Drugs &
                                                                      Top up
                     medicines
                                                                     requests

                                           Ward Stock
                      Drugs &
                                                                   Prescriptions
                     medicines

                                              Patient



Step 1 - Conducting an initial supply chain overview

This section provides a method for conducting a basic health check on the whole, or
a specific part, of your existing supply chain. This could be conducted site/trust or
ward/department level - typically by at board, departmental head, or regional
procurement specialist level.

It will provide an understanding of the likely characteristics of your supply chain and
assist in identifying potential improvement areas. A more detailed assessment, and
the steps involved, is covered in Stage 2.

To complete this overview you will need the following:

        Understanding of current requisitioning/ordering methods
        Some knowledge of any stock control systems being used
        Details/estimates of current stock value and annual purchases (by
         stockholding location if appropriate)

The results of the overview can then be plotted on a maturity grid, which will provide
an indication of your trusts/departments current stage of supply chain maturity.




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Using the classifications shown in the table overleaf, assess your supply chain. A
more generic (less Pharmacy oriented) electronic version can be found by accessing
the file from the Knowledge Centre – this is available via the Supply chain section of
the NHS Logistics Authority website:

http://is35.logistics.nhs.uk/portal/page?_pageid=1013,1,1013_358627&_dad=portal&
_schema=PORTAL

The diagram overleaf illustrates four differing levels of development for a pharmacy
service; each quadrant contains similar aspects of performance, but at differing levels
of sophistication.

You may find that certain aspects of one quadrant are broadly applicable to you, yet
others from another quadrant seem more relevant. In positioning yourself on this
matrix, you should use intuition to an extent - and place yourself in the quadrant
which most broadly fits your current situation. This is so as to establish a baseline
against which future development can be measured.




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                                                Pharmacy Supply Chain Development Matrix
                                   1 ELEMENTARY                                               3 ESTABLISHED

                                 Manual environment                                          Automated environment
                              Paper based data capture                                   Leveraging systems functionality
                              Poor systems functionality                           Robust/accessible Management Information
                       Lack of quality Management Information                             Established reporting methods
                                   Labour intensive                        Efficient storage layouts and bar code maintenance within
                   Diverse storage, lack of uniformity, no bar coding                              departments
                                High processing costs                          Pro-active maintenance of stock levels/parameters
                          Routine contacts with Wholesalers                                    Low stock investment
                           Potentially high stock investment                 Partnership with Wholesalers to deliver improvements
                          Poor resource scheduling/planning                                      Greater efficiency
                                     Low efficiency                                 Consistent internal/external service levels
                         Poor internal/external service levels            Effectively using existing PDA demand capture functionality

                                   2 DEVELOPING                                              4 SOPHISTICATED

                              Mixed systems environment                     Fully automated environment including demand capture
                            Developing systems functionality                           Fully leverage systems functionality
                 Electronic scanning used at some point in the process   Continual refinement and development of management reports
                Reducing processing costs & Productivity improvements       Highly efficient storage layouts/planning and bar coding
                                 Less labour intensive                                               maintenance
                  Developing business relationship with Wholesalers                            Low processing costs
                Storage layouts and bar coding in selected departments                      Optimised stock investment
                     Improving quality of Management Information                  Fully leveraged partnership with Wholesalers
                                Lower stock investment                                        High levels of efficiency
                                   Improving efficiency                        High visibility of information and forecasting ability
                                Improving service levels                                Predictive analysis where required
                  Outputs used for resource planning and scheduling                 Optimised internal/external service levels
                            Stock levels planned for selected              Provides platform for future development of PDA demand
                               commodities/departments                                          capture functionality




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The characteristics shown within the quadrants are those typically found at the
differing stages of a Pharmacy supply chain and should provide an indication as to
the current levels of efficiency and effectiveness within your organisation. The
ultimate objective is to reach the bottom right hand corner of stage 4.

A Supply Chain evolution table is shown on the next page that identifies improvement
opportunities and likely benefits at each assessment stage.

Whilst many of these relate to the introduction of improved processes, electronic
ordering and stock control methods, there are often significant improvements that
can be made in the early stages of the programme, which do not require significant
process or technology changes. We call these „quick wins‟.

These arise from a better understanding of the replenishment process and the
identification of obvious inefficiencies/cost. e.g. removing duplicated activities and
reducing unnecessarily high stock levels.

Once you have positioned your self on the matrix, review the appropriate section of
the evolution table, then select which of the potential improvement opportunities, and
associated benefits arising, which could be most easily implemented.

This overview can now be used to formulate the basis and timeframe of your
improvement programme and enable prioritisation.




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                                                     Pharmacy Supply Chain Evolution Table
                Characteristics                            Improvement opportunities-next stage                  Benefits
Elementary         Lack of quality management                 Identify some „quick wins‟                              Early successes for the programme
                     information                               Develop clinical staff awareness                        Improved service levels
                   Manual environment                         Develop basic schedules and resource                    Releases clinical/admin time
                   Labour intensive                            management                                              Reduced processing costs
                   High processing costs                      Engage with Wholesalers                                 Significant stock/space reduction
                   High stock investment                      Identify performance measures                           Reduced obsolescence cost
                   Low efficiency                             Identify initial training needs                         Once off cash release
                   Diverse storage/layouts                    Implement bar code scanning                             Improved planning
                   Poor resource scheduling/planning          Implement stock level parameters
                   Emerging job descriptions/training
Developing         Improving quality of management info       Develop scanning at point of data capture               Further release of clinical/ admin time
                   Some electronic scanning                   Improved usage of management reports                    Consistent service levels
                   Less labour intensive                      Refine storage layout within departments                Reduced processing costs
                   Reducing processing costs                  Establish performance management                        Further stock/space reductions
                   Lower stock investment                     Develop joint service improvement                       Reduced obsolescence cost
                   Productivity improvements                   programme with Wholesalers                              Once off cash release
                   Outputs used for planning purposes         Implement regular service reviews                       Pro-active planning
                   Some stock management                      Establish stock classifications and policy              Improved service levels
Established        Robust/accessible management info          Predictive forecasting-stock levels and                 Effective use of available systems
                   Fully automated environment                 resources                                               Refinement of service levels
                   Low processing costs                       Continue to develop Wholesaler relationship             Further release of clinical/admin time
                   Low stock investment                       Monitor/refine performance measures                     Reduced processing costs
                   Effective resource planning                Regular and robust service reviews                      Additional stock/space reductions
                   Efficient storage layout/bar coding        Establish regular stock classification reviews          Professional/trained work force
                                                               Develop fully automated scanning regime                 Consistent service levels
                                                               Establish service levels of managed service
Sophisticated      Refinement of management reports           Deliver ongoing improvements through the                Efficient management of the supply chain
                   Sophisticated forecasting/predictive        exploitation of technology/functionality                Optimised service levels
                    tools                                      Implement full performance measurement and              Efficient deployment of resources
                   Highly efficient storage                    management., including SLAs                             Delivers ongoing efficiencies
                   Fully automated environment                Ongoing management of Wholesaler                        Responsive supply chain that can adapt to a
                   Ongoing review of Job descriptions          partnership                                              changing environment
                    and training                               Identify additional functionality                       Ongoing modelling across the supply chain
                   Optimised stock investment                     enhancements                                         Continue to optimise through the use of
                   High efficiency                                                                                      technology




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Step 2 - Planning a more detailed assessment

Planning is an important part of the assessment process. Developing a clear
understanding of what you are trying to achieve, how your assessment will be
conducted and who needs to be informed is essential.

Purpose

Be clear on why you are conducting this assessment:

Analysis for its own sake is a pointless exercise, it must have a purpose. The
assessment should be aimed at either improving service (if there is a verified need to
do so) or reducing cost/wastage, through lower stock levels or improved
replenishment processes.

Scope

This is about refining what should be included within your assessment from the initial
list identified in step 1.

If cost reduction is the principal driver then we suggest that you target the known high
value areas or processes, as these provide the biggest opportunities for short-term
improvement.

If the assessment is to address a perceived problem e.g. service, or excess stock,
these specific areas should be targeted.

For the more complex assessments, you may wish to consider the stock modelling
and process mapping tools, which are outlined in the data gathering section.

Objectives

Establish clear objectives about what you are trying achieve, and an idea of the
timescales involved. This should be a short list of what you want to get out of the
assessment and how each one will improve overall supply chain performance. This
could relate to areas such as: inventory reduction, replenishment lead times, cost
reduction, productivity improvements, etc

Resources

Now consider who needs to be involved in the assessment.

This is typically two groups:

Departments involved in the supply chain

These assessments cannot be approached as “just” a Pharmacy/Procurement
initiative. It is important that all departments involved in the current processes are
included and are well briefed. It will be difficult to implement any changes without the
support and understanding of all departments.

Resources to complete the assessment

Now consider the personnel who will work on the assessment. Ideally, these should
be people who have good interpersonal and analytical skills. In most cases these

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people will only be working part-time on the assessment, therefore, you need to
ensure that time is routinely set-aside from normal duties for this activity, otherwise
timescales may slip.

Communications

The next stage is to consider who you need to communicate to and whether it is for
information or approval to conduct the assessment.

It is important to obtain the support and commitment of the various departmental
managers before proceeding and this is best achieved through face to face meetings,
or using the senior management network/forum.


Step 3 - Data gathering

Methods

The data gathering exercise should start with a departmental review using the Supply
Chain Activity Questionnaire shown at Appendix 1. This provides a suggested
template to gather the initial data set necessary for a comprehensive supply chain
study. You may wish to use only part of it if your project is focussed on one specific
area, or disregard it entirely if you already have sufficient information available to
complete the study.

The data should ideally be obtained from sources such as systems reports and
management information. In the absence of such objective data; an alternative way
of obtaining more subjective data might be through personal interviews, this can
often be less accurate.

A visit to each department (or area) to conduct the interview will also provide you with
the opportunity to make your own visual assessment.

This overview will allow various comparisons to be made between each source of
supply, such as details of spend by stock/replenishment channels, transaction
volumes, stock levels and replenishment frequency, that can be used to identify
potential opportunity areas.

This information could then be entered into a simple spreadsheet or table to make
more extensive comparisons (See table 1 as an example), or listed manually if
relatively simple.

Departments will need to be revisited to qualify data or to ask additional questions.
This is a normal part of the validation process and this expectation should be set on
your initial visit.

Whilst locally developed tools/spread sheets may be used for conducting these
exercises, you may wish to use the stock and process mapping tools available on the
Supply Chain (Tools) section of LogisticsNet:

http://is35.logistics.nhs.uk/portal/page?_pageid=1013,1,1013_358627&_dad=portal&
_schema=PORTAL




Pharmacy Supply Chain Assessment Manual – Version 1.7
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Advice on the use of these tools can also be obtained by contacting the following
staff:

simon.heywood@logistics.nhs.uk
craig.reid@logistics.nhs.uk
rob.lowe@logistics.nhs.uk

The reduction of stock levels and replenishment process costs are major
opportunities in most supply chain improvements projects and therefore, we have
produced a few guidance notes for assistance:

Examples of potential areas of significance for deeper analysis

Stock levels

Stock levels for an item should be calculated based on historical demand plus an
additional safety stock, where appropriate, to meet unforeseen circumstances.

The exact setting of levels is entirely dependent on the method of replenishment, and
to some extent, on the nature or criticality of the product.

Whilst some general rules must be followed when considering stocking parameters,
there will often be good reasons as to why you may feel it best to have higher levels
set for particular groups of products.

For Example, in locations replenished by Materials Management teams the general
formula for automatic replenishment might be:

Reorder Level          1 weeks stock (Plus safety stock level of 3 days)
Reorder Quantity       1 weeks stock

The Safety Stock Level is derived from the number of day‟s stock required to equal
the number of days in between scanning sessions i.e. twice weekly scanning would
necessitate 3 days safety stock. This is on the assumption that replenishment follows
scanning sessions with regularity.

In this example, there would be a total of 17 days stock at the end user location
(assuming the location had just been replenished). Dependent on confidence in
„upstream‟ supply channels, there is a potential to further squeeze these parameters.

Replenishment process costs

The following average process costs for typical order methods at the Heartlands
Hospital Pharmacy were calculated during the Pharmacy Supply Chain Best Practice
Pilot Study at the Heart of England NHS Foundation Trust.

                                   Wholesaler                         Main Supplier
                          E-commerce           Fax                        Fax
Cost per Order Line          £0.65            £0.92                      £1.59
    (purchasing)
Cost per Order Line           £0.56                £0.56                   £0.56
(invoice processing)
Cost per Order Line           £1.21                £1.48                   £2.15
       (Total)


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The costs are based on end-to-end replenishment activities from requisition through
to supplier payment and may be useful as a benchmark to demonstrate the
estimated costs of typical replenishment methods to your organisation, without
undertaking a detailed process study. To work out an approximate total cost for each
procurement method, multiply the number of order lines processed by the cost per
order line for that method from the above table. These are averages therefore, at
some stage you may need to conduct a more specific analysis for your organisation.

Data sources

There are many different sources of data available within a trust:

Trust- wide:

Purchasing systems, Payables/Finance systems, Inventory audits

Receiving and Distribution

Warehouse Management Systems, Goods receiving logs, other local systems
alongside Pharmacy systems

Suppliers

NHS Logistics –Trust reports (via Logistics OnLine)
Other suppliers purchase and reporting systems

Individual department

Local software programmes, spreadsheets, manual records

The list is not exhaustive but illustrates the variety of sources available. Information
gaps may need to be filled short-term using local anecdotal information; these should
be validated as the assessment progresses.




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Step 4 - Data interpretation

Data comes in a variety of formats. The optimum method of manipulating and
analysing data is to do so using electronic files.

Before starting, take some time out to decide what type of summary is required and
how this should be presented.

        What data fields you need
        How they relate to each other
        Best means of analysing/presenting them
        Which tool is best to use (eg. spreadsheet, database etc.)

If other departments are providing data support, there will be additional requirements
as the assessment progresses therefore, raise this expectation at the initial meeting.

Step 5 - Identifying opportunities

There are a number of recommended stages to follow when identifying improvement
opportunities:

        Remind yourself of the assessment objectives
        Review good practice examples in the Supply Chain Development
         Knowledge Centre and PaSA website:

         http://is35.logistics.nhs.uk/gateway/index.jsp
         and
         http://www.pasa.nhs.uk/bestpractice/
This will give some indications of what you should be aiming for.

        Review good practice examples in your own trust/confederation
        Identify the best performances by category within your own assessment
         sample and understand why?
        Review poor performances and understand why?

When this exercise is complete, you should be able to identify the areas for
improvement in order to conduct a more detailed evaluation.

A simple assessment table and guidance notes are shown at Appendix 2

This will allow you to present in a simple tabular form by area:

        The main findings
        Opportunities identified
        Estimated benefits
        Possible constraints to realising the benefit

Note the use of High (H) Medium (M) Low (L) rankings to help prioritise the
improvement opportunities.




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Step 6 - Validation

Validating the findings and opportunities is an important part of the process.

Pharmacy management review

Findings should be reviewed with departmental management to ensure they
accurately reflect the department and to gain their input on the improvement
proposals. It will be their teams that have to embrace these changes and therefore, it
is important you have their support.

Supply chain management review

A review should then be held with those responsible for managing the supply chain
improvements throughout the trust, to obtain their input and agreement regarding any
operational or strategic plans that might influence your final recommendations.

Step 7 - Recommendations

Following validation, the opportunities should be developed into a series of
recommendations for implementation.

Recommendations assessment

The list of recommendations should be evaluated to identify ease of implementation,
likely benefits, potential constraints and any significant operational risks that can be
reduced through implementation.

To assist this process an example of one form of prioritisation assessment table and
matrix is shown at Appendix 3

Taking an individual recommendation, you should score each category on a scale of
1-4 dependent on ease of implementation or level of benefit. Tasks which can be
easily implemented, or which carry a high benefit, should be given the highest score
(correspondingly, those which are hard to implement, or give low benefit, should be
given a low score).

     For example:
     If recommendation 1 is easy to implement give it a high score: 3-4
     If benefits are average give it a medium score: 2-3

The higher the sum of the two ratings, the more attractive the recommendation is for
implementation in the short term.

The prioritisation process should be completed with a small review team to get
different perspectives, which will result in a more balanced and reasoned output.

Once this exercise is complete, recommendations can be prioritised for
implementation by plotting them on the prioritisation matrix.

By plotting each task on the grid, according to it‟s implementation and benefit, you
should arrive at a distribution of tasks across the matrix. The greatest benefit in this
instance, is derived from tackling tasks which occur at the top right of the matrix.



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Other tasks should be dealt with as one happens across them, by moving diagonally
down and to the left of the top right corner.

In the (partially populated for ease of understanding) example in Appendix 3, the task
to be tackled first is 1.1, followed by 1.2 and 2.1. Then the cell immediately below it
(containing recommendations 1.3, 1.4 and 2.2) should be dealt with; 2.3 should then
be tackled as it is at the top of the diagonal line of recommendations in that tranche
of similarly assessed tasks.

Once there is agreement on the prioritised recommendations, implementation
planning can commence.




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Step 8 - Implementation

The implementation process should have a sponsor within the organisation; this is
likely to be a senior manager within a department/trust. They should have a vested
interest in the success of the implementation and provide guidance and top-level
management support when necessary.

Each recommendation should have an action plan and an owner. Typically, the
owner is the area manager who is responsible for implementing the recommendation.
However, with site wide implementations this can be a function manager e.g. supply
chain, facilities, etc.

Major/complex implementations may need to be managed as a formal project using
Microsoft Project software. If you are not conversant with the software, or Prince 2
project methodology, you will need to seek support and guidance from your local
training team.

Most plans however, can be managed using a simple action-planning document; an
example is shown at Appendix 4. The plan simply identifies what is being
implemented, lists the various scheduled tasks that have to be achieved to complete
the implementation and specifies the owner of each one.

The owner must ensure that each task is completed on schedule, and advise if any
dates cannot be met, including the implications for the overall timetable.

A regular review with the sponsor will ensure that the plan remains visible and help to
maintain focus and momentum.

A series of action plans can be managed through a simple implementation planning
table as shown at Appendix 5. This method uses a „traffic light system‟, which
provides visibility of all key tasks within the plan and across different plans.

Green = Complete, no further action.
Amber = Scheduled completion date not yet reached with no known problems.
Red = Completion date not achieved, problem identified or other slippage.

Task dates should remain amber until the task has been completed (change to
green) or completion date has passed or cannot be met (change to red). Red task
dates are a signal that the plan is not on schedule and needs reviewing with the
owner to determine how to get the plan back on schedule.




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Step 9 - Benefits tracking

It is important to measure the actual benefits that result from the various
improvement plans. These must be clearly identifiable and measurable

An example of a benefits measurement matrix is shown at Appendix 6. Identifying
typical supply chain benefits, their measurement and likely information sources.

It is important to identify a starting point, or baseline measure, prior to
implementation, and then track progress both during and after implementation. If
results start to deteriorate during implementation, it is an early indication that
something might be going out of control and needs attention.

Once implementation is complete, you should arrange a review with your manager
and relevant departmental managers to assess:

        What happened during implementation?
        Have the predicted benefits been achieved?
        What learning points can be applied to future improvement projects?

This is called a post-implementation review.




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Appendices- tools and tables:

     Appendix 1. Pharmacy supply chain questionnaire
     Appendix 2. Opportunities assessment table
     Appendix 3. Implementation prioritisation matrix
     Appendix 4. Action plan
     Appendix 5. Action plan summary table
     Appendix.6. Benefits measurement matrix




 The supply chain development team hope that the tool kit proves useful in your
 continued endeavours to improve supply chain performance. The tool kit will be
 updated on a regular basis with additional material

 Should you have any questions regarding the manual please e-mail:
 frank.hill@logistics.nhs.uk




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     Appendix 1




     Pharmacy Activity Questionnaire

     Please complete a separate questionnaire for each department

1. Name of trust

2. Total non-pay spend per year for
   department (£)

3. Estimate of departmental time spent on
    replenishment activities per week (hours).
(Are these categories relevant to pharmacy?)
Please enter the following information for          NHSLA        ‘Non           Consignment
each category                                       ‘Stock’      Stock’         Stock

5. Value of spend per year (£K)

6.    Number of order lines

7. Please enter what % of items in each category are replenished by the following methods:

 a) Hand written paper requisitions

 b) Auto Data Capture

 c) On-line requisitioning

 d) Call off/ Standing orders

8.    Value of stock held

9. Number of weeks stock cover

10. Frequency of Replenishment (tick box)                Daily       Weekly              Monthly

11. Please add any further comments or information which you feel will be appropriate:




Name………………………………… Contact number……………………… Date……………




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 Appendix 2


Date:
                                             Pharmacy Supply Chain Opportunity Assessment
Department            Strengths                     Opportunities                            Benefits                            H/M/L   Constraints
  Department 1

Supply chain          Particular strengths/skills   Headline opportunities identified as a   Estimated benefits as a result of           Issues that need to be
details:              identified within the         result of the initial assessment::       implementing the changes:                   considered/addressed
                      department that will assist                                                                                        to make the
*Consumable           the implementation of any     * Review of current stock                * Stock reductions                          improvement:
spend: £              changes:                        levels/parameters
                                                                                             * Lead time reductions                      * IT Systems
*Inventory value: £   * Support for change          * Review of current
                                                      replenishment methods                  * Procurement savings                       * Resources
* Weeks of stock      * Product knowledge                                                    .                                           (personnel)
                                                    * Develop on-line ordering by            * Reduction in replenishment
*Consignment          * Supply chain practices        user.                                    activities- freeing up resource           * Funding (£)
stocks £
                                                    * Implement/extend Materials                                                         * User
*Pharmacist hours                                     management stock/non-stock                                                         concerns/confidence
supply chain
 activities:
hrs/week


Department 2




                                                                                    Page 20 of 25
Appendix 3

Opportunity Implementation Prioritisation
Opportunities for implementing supply chain best practice have been identified:

ID No.                          Implementation Opportunity / Task                          Benefit   Ease     Total
                                                                                           1=low     1=hard   Score
                                                                                           4=high    4=easy

IM.1      Maximise use of automated stock management to release staff resource
IM.1.1        Define Inventory management policy                                          4         3        7
IM.1.2        Set up inventory control criteria for Category A products (exceptional      4         3        7
                 items categorised as most critical, high value, high turn and needing
                 higher degree of management intervention) based on agreed inventory
                 management policy
IM.1.3        Set up automated stock management on JAC for Cat B products based           3         3        6
                 on agreed inventory management policy
IM.1.4        Set up automated stock management on JAC for Cat C products based           3         3        6
                 on agreed inventory management policy
IM.2      Catalogue Management
IM.2.1        Define process for adding/amending drug record in local catalogue           4         3        7
IM.2.2        Define role and appoint Catalogue Manager                                   4         2        6
IM.2.3        Review and update drug records for category A products                      4         1        5
IM.2.4        Review and update drug records for remaining products                       3         1        4




Note 1 – See attached prioritisation matrix




                                                                           Page 21 of 25
Implementation Prioritisation Matrix

High             2.3 Review/update drug record for Cat A                         1.1 Define Inventory management policy
                 products
                                                                                 1.2 Set up inventory control criteria for Cat
                                                                                 A products

4                                                                                2.1 Define process for creating new drug
                                                                                 record




                 2.4 Review/update drug record for cat B/C                       1.3 Set up automated stock management
                 products                                                        on JAC for Cat B products

                                                                                 1.4 Set up automated stock management
3                                                                                on JAC for Cat C products

                                                                                 2.2 Define role & appoint catalogue
Benefit                                                                          manager




2




1



Low                                   1                      2   Ease of Implementation                 3                        4        High

                                                       Low          Medium                               Very High               Do Now
          Don‟t bother                            Very Low                                                    High


                                                                 Page 22 of 25
Appendix 4

                                         Supply Chain Action Plan

Recommendation:                                                                               Owner:

                  Implementation tasks                     Responsibility   Completion date            Comments

1.

2.

3.

4.

5.

6.

7.

8.

9.


10.


11.


12.




                                                   Page 23 of 25
Appendix 6
                                                            Benefits Measurement
 Appendix 5
Benefits                                         Supply Chain Action Plan Summary
                                                   Measure                                                                     Source
1. Release of hours for more productive            a. Headline measurement: Process cost/order line + resource deployed  Process mapping/costing
     activities.
 Action Plans                               Department       Owner           Plan    Due                                       Departmental; headcount
                                                                                                             Task completion dates            Complete
                                                                                                                                 data
 1.                                                b. Pharmacy      Activity removed
                                                                              Y/N                                              Departmental review
                                                   staff:           Time for additional patient care duties                    Process mapping
 2.                                                                           Y/N                                              Redeployment activities
                                                   c. Supplies:     Ability to absorb additional activities/workload           Volume/headcount
 3.                                                                 Re-deploy staff to projects/strategic duties without
                                                                              Y/N                                                analysis
                                                                    backfill                                                   Redeployment activities/
 4.                                                                 Extended penetration of Materials Management
                                                                              Y/N                                                departmental headcount
                                                                                                                                 data
                                                                                                                               Resus reports
 5.                                                                           Y/N
                                                   d. Receiving & Ability to take on additional duties                         Process mapping/costing
                                                      Distribution: Improved product flow                                      Customer satisfaction
 6.                                                                           Y/N
                                                                    Improved housekeeping – H&S benefits                       Health & Safety audits
2. Elimination of Store related activities (if     a.               Removal of warehouse/storage facility                      Physical exit of area
 7.                                                                           Y/N
     applicable)                                   b.               Elimination/reduction of warehouse/storage costs           Budget reports
3. Inventory reductions                            a.               Inventory reduction year on year                           Inventory audits (year
 8.                                                                           Y/N
                                                                    Reduction in obsolescence trends                             end)
                                                                                                                               Budget reports
 9.                                                b.                         Y/N
                                                                    Improved housekeeping in departments                       Visual/H& S audits
                                                   c.               Storage space redeployed to other activities               Physical exit of storage
 10.                                                                          Y/N                                                area
                                                   d.               Once off procurement savings v budget                      Budget reports/savings
                                                                                                                                 analysis
4. Reduction in cost of acquisition through        a.               Unit product costs year on year v index                    Procurement unit cost
     total supply chain management                                  Supply chain processing costs                              Process mapping/costing.
                                                   b.               Product/Supplier rationalisation                           Purchasing database
5. End user satisfaction                           a.               Service levels maintained/improved                         Customer survey
                                                                                                                               No increase in „Stock
                                                                                                                                 outs‟
                                                                                                                                  (year on year log)
6. Through improved knowledge become an            a.               Establish standard operating procedures                    Operating manual
     intelligent supply chain partner              b.               Job structures, competencies, training plans               Competency framework



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