Automation yields big savings for Penn. facility's supply chain staff

MEDIA, PA – Change isn’t always welcome, especially at hospitals. Over time, staff become used to the old ways of doing things and aren’t ready to give them up.

That wasn’t the case at Riddle Memorial Hospital, where supply chain staff were quickly won over to the money-saving potential of automation.

The impetus came after Riddle staff visited hospitals in the Main Line Health System, an integrated delivery system that Riddle had recently joined. The Main Line facility uses automation to manage its supply purchasing.

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A reciprocal trip to Riddle found quite a different world. The facility still was using manual processes, and Main Line staff could hear the unmistakable sounds of someone using a typewriter to create purchase orders.

Improving contracting practices and switching group purchasing organizations brought immediate savings to Riddle – on the order of $800,000 over the initial six months, said Chris Torres, vice president of supply chain and materials management for Main Line.

While convincing Riddle to move to an automated system was relatively easy, it has been a difficult process, Torres said. Main Line has used PeopleSoft, now an Oracle product, for several years, but getting Riddle on the system will take some time. The facility will begin using PeopleSoft for data entry on October 1, with full implementation of all the system’s capabilities by July 2009.

“We had to create data sources for them, because all their purchase orders were done on a manual typewriter, so we had to create that data for them,” she said.

Automation won’t solve all of Riddle’s dilemmas, Torres said. Improving workflow will also improve operations in the materials management department, she said.

“What we found at Riddle was that one person did five functions,” she said. “In our world of internal audits and controls, you can’t have the same person buy, receive and approve the purchase order. In the workflow, you need to have a requester, a buyer, a receiver, and the confirmation that it was received has to go to accounts payable.”

PeopleSoft enables that level of internal control to be achieved because individual users have different sign-ons, enabling better tracking of each activity.

Riddle’s affiliation with Main Line is bringing other benefits. For example, moving to standardized selection of certain commodities is enabling them to get bigger discounts, Torres said.