Hospitals should first turn to their item master when looking to improve data management within their supply chain, according to Christopher O'Connor, author of The Healthcare Supply Chain: Best Practices for Operating at the Intersection of Cost, Quality, and Outcomes, and the book's expert contributors from Acurity and Nexera.
"The data stored in the item master is the foundation for everything involved in supply chain management," Mr. O'Connor and the contributors wrote in the book. "From placing and managing orders to compiling reports and analytics to pricing, contracting, inventory, and controlling spend, the accuracy of the data within the item master determines the effectiveness of the supply chain."
They shared the following insights on streamlining item masters in the book.
1. Create a process for entering additions to the item master. The way in which the item master is amended is vitally important for controlling expenses. Limit the number of staff members who have the authority to modify the item master, and ensure that those who have authority are continuously trained and cognizant of the organization's nomenclature for product fields. Create an approval hierarchy for all item master changes. This policy should be communicated to medical staff and C-suite executives to make certain that all requests for supplies go through purchasing. Include key data fields for each entry in the item master. This will help identify the item so that the correct one is ordered.
2. Limit the use of non-catalog items and special requests. Purchases that are not included in the item master are typically one-time purchases and called non-catalog items or special orders/requests. Examples include purchased services, capital equipment, maintenance and some physician preference items. As these items are not in the item master, this often creates an inability to aggregate the data necessary to gain maximum benefit from supply chain analytics. When looking at cost-saving opportunities, these items can skew or impact a hospital's decisions, as the information needed is not always available to prepare accurate analyses. Supply chain departments must rely on manual data manipulation in order to compile the item master data with the non-catalog items to fully understand their purchasing power and physician use patterns. It is best practice to limit non-catalog items and special requests.
3. Always check item master information before entering. Though time-consuming at the front end, checking the information that is entered into the item master helps to ensure that you are working with accurate data. Ask vendors and manufacturers to send a current item file based on their hospital's use that includes full item detail (such as unit of measure, pricing, etc.). Keep in mind, however, that neither vendors nor manufacturers always provide the right information. Similarly, a contract may list a product using a series of numbers separated by dashes. But when the same item number is entered into the vendor's electronic data interchange system, the dashes are not recognized and the order is rejected. Validating this information as part of the entry process can prevent delays down the line. Ideally, this process is automated.
4. Create a process for maintaining a clean item master. Supply chain should assign someone (or several people) with extensive product knowledge to review and update the item master on a regular basis using the defined entry procedures. This individual can also review the item master against the hospital's PO history to remove items that are not used by the hospital for a specific, agreed upon time frame (e.g., 24 months) to keep it organized and up-to-date. These responsibilities can also be outsourced. After making any mass update, run an item master extract to confirm that changes have been completed correctly. To maintain a useful, accurate item master, supply chain staff must also create a process for monitoring contract expirations. An established procedure helps ensure the contract for a heavily used item is renewed ahead of time. Conversely, it can help catch an order being placed for an item whose contract has recently expired.
If you would like to submit a supply chain tip of the day, please contact Mackenzie Bean at mbean@beckershealthcare.com.