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Keeping an eye on the big picture: Mayo Clinic's integrated ... - GS1

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<str<strong>on</strong>g>Keeping</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>eye</str<strong>on</strong>g> <strong>on</strong> <strong>the</strong> <strong>big</strong> <strong>picture</strong>:<br />

<strong>Mayo</strong> Clinic’s <strong>integrated</strong> supply chain<br />

m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

Abstr ac t<br />

The U.S. supply chain has adv<str<strong>on</strong>g>an</str<strong>on</strong>g>ced in o<strong>the</strong>r industries (retail, grocery, general merch<str<strong>on</strong>g>an</str<strong>on</strong>g>dise),<br />

but <strong>the</strong> healthcare industry as a whole is just now learning <strong>the</strong> benefits of electr<strong>on</strong>ic commerce,<br />

vendor-m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged inventory (c<strong>on</strong>signment), evaluated receipts settlement, <str<strong>on</strong>g>an</str<strong>on</strong>g>d just-in-time<br />

replenishment. Some suggest <strong>the</strong> primary reas<strong>on</strong> we struggle in healthcare is due to <strong>the</strong> lack of a<br />

solid, underlying infrastructure, <strong>on</strong>e that facilitates <strong>the</strong> integrati<strong>on</strong> of <strong>the</strong> supply chain with clinical<br />

systems through interfaces <str<strong>on</strong>g>an</str<strong>on</strong>g>d data st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards. For <strong>on</strong>e Integrated Delivery Network (IDN), <strong>Mayo</strong><br />

Clinic, integrati<strong>on</strong> is beginning to show <strong>the</strong> promised benefits <str<strong>on</strong>g>an</str<strong>on</strong>g>d allowing <strong>the</strong> industry to finally<br />

see <strong>the</strong> <strong>big</strong> <strong>picture</strong> – <strong>the</strong> role data st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards play in improving supply chain perform<str<strong>on</strong>g>an</str<strong>on</strong>g>ce.<br />

By Joe Dudas,<br />

Director of Accounting<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d Supply Chain<br />

Informatics, <strong>Mayo</strong> Clinic<br />

Here a system, <strong>the</strong>re a system:<br />

piecing it all toge<strong>the</strong>r<br />

<strong>Mayo</strong> Clinic has in place m<str<strong>on</strong>g>an</str<strong>on</strong>g>y systems <str<strong>on</strong>g>an</str<strong>on</strong>g>d processes that help<br />

its healthcare professi<strong>on</strong>als underst<str<strong>on</strong>g>an</str<strong>on</strong>g>d, m<str<strong>on</strong>g>an</str<strong>on</strong>g>age <str<strong>on</strong>g>an</str<strong>on</strong>g>d track <strong>the</strong><br />

movement of medical products throughout its facilities. <strong>Mayo</strong><br />

has <str<strong>on</strong>g>an</str<strong>on</strong>g> Electr<strong>on</strong>ic Medical Record system <str<strong>on</strong>g>an</str<strong>on</strong>g>d to support our<br />

business functi<strong>on</strong>s, such as hum<str<strong>on</strong>g>an</str<strong>on</strong>g> resources, accounting <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement, we use <str<strong>on</strong>g>an</str<strong>on</strong>g> Enterprise Resource<br />

Pl<str<strong>on</strong>g>an</str<strong>on</strong>g>ning (ERP) system. <strong>Mayo</strong> has also developed its own<br />

software to m<str<strong>on</strong>g>an</str<strong>on</strong>g>age supplies at <strong>the</strong> point of patient care that we<br />

call SIMS (Surgery Informati<strong>on</strong> M<str<strong>on</strong>g>an</str<strong>on</strong>g>agement System, although<br />

use is bey<strong>on</strong>d surgeries).<br />

The ERP system c<strong>on</strong>tains <strong>the</strong> source data for suppliers, products<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d pricing for <strong>the</strong> entire enterprise. SIMS c<strong>on</strong>tains <str<strong>on</strong>g>an</str<strong>on</strong>g> item<br />

master file for point-of-care sites within our hospitals, including<br />

<strong>the</strong> operating room (OR), Ca<strong>the</strong>ter Lab, Interventi<strong>on</strong>al Radiology<br />

(IR) <str<strong>on</strong>g>an</str<strong>on</strong>g>d Gastroenterology (GI). These SIMS files are synchr<strong>on</strong>ized<br />

with our ERP system, mainly using <strong>the</strong> product item number<br />

stored in <strong>the</strong> materials m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement module. Integrati<strong>on</strong><br />

between SIMS <str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>the</strong> ERP has been built (both process <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

automati<strong>on</strong>) over <strong>the</strong> past 10 years. Our integrati<strong>on</strong> with <strong>the</strong><br />

revenue cycle (billing) has evolved similarly <str<strong>on</strong>g>an</str<strong>on</strong>g>d it, too, utilizes<br />

<strong>the</strong> ERP Item number in <strong>the</strong> Charge Master.<br />

limiting mistakes <str<strong>on</strong>g>an</str<strong>on</strong>g>d making <strong>the</strong> entire process more efficient.<br />

With our SIMS system, we sc<str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g>d document excepti<strong>on</strong>s that are<br />

not <strong>on</strong> <strong>the</strong> preference card or items that require serial tracking.<br />

The goal is to make everything as simple as possible for those<br />

doing <strong>the</strong> sc<str<strong>on</strong>g>an</str<strong>on</strong>g>ning, in most cases our nurses. All items arrive in<br />

<strong>the</strong> OR (from our centralized OR Inventory Core) with a barcode for<br />

sc<str<strong>on</strong>g>an</str<strong>on</strong>g>ning. For supplies, approximately 30% of barcodes need to be<br />

created “in house” <str<strong>on</strong>g>an</str<strong>on</strong>g>d 70% c<str<strong>on</strong>g>an</str<strong>on</strong>g> be sc<str<strong>on</strong>g>an</str<strong>on</strong>g>ned exactly as <strong>the</strong>y arrive<br />

from <strong>the</strong> vendor. We also use grocery style bar-coded catalogues<br />

for items that are not practical to barcode.<br />

For impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts, all items must have <str<strong>on</strong>g>an</str<strong>on</strong>g> internally generated<br />

barcode, because <strong>the</strong> vendors currently lack st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardized<br />

barcodes which c<str<strong>on</strong>g>an</str<strong>on</strong>g> be used for this purpose. The barcode for<br />

As we work diligently to cut costs while delivering high quality<br />

patient care, a focus area for us has been <strong>the</strong> OR. We use <str<strong>on</strong>g>an</str<strong>on</strong>g><br />

automated physici<str<strong>on</strong>g>an</str<strong>on</strong>g> preference card system, which helps to<br />

automate <strong>the</strong> functi<strong>on</strong>s of <strong>the</strong> OR. Preference cards make it easier<br />

for nurses to provide <strong>the</strong> correct supplies <str<strong>on</strong>g>an</str<strong>on</strong>g>d equipment for each<br />

surgery, reducing <strong>the</strong> number of supplies opened unnecessarily.<br />

Preference cards also help in streamlining <strong>the</strong> billing process,<br />

2010/2011 <strong>GS1</strong> Healthcare Reference Book


<str<strong>on</strong>g>Keeping</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>eye</str<strong>on</strong>g> <strong>on</strong> <strong>the</strong> <strong>big</strong> <strong>picture</strong>:<br />

<strong>Mayo</strong> Clinic’s <strong>integrated</strong> supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts is generated internally by entering <strong>the</strong> serial number,<br />

lot number <str<strong>on</strong>g>an</str<strong>on</strong>g>d expirati<strong>on</strong> date. C<strong>on</strong>signed items <str<strong>on</strong>g>an</str<strong>on</strong>g>d tissue are<br />

also stored in SIMS. The system has <str<strong>on</strong>g>an</str<strong>on</strong>g> indicator for c<strong>on</strong>signed<br />

verses owned items which is rec<strong>on</strong>ciled m<strong>on</strong>thly with <strong>the</strong><br />

“official” c<strong>on</strong>signment c<strong>on</strong>tracts.<br />

Using our current system <str<strong>on</strong>g>an</str<strong>on</strong>g>d processes, <strong>Mayo</strong> has been able<br />

to obtain accurate data <strong>on</strong> impl<str<strong>on</strong>g>an</str<strong>on</strong>g>t <str<strong>on</strong>g>an</str<strong>on</strong>g>d supply use in <strong>the</strong><br />

OR <str<strong>on</strong>g>an</str<strong>on</strong>g>d o<strong>the</strong>r points of care. The data is <strong>the</strong>n used to drive<br />

st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardizati<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d areas of possible expense reducti<strong>on</strong> which<br />

ultimately leads to higher value for our patients.<br />

Informati<strong>on</strong> drives value<br />

By integrating our supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement systems <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

processes with o<strong>the</strong>r critical business <str<strong>on</strong>g>an</str<strong>on</strong>g>d clinical functi<strong>on</strong>s<br />

within <strong>the</strong> hospital, we have come a l<strong>on</strong>g way in terms of driving<br />

efficiencies <str<strong>on</strong>g>an</str<strong>on</strong>g>d gaining insight into our supply use. We are<br />

employing best practices to accomplish <strong>the</strong>se goals, including:<br />

Using very few n<strong>on</strong>-c<strong>on</strong>tract items<br />

Frequently used items, inventory <str<strong>on</strong>g>an</str<strong>on</strong>g>d serially tracked items<br />

(impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts) are all kept <strong>on</strong> <strong>the</strong> ERP Item Master file. N<strong>on</strong>-c<strong>on</strong>tract<br />

supplies c<str<strong>on</strong>g>an</str<strong>on</strong>g> be procured by ei<strong>the</strong>r adding <strong>the</strong> item to <strong>the</strong> file or<br />

ordering as a “special/n<strong>on</strong>-file” item. Special/n<strong>on</strong>-file items are<br />

m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged very closely as are <str<strong>on</strong>g>an</str<strong>on</strong>g>y n<strong>on</strong>-c<strong>on</strong>tracted purchase. Data<br />

regarding <strong>the</strong> use of n<strong>on</strong>-c<strong>on</strong>tract items is collated <str<strong>on</strong>g>an</str<strong>on</strong>g>d reviewed<br />

by a centralized Value Analysis Team for <strong>Mayo</strong>’s hospitals.<br />

When this centralized team sees a particular n<strong>on</strong>-c<strong>on</strong>tract item<br />

ordered multiple times, <strong>the</strong>y move forward in discussi<strong>on</strong>s with<br />

<strong>the</strong> hospital(s) that is ordering <strong>the</strong> n<strong>on</strong>-c<strong>on</strong>tract item to better<br />

underst<str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>the</strong> item, <str<strong>on</strong>g>an</str<strong>on</strong>g>d to evaluate whe<strong>the</strong>r <strong>the</strong> item should<br />

be placed <strong>on</strong> c<strong>on</strong>tract. The committee may also research whe<strong>the</strong>r<br />

<strong>the</strong>re are already acceptable substitute products already under<br />

c<strong>on</strong>tract <str<strong>on</strong>g>an</str<strong>on</strong>g>d used in o<strong>the</strong>r <strong>Mayo</strong> facilities. <strong>Mayo</strong> works very<br />

collaboratively as a team <str<strong>on</strong>g>an</str<strong>on</strong>g>d we are data driven in our decisi<strong>on</strong><br />

making (often using Six Sigma – DMAIC (Define, Measure,<br />

Analyze, Improve, C<strong>on</strong>trol)/Le<str<strong>on</strong>g>an</str<strong>on</strong>g> as our quality/efficiency<br />

framework). We also have been discussing alternative strategies<br />

pertaining to our Item Master Strategy that would fur<strong>the</strong>r close<br />

gaps <str<strong>on</strong>g>an</str<strong>on</strong>g>d enh<str<strong>on</strong>g>an</str<strong>on</strong>g>ce our processes (Called Category M<str<strong>on</strong>g>an</str<strong>on</strong>g>agement,<br />

used in <strong>the</strong> Retail Industry today) but are <strong>on</strong>ly at <strong>the</strong> beginning<br />

stages of scoping <str<strong>on</strong>g>an</str<strong>on</strong>g>d designing.<br />

Ensuring <strong>the</strong> accuracy of preference cards<br />

With accurate preference cards, <strong>the</strong> correct items are pulled<br />

from inventory up-fr<strong>on</strong>t, items are not wasted, <str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>the</strong>re is little<br />

rework <strong>on</strong> <strong>the</strong> part of those doing <strong>the</strong> stocking in returning items<br />

to <strong>the</strong> stock room. This level of preference card accuracy has<br />

been achieved through multiple avenues.<br />

• There is a team leader for each service’s preference cards at<br />

each hospital. OR nurses maintain electr<strong>on</strong>ic communicati<strong>on</strong><br />

with <strong>the</strong> team leader, so that items which are incorrectly “<strong>on</strong>”<br />

or “not <strong>on</strong>” <strong>the</strong> preference card are easily communicated to<br />

<strong>the</strong> Team Leader for updating.<br />

• As supplies are pulled for a given case, <strong>the</strong>y are put into a<br />

“pending” mode electr<strong>on</strong>ically. The case cart goes into OR. As<br />

OR staff opens supplies <strong>the</strong>y increment inventory if <strong>the</strong>y are<br />

not going to use something <str<strong>on</strong>g>an</str<strong>on</strong>g>d decrement inventory if <strong>the</strong>y<br />

add something. All supplies decremented <str<strong>on</strong>g>an</str<strong>on</strong>g>d incremented<br />

are d<strong>on</strong>e via barcode sc<str<strong>on</strong>g>an</str<strong>on</strong>g>ning. Both <strong>the</strong>se tasks are<br />

completed before <strong>the</strong> items used during a surgical procedure<br />

are “finalized” <str<strong>on</strong>g>an</str<strong>on</strong>g>d sent to <strong>the</strong> ERP central back office system.<br />

Once <strong>the</strong> supplies/impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts used are finalized, <strong>the</strong> impl<str<strong>on</strong>g>an</str<strong>on</strong>g>t<br />

informati<strong>on</strong> is entered into <strong>the</strong> patient’s electr<strong>on</strong>ic medical<br />

record as well.<br />

• As <strong>the</strong> patient records are being finalized a small subgroup<br />

that reads surge<strong>on</strong> dictati<strong>on</strong>s <str<strong>on</strong>g>an</str<strong>on</strong>g>d checks dictati<strong>on</strong>s against<br />

supplies/impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts entered into <strong>the</strong> electr<strong>on</strong>ic medical record<br />

as used. For example, if <strong>the</strong> dictati<strong>on</strong> shows that hernia with<br />

mesh procedure was d<strong>on</strong>e, mesh shows up in <strong>the</strong> “used”<br />

supply/impl<str<strong>on</strong>g>an</str<strong>on</strong>g>t area.<br />

M<str<strong>on</strong>g>an</str<strong>on</strong>g>aging point-of-care restocking processes to allow<br />

for “right item, timely availability”<br />

Restocking m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement is a process that eliminates<br />

overstocking <str<strong>on</strong>g>an</str<strong>on</strong>g>d potential expirati<strong>on</strong> of supplies. It requires<br />

buy-in <strong>on</strong> <strong>the</strong> part of <strong>the</strong> nurses for rigorous documentati<strong>on</strong><br />

of supplies, because if nurses do not sc<str<strong>on</strong>g>an</str<strong>on</strong>g> added supplies, <strong>the</strong><br />

computer system does not know <strong>the</strong> item needs to be reordered.<br />

The point of use SIMS system is a real-time system that<br />

feeds <strong>the</strong> central ERP system. The central ERP system is a batch<br />

system, which <strong>the</strong>n replenishes supplies when items are noted<br />

to have dropped below a PAR level (<strong>the</strong> previously determined<br />

order point). Cycle counts are d<strong>on</strong>e regularly <str<strong>on</strong>g>an</str<strong>on</strong>g>d back-orders are<br />

m<strong>on</strong>itored <str<strong>on</strong>g>an</str<strong>on</strong>g>d m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged daily.<br />

Collaborating with physici<str<strong>on</strong>g>an</str<strong>on</strong>g>s to reduce <strong>on</strong>e-shot, n<strong>on</strong>c<strong>on</strong>tract<br />

item ordering<br />

With input from key <strong>Mayo</strong> physici<str<strong>on</strong>g>an</str<strong>on</strong>g> groups, <strong>Mayo</strong>’s Supply Chain<br />

M<str<strong>on</strong>g>an</str<strong>on</strong>g>agement <str<strong>on</strong>g>an</str<strong>on</strong>g>d Clinical workgroups ga<strong>the</strong>r <str<strong>on</strong>g>an</str<strong>on</strong>g>d collate data<br />

about c<strong>on</strong>tract/n<strong>on</strong>-c<strong>on</strong>tract use of impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts <str<strong>on</strong>g>an</str<strong>on</strong>g>d supplies <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

report <strong>the</strong> findings back to physici<str<strong>on</strong>g>an</str<strong>on</strong>g>s. This process allows <strong>the</strong><br />

physici<str<strong>on</strong>g>an</str<strong>on</strong>g>s to drive toward c<strong>on</strong>solidati<strong>on</strong> of use for both impl<str<strong>on</strong>g>an</str<strong>on</strong>g>ts<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d supplies. Physici<str<strong>on</strong>g>an</str<strong>on</strong>g>s are interested in providing high quality<br />

care for <strong>the</strong> best price for <strong>the</strong> patients <str<strong>on</strong>g>an</str<strong>on</strong>g>d so engage in this work<br />

readily. Our Fin<str<strong>on</strong>g>an</str<strong>on</strong>g>ce department also collates “cost per case” data<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d presents this to <strong>the</strong> physici<str<strong>on</strong>g>an</str<strong>on</strong>g> groups as well.<br />

Ensuring that rebates are captured<br />

<strong>Mayo</strong>’s c<strong>on</strong>tract m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement staff enters supply c<strong>on</strong>tracts<br />

into a centrally housed <str<strong>on</strong>g>an</str<strong>on</strong>g>d m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged database. Any c<strong>on</strong>tracts<br />

with rebate features are set up with a receivable based <strong>on</strong> <strong>the</strong><br />

payment schedule <str<strong>on</strong>g>an</str<strong>on</strong>g>d assumed amount (based <strong>on</strong> projecti<strong>on</strong>s).<br />

The receivable is <strong>the</strong>n m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged closely like <str<strong>on</strong>g>an</str<strong>on</strong>g>y o<strong>the</strong>r signific<str<strong>on</strong>g>an</str<strong>on</strong>g>t<br />

receivable. Disputes are h<str<strong>on</strong>g>an</str<strong>on</strong>g>dled through <strong>the</strong> c<strong>on</strong>tracting team if<br />

<strong>the</strong>re are issues or delinquent payments.<br />

Ensuring billing is accurate <str<strong>on</strong>g>an</str<strong>on</strong>g>d complete.<br />

Cost ch<str<strong>on</strong>g>an</str<strong>on</strong>g>ges are electr<strong>on</strong>ically updated as received <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

authorized into <strong>the</strong> ERP central files at <strong>Mayo</strong>. We closely m<str<strong>on</strong>g>an</str<strong>on</strong>g>age<br />

2010/2011 <strong>GS1</strong> Healthcare Reference Book


<str<strong>on</strong>g>Keeping</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>eye</str<strong>on</strong>g> <strong>on</strong> <strong>the</strong> <strong>big</strong> <strong>picture</strong>:<br />

<strong>Mayo</strong> Clinic’s <strong>integrated</strong> supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

initiatives forward. While suppliers are not denied access to <strong>Mayo</strong><br />

if <strong>the</strong>y are not <strong>GS1</strong> st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards compli<str<strong>on</strong>g>an</str<strong>on</strong>g>t, we are requesting that<br />

our supplier partners c<strong>on</strong>vert <strong>the</strong>ir ascribed account numbers<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d product descripti<strong>on</strong>s to <strong>the</strong> <strong>GS1</strong> GTIN <str<strong>on</strong>g>an</str<strong>on</strong>g>d GLN st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards<br />

c<strong>on</strong>sistent with 2010 GLN Sunrise <str<strong>on</strong>g>an</str<strong>on</strong>g>d 2012 GTIN Sunrise dates.<br />

<strong>Mayo</strong> Clinic c<strong>on</strong>siders our suppliers as partners <str<strong>on</strong>g>an</str<strong>on</strong>g>d we work<br />

collaboratively with <strong>the</strong>m. However, at some point in <strong>the</strong> future<br />

we may need to take str<strong>on</strong>ger acti<strong>on</strong>s due to ei<strong>the</strong>r regulati<strong>on</strong>,<br />

safety or cost c<strong>on</strong>cerns (or all three).<br />

pricing, <str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>on</strong>ly accept <strong>the</strong> price if it is within our terms <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

c<strong>on</strong>diti<strong>on</strong>s (we hold pricing firm for <strong>the</strong> term or allow for updates<br />

<strong>on</strong> a defined calendar). SIMS as well as our Billing System is fed<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>y applicable updates <str<strong>on</strong>g>an</str<strong>on</strong>g>d accepted “as is” from <strong>the</strong> ERP. The<br />

<strong>on</strong>ly thing <strong>the</strong> barcode is used for is to identify <strong>the</strong> item. The rest<br />

of <strong>the</strong> informati<strong>on</strong> about that item is kept in <strong>the</strong> item master<br />

file. The ERP 3-way (purchase order, receipt <str<strong>on</strong>g>an</str<strong>on</strong>g>d invoice) match<br />

ensures payment accuracy. The ERP c<str<strong>on</strong>g>an</str<strong>on</strong>g> h<str<strong>on</strong>g>an</str<strong>on</strong>g>dle site specific<br />

prices for <strong>the</strong> same item (although our goal is to have <strong>on</strong>e price<br />

for <strong>the</strong> enterprise).<br />

Support of suppliers paramount<br />

Like o<strong>the</strong>r hospitals in <strong>the</strong> U.S., <strong>Mayo</strong> uses thous<str<strong>on</strong>g>an</str<strong>on</strong>g>ds of supplies<br />

from thous<str<strong>on</strong>g>an</str<strong>on</strong>g>ds of m<str<strong>on</strong>g>an</str<strong>on</strong>g>ufacturer partners. While m<str<strong>on</strong>g>an</str<strong>on</strong>g>y of <strong>the</strong><br />

supplies come through a distributor m<str<strong>on</strong>g>an</str<strong>on</strong>g>y also come through<br />

direct relati<strong>on</strong>ships with <strong>the</strong> m<str<strong>on</strong>g>an</str<strong>on</strong>g>ufacturer. As we strive for<br />

ultimate efficiency in our supply chain, we recognize that <strong>the</strong><br />

journey is more of a marath<strong>on</strong> th<str<strong>on</strong>g>an</str<strong>on</strong>g> a sprint, <str<strong>on</strong>g>an</str<strong>on</strong>g>d as such, we<br />

need <strong>the</strong> complete support <str<strong>on</strong>g>an</str<strong>on</strong>g>d partnership of our vendors. Key<br />

developments in <strong>the</strong>se relati<strong>on</strong>ships include:<br />

Vendor c<strong>on</strong>trol<br />

To m<str<strong>on</strong>g>an</str<strong>on</strong>g>age which vendor may be permitted in a surgical suite,<br />

we are using a vendor registrati<strong>on</strong> system. All vendors must<br />

go through <strong>the</strong> OR nurse m<str<strong>on</strong>g>an</str<strong>on</strong>g>ager before <strong>the</strong>y are allowed in<br />

<strong>the</strong> surgical suite. The vendor <str<strong>on</strong>g>an</str<strong>on</strong>g>d surge<strong>on</strong> use products that<br />

are identified <strong>on</strong> <strong>the</strong> surge<strong>on</strong> case request before surgery. If<br />

<strong>the</strong> surge<strong>on</strong> w<str<strong>on</strong>g>an</str<strong>on</strong>g>ts to use a new product, <strong>the</strong> surge<strong>on</strong> formally<br />

requests <strong>the</strong> “new” item through <strong>the</strong> OR M<str<strong>on</strong>g>an</str<strong>on</strong>g>ager. Compli<str<strong>on</strong>g>an</str<strong>on</strong>g>ce<br />

is m<str<strong>on</strong>g>an</str<strong>on</strong>g>aged through reporting <str<strong>on</strong>g>an</str<strong>on</strong>g>d basic compli<str<strong>on</strong>g>an</str<strong>on</strong>g>ce m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

protocol.<br />

Data st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards<br />

<strong>Mayo</strong> Clinic is <strong>on</strong> <strong>the</strong> Leadership Team of <strong>GS1</strong> Healthcare US to<br />

assist <strong>the</strong> healthcare industry in st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardizing our numbering<br />

system with <strong>the</strong> <strong>GS1</strong> System of st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards. We are working with<br />

<strong>the</strong> U.S. Food <str<strong>on</strong>g>an</str<strong>on</strong>g>d Drug Administrati<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>GS1</strong> US to move<br />

<strong>Mayo</strong> Clinic is asking suppliers to st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardize first for<br />

locati<strong>on</strong>s (GLN) (see <strong>Mayo</strong> Clinic/Cardinal Health case study<br />

summary in this article). Under this system <strong>Mayo</strong> will do all<br />

c<strong>on</strong>tracting <str<strong>on</strong>g>an</str<strong>on</strong>g>d purchasing through <strong>the</strong> st<str<strong>on</strong>g>an</str<strong>on</strong>g>dard facility<br />

identifiers (<strong>on</strong>e set of identifiers at <strong>the</strong> <strong>Mayo</strong> Ship to level)<br />

as opposed to each supplier providing account numbers<br />

representing <strong>the</strong> supplier’s unique view of <strong>Mayo</strong> locati<strong>on</strong>s.<br />

Later, we will ask vendors to st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardize by having a unique<br />

product identifier for each product, using <strong>the</strong> GTIN, as well as<br />

c<strong>on</strong>tributing product data to a comm<strong>on</strong> registry in a shared data<br />

utility via <strong>the</strong> GDSN (see Figure 1).<br />

Figure 1: <strong>GS1</strong> st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards included in <strong>the</strong> U.S. Healthcare<br />

Industry Sunrise Dates<br />

The foundati<strong>on</strong>al st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards of <strong>the</strong> <strong>GS1</strong> System:<br />

Global Trade Item Number® (GTIN)® – a 14-digit code<br />

assigned to each individual m<str<strong>on</strong>g>an</str<strong>on</strong>g>ufactured product as well<br />

as to each different packaging c<strong>on</strong>figurati<strong>on</strong><br />

Global Locati<strong>on</strong> Number (GLN) – a 13-digit code used<br />

to uniquely identify healthcare supplier <str<strong>on</strong>g>an</str<strong>on</strong>g>d provider<br />

locati<strong>on</strong>s<br />

Global Data Synchr<strong>on</strong>izati<strong>on</strong> Network® (GDSN®)<br />

– a network of certified data pools enabling <strong>the</strong><br />

st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardizati<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d synchr<strong>on</strong>izati<strong>on</strong> of supply chain<br />

product data between trading partners<br />

C<strong>on</strong>clusi<strong>on</strong>: benefits come into view<br />

Open communicati<strong>on</strong> lines, both internally <str<strong>on</strong>g>an</str<strong>on</strong>g>d externally,<br />

have helped to ensure smooth integrati<strong>on</strong> of our systems <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

processes al<strong>on</strong>g our 10-year journey. <strong>Mayo</strong> has participated in<br />

industry initiatives to better educate ourselves <str<strong>on</strong>g>an</str<strong>on</strong>g>d to share our<br />

insights with o<strong>the</strong>rs. We’ve recruited partners that share our<br />

visi<strong>on</strong> of a better way of doing things, <str<strong>on</strong>g>an</str<strong>on</strong>g>d we have selected<br />

suppliers who have a proven track record working with us<br />

collaboratively. Executive leadership is also import<str<strong>on</strong>g>an</str<strong>on</strong>g>t in terms of<br />

prioritizing <strong>the</strong> multiple <str<strong>on</strong>g>an</str<strong>on</strong>g>d sometimes competing healthcare<br />

IT initiatives <str<strong>on</strong>g>an</str<strong>on</strong>g>d providing resources <str<strong>on</strong>g>an</str<strong>on</strong>g>d support across supply<br />

chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement at <strong>Mayo</strong>.<br />

2010/2011 <strong>GS1</strong> Healthcare Reference Book


<str<strong>on</strong>g>Keeping</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>eye</str<strong>on</strong>g> <strong>on</strong> <strong>the</strong> <strong>big</strong> <strong>picture</strong>:<br />

<strong>Mayo</strong> Clinic’s <strong>integrated</strong> supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

Based <strong>on</strong> our experiences to date we are c<strong>on</strong>fident <strong>the</strong> rewards<br />

of st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards adopti<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d complete supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

systems integrati<strong>on</strong> will be realized industry wide. Org<str<strong>on</strong>g>an</str<strong>on</strong>g>izati<strong>on</strong>s<br />

that go through this process will learn <strong>the</strong> skills needed<br />

to excel in <strong>the</strong> healthcare industry of <strong>the</strong> future, including<br />

unprecedented collaborati<strong>on</strong>, systems thinking utilizati<strong>on</strong> of<br />

high quality informati<strong>on</strong>, innovati<strong>on</strong>, improvement <str<strong>on</strong>g>an</str<strong>on</strong>g>d ch<str<strong>on</strong>g>an</str<strong>on</strong>g>ge<br />

m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement. <str<strong>on</strong>g>Keeping</str<strong>on</strong>g> <str<strong>on</strong>g>an</str<strong>on</strong>g> <str<strong>on</strong>g>eye</str<strong>on</strong>g> <strong>on</strong> this <strong>big</strong> <strong>picture</strong> c<str<strong>on</strong>g>an</str<strong>on</strong>g> serve as a<br />

powerful motivator to get through implementati<strong>on</strong> challenges.<br />

<strong>Mayo</strong> Clinic has automated much of <strong>the</strong> Supply Chain <str<strong>on</strong>g>an</str<strong>on</strong>g>d <strong>the</strong><br />

results are unquesti<strong>on</strong>able. Over <strong>the</strong> past 10 years, our IDN has<br />

achieved documented Supply Chain savings approaching half<br />

a billi<strong>on</strong> dollars all while reducing staffing levels <str<strong>on</strong>g>an</str<strong>on</strong>g>d achieving<br />

charge capture improvements. What is really exciting is what is<br />

to come. The systems are not fully developed, processes have not<br />

been fully optimized <str<strong>on</strong>g>an</str<strong>on</strong>g>d implementati<strong>on</strong> of data st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards has<br />

just begun. The next 10 years represent a huge opportunity as<br />

opposed to a healthcare crisis. <strong>Mayo</strong> Clinic remains steadfast in<br />

its commitment to <strong>the</strong>ir patients where “<strong>the</strong> needs of <strong>the</strong> patient<br />

always come first”.<br />

About <strong>Mayo</strong><br />

<strong>Mayo</strong> Clinic is a not-for-profit medical practice dedicated to<br />

<strong>the</strong> diagnosis <str<strong>on</strong>g>an</str<strong>on</strong>g>d treatment of virtually every type of complex<br />

illness. The needs of <strong>the</strong> patient come first. A patient will see as<br />

m<str<strong>on</strong>g>an</str<strong>on</strong>g>y doctors, specialists <str<strong>on</strong>g>an</str<strong>on</strong>g>d o<strong>the</strong>r health care professi<strong>on</strong>als as<br />

needed to provide comprehensive diagnosis, underst<str<strong>on</strong>g>an</str<strong>on</strong>g>dable<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>swers <str<strong>on</strong>g>an</str<strong>on</strong>g>d effective treatment.<br />

About <strong>the</strong> Author<br />

Joe Dudas is Director of Accounting <str<strong>on</strong>g>an</str<strong>on</strong>g>d Supply Chain<br />

Informatics at <strong>the</strong> <strong>Mayo</strong> Clinic, where he is resp<strong>on</strong>sible for<br />

implementing <str<strong>on</strong>g>an</str<strong>on</strong>g>d optimizing technology <str<strong>on</strong>g>an</str<strong>on</strong>g>d business<br />

best practices. He leads forums across <strong>Mayo</strong> org<str<strong>on</strong>g>an</str<strong>on</strong>g>izati<strong>on</strong>s<br />

to drive strategic supply chain, accounting <str<strong>on</strong>g>an</str<strong>on</strong>g>d research IT<br />

directi<strong>on</strong>, st<str<strong>on</strong>g>an</str<strong>on</strong>g>dardizati<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d best practices.<br />

Mr. Dudas is currently a member of <strong>the</strong> <strong>GS1</strong> Healthcare US<br />

leadership team. He participates in m<str<strong>on</strong>g>an</str<strong>on</strong>g>y o<strong>the</strong>r industry<br />

efforts to improve <strong>the</strong> healthcare supply chain. Mr.<br />

Dudas brings more th<str<strong>on</strong>g>an</str<strong>on</strong>g> 20 years of informati<strong>on</strong> systems<br />

experience in IT outsourcing, telecommunicati<strong>on</strong>s, retail<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d healthcare.<br />

C<strong>on</strong>tributors to <strong>the</strong> article included Tom Loukes, Surgical<br />

Process Analyst, <str<strong>on</strong>g>an</str<strong>on</strong>g>d D<strong>on</strong>ada Reimer, RN, BSN, SCM Clinical<br />

Support Services M<str<strong>on</strong>g>an</str<strong>on</strong>g>ager<br />

<strong>Mayo</strong> Clinic <str<strong>on</strong>g>an</str<strong>on</strong>g>d Cardinal Health partner<br />

to implement GLNs for patient safety <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

supply chain efficiency<br />

In <strong>the</strong> past <strong>the</strong>re have been numerous discussi<strong>on</strong>s about<br />

<strong>the</strong> value of st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards, <str<strong>on</strong>g>an</str<strong>on</strong>g>d which st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards to use in <strong>the</strong><br />

healthcare industry. Today, <strong>the</strong> discussi<strong>on</strong> has shifted to how<br />

to implement st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards, <strong>the</strong> first steps to take, <str<strong>on</strong>g>an</str<strong>on</strong>g>d timing.<br />

M<str<strong>on</strong>g>an</str<strong>on</strong>g>y of <strong>the</strong> healthcare industry’s supply chain partners,<br />

including <strong>Mayo</strong> Clinic, have voluntarily established <strong>the</strong> end<br />

of 2010 as <strong>the</strong> date by which <strong>the</strong>y will adopt <strong>GS1</strong> GLNs to<br />

replace custom account numbers in order to reduce costs <str<strong>on</strong>g>an</str<strong>on</strong>g>d<br />

improve patient safety. <strong>Mayo</strong> Clinic firmly believes that supply<br />

chain data st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards will greatly improve healthcare safety<br />

<str<strong>on</strong>g>an</str<strong>on</strong>g>d efficiency, supporting <strong>the</strong>ir primary value that “<strong>the</strong> needs<br />

of patients come first.”<br />

In July 2008, <strong>Mayo</strong> Clinic <str<strong>on</strong>g>an</str<strong>on</strong>g>d Cardinal Health collaborated<br />

to implement <strong>the</strong> <strong>GS1</strong> GLN as <strong>the</strong>ir sole account/locati<strong>on</strong><br />

identifier. Both org<str<strong>on</strong>g>an</str<strong>on</strong>g>izati<strong>on</strong>s agreed that this GLN project<br />

would be <str<strong>on</strong>g>an</str<strong>on</strong>g> innovative first step toward <strong>the</strong> 2010 GLN Sunrise.<br />

Implementati<strong>on</strong> results<br />

<strong>Mayo</strong> Clinic <str<strong>on</strong>g>an</str<strong>on</strong>g>d Cardinal Health are am<strong>on</strong>g <strong>the</strong> first<br />

org<str<strong>on</strong>g>an</str<strong>on</strong>g>izati<strong>on</strong>s in U.S. healthcare to implement GLNs in supply<br />

chain tr<str<strong>on</strong>g>an</str<strong>on</strong>g>sacti<strong>on</strong>s. The results were as follows:<br />

• <strong>Mayo</strong> Clinic c<strong>on</strong>verted 58 custom account numbers to GLNs.<br />

• <strong>Mayo</strong> Clinic was able to c<strong>on</strong>vert approximately 60,000<br />

order lines to <strong>the</strong> GLN in November 2009 – which<br />

accounted for 85% of total EDI orders.<br />

• $8 milli<strong>on</strong> of product was tr<str<strong>on</strong>g>an</str<strong>on</strong>g>sacted with Cardinal Health<br />

using <strong>the</strong> GLN in November 2009, <str<strong>on</strong>g>an</str<strong>on</strong>g>d over $70M of<br />

product was purchased with <strong>the</strong> GLN over <strong>the</strong> course of<br />

<strong>the</strong> 2009 year as a result of this implementati<strong>on</strong>.<br />

Implementati<strong>on</strong> benefits<br />

Price accuracy improves with locati<strong>on</strong> identificati<strong>on</strong> accuracy.<br />

Locati<strong>on</strong> identificati<strong>on</strong> errors c<str<strong>on</strong>g>an</str<strong>on</strong>g> cause loss of discount<br />

eligibility as well as tier qualificati<strong>on</strong> <str<strong>on</strong>g>an</str<strong>on</strong>g>d rebate disputes.<br />

Price accuracy for <strong>Mayo</strong> Clinic <str<strong>on</strong>g>an</str<strong>on</strong>g>d Cardinal Health is currently<br />

99.5%, whereas <strong>the</strong> average supplier accuracy is 95%.<br />

Superior price accuracy is attributed to not <strong>on</strong>ly GLN, but also<br />

to <strong>the</strong> commitment that both org<str<strong>on</strong>g>an</str<strong>on</strong>g>izati<strong>on</strong>s make to price<br />

integrity <str<strong>on</strong>g>an</str<strong>on</strong>g>d associated improvement efforts.<br />

The use of GLNs improves supply chain m<str<strong>on</strong>g>an</str<strong>on</strong>g>agement<br />

perform<str<strong>on</strong>g>an</str<strong>on</strong>g>ce, <str<strong>on</strong>g>an</str<strong>on</strong>g>d GLNs used in c<strong>on</strong>juncti<strong>on</strong> with o<strong>the</strong>r <strong>GS1</strong><br />

st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards promise even greater perform<str<strong>on</strong>g>an</str<strong>on</strong>g>ce. Similarly, <strong>the</strong><br />

more supply chain partners that adopt <strong>GS1</strong> st<str<strong>on</strong>g>an</str<strong>on</strong>g>dards, <strong>the</strong><br />

greater <strong>the</strong> benefits for <strong>the</strong> entire industry.<br />

Visit www.gs1us.org/healthcare to read <strong>the</strong> full case study.<br />

2010/2011 <strong>GS1</strong> Healthcare Reference Book

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