Erlanger Health System Continues Purchasing Process Improvements, Keeps Hospital and Health Facilities Stocked with Vital Supplies While Containing Costs
 
 

Erlanger Health System Continues Purchasing Process Improvements, Keeps Hospital and Health Facilities Stocked with Vital Supplies While Containing Costs

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Erlanger Health System is a nonprofit, academic teaching center affiliated with the University of Tennessee College of Medicine. It is also a Level I Trauma Center for adults and the only provider of tertiary care services for the citizens of a four-state region, encompassing southeast Tennessee, north Georgia, north Alabama and western North Carolina.

With a history that dates back more than a century, Erlanger is recognized as one of the nation’s finest public hospitals and a leader in healthcare. The system, which today is licensed for 819 acute-care beds and 50 long-term care beds, operates five campuses and serves more than 250,000 patents annually.

To deliver a broad spectrum of health services to such a large community, Erlanger requires a complex supply chain. In 2006, the company realized that strengthening its supply chain performance was an opportunity to reduce supply costs and ensure better healthcare delivery. Previously, the supply chain process was heavily reliant on clinicians, whose time could be better spent with patients. Further, purchasing processes were paper-based and required manual data entry, as information passed from nurse managers on the hospital floors to materials staff. To ensure new efficiency, Erlanger automated its replenishment processes using Oracle’s PeopleSoft Supply Chain Planning. With PeopleSoft, Erlanger’s daily supply replenishment went from several hours to less than one hour per day. Further, materials management staff members, rather than nurses, are responsible for performing inventory counts. They use hand-held devices to transmit the counts directly into the PeopleSoft system, eliminating paper records and manual data entry. The system wastes no time, by simultaneously generating a requisition so that, by the time staff completes the scans, the warehouse staff has picked part or all of the orders, and they are ready for delivery. By taking the responsibility for inventory management off its clinicians’ hands, Erlanger has provided more time for direct patient care.

In 2008, Erlanger upgraded to Version 9.0 of Oracle’s PeopleSoft applications and realized numerous cost savings and efficiencies. Since then, the company has continued to expand functionality and streamline processes to increase operational efficiency. For example, it migrated to electronic receipts for major distributors, which saves 3.5 hours per day. The company also relies on PeopleBooks, My Oracle Support, and Oracle Premier Support for Systems as critical resources to help it optimize the benefits of the system, quickly resolve any issues that arise, and handle vital patches and upgrades smoothly, ensuring no interruption in users’ supply orders.

 
 

 
 

Challenges

A word from Erlanger Health System

  • “We continue to gain purchasing process efficiency with Oracle’s PeopleSoft applications, ensuring that our hospital and health facilities have the supplies they need and that our clinicians can spend time caring for patients rather than tracking down supplies.” – Bernadette Dorris, Financial System Manager, Erlanger Health System

  • Reduce the supply procurement burden on clinicians, enabling them to spend more time with patients
  • Extend efficiencies in purchasing and financial management, enabling Erlanger to respond to a growing number of requirements to reduce operational costs while continually improving quality of patient care
  • Expand self-service and paperless processes to reduce costs, add convenience, and promote environmental sustainability
  • Ensure reliable support to keep the systems running efficiently and avoid interruptions that might negatively impact the hospital and health facility operations

Solutions

Oracle Product and Services

  • Deployed Oracle’s PeopleSoft Supply Chain Planning to automate purchasing processes and reduce the burden on clinicians, instead enabling materials management staff to manage much of the supply procurement process
  • Accelerated purchasing requests with scanners linked to PeopleSoft, which automatically generates requisitions and triggers warehouse processing—ensuring that the hospital and health facilities receive supplies in a timely manner
  • Gained visibility into the procurement approval workflow, standardizing purchasing practices to easily monitor budget variances
  • Upgraded to Version 9.0 of Oracle’s PeopleSoft applications to improve efficiency of financial management, procurement, and human resources
  • Implemented an electronic ordering process for surgical supplies, reducing the organizations’ carbon footprint and saving US$2,000 in freight costs in the first month through greater visibility into requirements—with savings continuing to accrue since that time
  • Improved inventory, tracking, and management to save US$15,000 in supply costs within a month of the upgrade, with savings in this area continuing
  • Simplified administration of the company’s online procurement catalog through auto-updating of “favorites” and giving end users the ability to electronically request adding items to the catalog with standardization committee review and workflow approval
  • Provided expanded visibility into the purchasing process, enabling managers to see if a request was previously denied and to enable the flow of pertinent attachments from requisition request through purchase order issuance
  • Transitioned to electronic pay stubs, providing employees with added convenience, reducing paper usage and postage costs, and saving more than US$10,000 annually
  • Provided increased visibility that enables Erlanger to optimize invoice pay cycles
  • Added new functionality with subsequent system improvements, including migrating to electronic receipts for the company’s main distributors, which has cut daily invoice receiving time from four hours to just 30 minutes
  • Reduced the burden on buyers who previously handled 50% of requisitions and now only handle 38% because the other 62% of requisitions are now processed electronically (lights-out)
  • Decreased the number of unnecessary special requests—which required significant time and attention—by redirecting users to the expanded online catalog
  • Freed buyers to spend more time on exception processing and researching stalled invoices, which improves the organization’s financial position and helps staff and clinicians to get supplies faster
  • Leveraged Oracle’s PeopleBooks as a first source of product information when any questions or problems arise, and benefitted from MyOracle Support and Oracle Premier Support for Systems to quickly resolve any issues or to gain information about necessary patches and upgrades

Implementation Process

Already a PeopleSoft Financials user, Erlanger rolled out PeopleSoft Supply Chain Planning in 2006 to reduce the purchasing burden on clinicians. Then, in 2008, Erlanger upgraded its PeopleSoft applications to Version 9.0.

“We’ve gained significant benefits with Oracle’s PeopleSoft 9.0 applications. We’ve improved visibility and operational efficiency, as well as expanded self-service capabilities, all of which resulted in rapid and quantifiable benefits,” said Bernadette Dorris, Financial System Manager, Erlanger Health System.

Since then, the health system has made continuous improvements in its processes and realized additional benefits.

On an ongoing basis, the organization is also benefitting from My Oracle Support and Oracle Premier Support for Systems to quickly resolve any issues and to gain information about necessary patches and upgrades.

“Oracle Premier Support helps maintain our systems by providing us with the technical support expertise we need to focus on our hospital and health services. My Oracle Support gives us access to proactive support and tools, such as critical patches and upgrades,” Dorris said.