A Makeover at Cleveland Clinic

How a supply chain team is changing the flow of information and products at one of the nation’s largest healthcare systems

Steve Pohlman

What does industrial engineering have to do with supply chain management? Quite a bit.

Sometimes referred to as “optimizers,” industrial engineers enlist natural science, mathematics, computer engineering and other skills in an effort to improve or simplify systems, which could be manufacturing, customer service, supply chain, etc.

They plan, they conduct simulations, they problem-solve. Then they continually educate the people on their roles in those systems.

Steve Pohlman has a degree in industrial engineering (as well as an MBA). Prior to beginning his career in healthcare supply chain in 1997, he worked in manufacturing in the auto and welding industries. Is it any surprise, then, that he is transforming processes at Cleveland Clinic, where he serves as senior director of materials management?

Pohlman and his team are in the midst of changing the flow of information and products at one of the nation’s largest healthcare systems. Cleveland Clinic consists of the main campus in Cleveland (1,400 beds, over 100 operating rooms and 60 buildings), 10 regional hospitals and more than 150 outpatient locations in northern Ohio.

Inventory Management Transformation
The initiative – Inventory Management Transformation (IMT) – revolves around three components: 1) Helping nurses and clinical staff spend more time at the bedside by 2) centralizing supply chain data, inventory and decision-making, so that 3) onsite materials teams can devote their time servicing the needs of the hospital staff. It’s a chain, or circle, of support: A central team provides support to onsite materials teams, who in turn support caregivers at the bedside.

IMT begins with data collection. Cleveland Clinic is implementing RFID technology for implantable devices and high-dollar supplies, and a two-bin Kanban system for higher-volume, lower-dollar items.

“We started with [implantables] because that is where we felt we were at the greatest risk for product expiry and inventory loss,” says Pohlman. At press time, the system was live at five of the health system’s hospitals, with implementation at the main facility expected by the end of summer. “We have been able to greatly reduce the clinical and non-clinical hours spent on expiry checks,” he points out. The system creates a safer environment for patients (zero serious safety events have occurred due to expired supplies), and it gives the sourcing team utilization data to negotiate more effectively with vendors.

Perhaps most important, Pohlman calculates that at press time, 22,000 hours had been repurposed back to the clinical staff to take care of patients instead of manage supplies.

Rollout of the system to all hospitals should be completed by the end of 2019. Already at press time, 70,000 items had been RFID-tagged.

The next phase of IMT will be implementation of a third-party-logistics model for the storage and distribution of implantables and high-dollar items. Rather than asking vendors to ship implantables directly to the hospitals via overnight delivery services, Cleveland Clinic will direct vendors to ship them to its med/surg distributor. There, each item will be RFID-tagged, so Cleveland Clinic’s central materials team can monitor expiry and manage disposition as needed. The items will then be supplied to the facilities on a just-in-time basis.

Center of Excellence
An industrial engineer would never transform a system without creating an infrastructure to support its rollout and sustain the system day after day, year after year. For IMT, that infrastructure rests on the Center of Excellence, or COE.

Comprising 10 project managers, the COE is standardizing how inventory is managed across the enterprise, says Pohlman. That involves replacing seven different inventory systems – which do not interface with each other – with one. That work is being undertaken.

Simultaneously, the COE is redesigning supply chain workflow, training people on it, and developing standard policies and procedures. In the future, the COE will serve as a customer support center for the hospital materials leaders by monitoring inventory levels and utilization, providing expiry scorecards and technical support, and training new employees.

“Our enterprise will likely continue to expand and do construction projects,” says Pohlman. “The goal of the inventory team is to be involved in the design of any space and workflow that involves supply usage early in the process.”

Transforming inventory for an enterprise as large and complex as Cleveland Clinic has been challenging, admits Pohlman. “Each hospital brings its own set of challenges. IMT is clearly not a cookie-cutter approach.”

But the most surprising result thus far is how much the project has strengthened supply chain’s relationship with nursing, he says. As each has gotten to know each other’s processes and needs, trust and cooperation has grown. In fact, after the initial implementation at each facility, “the nurses don’t want us to leave, because we made their job so much easier.

“We learn about their work, and they learn from us. It’s about understanding what we need from each other.”

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