Reducing Stock-Outs in MD Anderson Cancer Center’s
Outpatient Clinics
David Bivens, Caitlin Byler, Rachel Douglas, & Kaycee Wilson
Speaker: Kaycee Wilson, Quality Engineer
Supply Availability Project Teams
Steering
Committee
Office of Performance
Improvement
Materials Management
Melanoma & Skin
Center
Susan Ferguson
David Bivens
Antonio Odems
Mimi Brooks
Cynthia Powers
Rachel Douglas
Pete Verdone
Oguna Taylor
Jeremy Viles
Kaycee Wilson
John Morgan
Cynarra Osborn
Byron Main
Caitlin Byler
Travis King
Oletha Jones
Carl Crofton
Rosa Rodriguez
Jimmy Sherman
Current Inventory Management Process
Clinic Close
1
Collect Supplies from
Staging Area
Clinic Open
Note: Items Received
were Ordered Night
Before
2
5
Deliver Supplies to
each Par and
Restock
Supplies are Used
Note: Those orders
arrive the next
evening
4
Reorder Par less
inventory on hand
by putting the count
left in the bin in the
handheld.
3
Identify Supplies
that need to be
Reordered
New Supply Process Objectives
Quantitative Objectives
• Minimize: Stock-outs ( Patients Denied Care )
Subject to:
• Available Space
• Available Labor
• Inventory Cost
Qualitative Objectives
• Ease of Use
• Ease of Implementation
• Ease of Sustainment
Process Observation and Analysis
• Four inventory process areas were identified for
improvement efforts
•
•
•
•
Level Setting
Reorder Signal
Reorder Quantity
Business Roles
Baseline Analysis
• Level Setting
Pilot Solution Level Setting
• There are two numbers important for level setting
• Reorder Point
• Based on a one day delay between order and actual delivery
• Calculated with historical ordering data by material reps
• Calculated based on items pulled from the warehouse
• Derived using statistical analysis yielding stock-out risk
• PAR Level
• Based on current workload
1. PAR Level
2. Reorder Point
Baseline Analysis
• Reorder Signaling
Pilot Solution for Reorder Signaling
Baseline Analysis
• Order Quantities
The materials rep will have to put
the number remaining in the bin in
the handheld.
Pilot Solution Order Quantities
• Always order the same amount
Always order about ½ bin size
Baseline Analysis
• Business Roles
• Materials Management
• Responsible for responding to clinic requests for par changes
• Responsible for order and delivery of supplies
• Clinics
• Responsible for setting the inventory level of each item
Daily Clinic Usage
1
Pull the card when the supply
level is at or below the tapeline
Place the card in the low stock bin
1
Low Stock
Pull the card
when you use
the item
1
Nightly Replenishment
2
2
Deliver
supplies &
make sure that
the waterline
holds the
“reorder point”
quantity
7
Put all cards
in the
ordered bin
back on
delivered
item bins
3
4
Pull out all of
the cards in
the “low
stock” bin
Scan the barcode on the back
of the card and enter the
handheld # in handheld. If
you have to pull the quantity
from the warehouse, pull the
warehouse # amount
! Note
Place scanned cards in the
“ordered” bin
Pilot Resupply Process and Business Roles
Back of Card
PAR Setup Process and Business Roles
3
Materials Management Team
Clinical Team
Approve/Disapprove
suggested removal of items
1
2
Reset levels
8
Create Stock
Cards
Request
approval for
removal of low
usage items
from Par (Red
Tagging)
4
Put in
waterlines
and adjust
preset levels
7
5
Reorganize closet with
nursing feedback
6
Relabel
Reset Par in
handhelds
**Blue boxes represent steps requiring tool created by OPI
P59 Melanoma and Skin Center Baseline
P59 Melanoma and Skin Center Pilot Setup
Tapeline Setting & Fixed Ordering Methodology
• (R,s,Q) Model
Undershoot
Risk period
Figure 1. Illustration of undershoot in an (𝑹, 𝒔, 𝑸) model where 𝒔 = 𝑸, 𝑹 = 𝟏, 𝒂𝒏𝒅 𝑳 = 𝟏.
Tapeline Setting & Fixed Ordering Methodology
• Reorder Point
99.7%
95%
Area that supply usage is less than
average
Stock-out
area
68%
Tapeline Setting & Fixed Ordering Methodology
• Undershoot **
𝜇𝑢𝑛𝑑𝑒𝑟𝑠ℎ𝑜𝑜𝑡
2
𝜇𝑟𝑒𝑣𝑖𝑒𝑤
2𝜇𝑟𝑒𝑣𝑖𝑒𝑤
−
• Fixed Order Quantity
𝑄
𝑆 − 𝑠 + 𝜇𝑢𝑛𝑑𝑒𝑟𝑠ℎ𝑜𝑜𝑡
**See References Slide
1
2
Reorder Point Setting & Fixed Ordering Simulation
Stock Card Template
Summary of Assumptions
• Objective – stock-out minimization
• Carry a minimum of two days on hand
• Constraints – labor, space, and budget
• Increase the days on hand to meet labor standards
• Distribution of daily demand - normal
• Set reorder points according to a normal distribution
• Daily supply usage
• Estimate daily demand using work days between
ordering instances
Pilot Issues
Future Work
• Pedi – Child & Adolescent Center
• Cardiopulmonary Center
• Breast Center
• Leukemia Center
• Clinical & Translational Research Center
References
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Chan, F.T.S. 2001. Effect of kanban size on just-in-time manufacturing systems. Journal of Materials Processing Technology,
116: 146-160.
Kumar, C.S. and R. Panneerselvam. 2007. Literature review of JIT-KANBAN system. Int. J. Adv Manuf Technol, 32: 393408.
Bijvank, M. and I. Vis. 2011. Lost-sales inventory theory: A review. European Journal of Operational Research, 215: 1-13.
Johansen, S.G. and R.M. Hill. 2000. The (r,Q) control of a periodic-review inventory system with continuous demand and lost
sales. Int. J. of Production Economics, 68: 279-286.
Bijvank, M. and I. Vis. 2012. Inventory control for point-of-use locations in hospitals. Journal of the Operational Research
Society, 63: 497-510.
Baganha, M.P., D.F. Pyke, and G. Ferrer. 1996. The undershoot of the reorder point: Tests of an approximation. Int. J. of
Production Economics, 45: 311-320.
Silver, E.A., D.F. Pyke, and R. Peterson. 1998. Inventory Management and Production Planning and Scheduling. 3rd Edition.
Hoboken, NJ: John Wiley & Sons.