November 02, 2015 Industry news
A view from Sara Ford – Managing Director at Accenture, Healthcare
What do healthcare and the automotive industry have in common? They both have huge amounts of inventory moving through the value chain. The automotive industry has set the pace in terms of parts tracking, with just-in-time systems enabling optimised tracking and delivery to improve production and lower cost. Arguably, direct human health risks make inventory control even more important to healthcare than it is to the motor manufacturer. And yet healthcare mostly manages procurement and inventory using manual systems and spreadsheets. Inefficient processes lead to higher service costs and lower quality health outcomes.
Times are changing. The May 2014 publication of the Department of Health’s eProcurement Strategy mandates the adoption of GS1[1] identification standards and PEPPOL[2] transaction messaging standards throughout the NHS. GS1 will revolutionise healthcare in the UK by enabling more robust patient safety controls, greater data visibility and more efficient and productive processes.
It is common knowledge that medical equipment, medications and consumables are not consistently tracked. However, they represent a large expense, and bring significant budgetary and health risks: frequent disposal of obsolete medication, potential use of expired drugs, inability to compare value for money between Trusts, and an inability to locate stock when required (a serious risk to patients when products are subject to a safety recall, and to budgets in terms of higher-than-necessary stock loss). Adopting GS1 standards would bring about a number of key benefits[3]:
- Savings of up to ten percent in spend on wards and theatres, with limited materials management services, by preventing wastage and obsolescence
- A stock reduction of up to five percent in wards and theatres
- Reduction of nurses’ administrative burden, releasing the equivalent of five to twenty full time Band 5 Nurses per trust, to care for patients
Time for a healthcare inventory engine overhaul, keeping in mind three key success factors:
- Strong trust-wide engagement at all levels
- Strong support for GS1 from clinicians
- Robust change management structure
The financial benefits are self-evident, and the patient safety benefits, non-negotiable.
[1] GS1 is an international not-for-profit organisation with 112 Member Organisations operating across 150 countries. The GS1 vision is to provide a common language for companies when it comes to identifying people, locations, items and documents, capturing information at the point of interaction and sharing data throughout the procurement process/supply chain from the supplier to point of care/point of use
[2] PEPPOL (Pan European Public Procurement On Line) is a common messaging standard to automate machine-to-machine purchase orders and invoice transactions between customers and suppliers through designated ‘access points’
[3] Based on Accenture estimates following work with four NHS Trusts