SHILOG, Ltd. is a Healthcare Supply Chain Reengineering firm dedicated to providing technology-based solutions. Since its inception, the firm has worked diligently to evolve enabling technologies such as the Universal Product Number (UPN) and the product classification systems. Hospitals and Health Systems are the primary customers of SHILOG, Ltd. The difficulties in implementing the enabling technologies and strategies outlined in the Efficient Healthcare Consumer Response (EHCR™) study are many. SHILOG, Ltd. specializes in assisting these systems in overcoming these difficulties by exploiting the use of technology based solutions. An eight-step approach has been developed and is being used in multi-hospital systems now that in just a few weeks identifies the opportunities for savings and facilitates the rapid implementation of the needed solutions to take advantage of the savings opportunities and reduce cost throughout the system. These steps are outlined below:

Step One: Supply Cost Analysis. This step identifies all products being purchased over a three-month period of time. The data is collected via a process of photocopying all invoices paid during that period and processing them through the HMS Supplyline™ system. Once processed, the facility can see :

- What they are purchasing

- How much they are paying (including different prices for the same product)

- How many redundant brands of functionally equivalent items are being purchased and by whom.

- How the prices paid compare to the national lowest, average and highest prices paid.

- What items are under contract that are/are not being purchased by the facility.

The data from this step is used later for Stock Keeping Unit (SKU) Rationalization, Data Normalization, Product Standardization and Inventory Reduction processes. The data collection process normally takes 1 week per facility then there is a 5-week processing through HMS.

Step Two: Pre-Inventory Assessment(PIA). During this phase, SHILOG, Ltd. personnel conduct a detailed assessment of the facility to determine the number of inventory locations and the SKU counts for each location. This data is used to develop the plan for the conduct of the Inventory Assessment as well as comparing the facility with other facilities of like size, capability and geography. The PIA normally takes 2.5 to 3 days per facility.

Step Three: MMIS Data Download. By analyzing the data contained in the facility Materials Management Information System, SHILOG, Ltd. can assist the facility in a data cleansing process. This eliminates many errors in product description, unit of issue, quantity in unit of issue, manufacturer name, catalog number, Universal Product Number and other areas. It is a crucial step in normalizing the data and returning it to the customer in a usable manner.

Step Four: Inventory Assessment. A comprehensive top to bottom inventory is conducted using MC&A’s proprietary Inventory Assessment Tool (IAT™). The software allows SHILOG, Ltd. personnel to conduct the inventory of all supply areas, including storage in clinical areas and official storerooms using the manufacturers catalog number or the Universal Product Number (UPN) where available. Use of the facility proprietary Item Number is also a feature not found in other software and can be used either as text or proprietary bar codes. The data collected includes product information such as description, manufacturer identity, product identity, unit of issue, quantity and the location where the material was stored. For the inventory that is considered official, a double-blind inventory process is completed to insure accuracy of the count. Unlike other inventory firms who take the data back to their offices and massage it for days, SHILOG, Ltd. will provide a printed report at the end of the physical inventory of each location. The process is extremely efficient and provides the facility a comprehensive view of its supply dollar position in an easy to read report. The inventories from multiple facilities can be quickly consolidated and a view of the supply position of the entire enterprise assessed quickly, efficiently and accurately.

Step Five: SKU Rationalization. Identifying what products are being used and by what services; determining the redundant brands and identifying total demand by functionally equivalent product. Outcomes produced during this phase include top manufacturers by products purchased and dollar amounts, top products being consumed by quantity and/or dollar value, and the number of locations utilizing each product.

Step Six: Data Normalization. During this phase, the data provided previously from the MMIS will be amended to identify any duplicated products that are being carried in the system; converting non-standard manufacturer names to standard names; converting incorrect units of issue to correct, ANSI standards based identification; incorporating correct quantity in unit of issue and cleanup of product description.

Step Seven: Product Standardization. This phase encompasses the use of the product classification systems and the data collected and rationalized in earlier phases to clearly identify the opportunity for standardization of products across the enterprise. By presenting the data in a business and clinical manner, clinical staff is able to quickly identify which products should be standardized on. SHILOG, Ltd. assists in developing the standardization committee, education of the staff on the technology-based process facilitation of the meetings as well as recording the outcomes of all meetings of the Product Standardization Committee and its sub-committees. This is a streamlined and highly efficient process that results in rapid acceptance of standardized products and substantial financial savings to the Health System.

Step Eight: Inventory Reduction. The final step in the process is to execute Inventory Reductions. This is accomplished by reporting results of the standardization committee and using the data from all the previous phases in identifying where the redundant products are located throughout the enterprise. With the visibility of product enterprise wide, the staff is able to make the conversions to the newly standardized brand quickly and determine the disposition of the non-standardized products. Generally one of several options are available to the system and include

1) return to vendor for a refund

2) continue using the product until all remaining balances are depleted then not reordering

3) transfer of product to facilities that have the product as a standardized item

4) transfer the product to a charitable not-for-profit organization either domestically or internationally. SHILOG, Ltd