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Advancing Supply Chain Best Practices
Thinking Outside the Box
Chip Jackson Senior Director
Oracle Healthcare Industry Business Unit – N. America
Chip.Jackson@Oracle.com
Safe Harbor Statement
The following is intended for information purposes
only, and may not be incorporated into any contract. It
is not a commitment to deliver any material, code, or
functionality, and should not be relied upon in making
purchasing decision. The development, release, and
timing of any features or functionality described for
Oracle’s products remains at the sole discretion of
Oracle.
Agenda
•
•
•
•
•
Today’s Challenges
New Approaches/Strategic Opportunity
Adapting and Accepting for Success
Marriage of Process and Technology
Question and Answer
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Today’s Supply Chain
Challenges
How the Healthcare Supply Chain
Really Works
Healthcare purchasing organizations struggle with waste and
inefficiency and are slow to adopt enabling technology.
Manual
Manual
Invoices
Invoices
&
&
Payments
Payment
s
Suppliers AP
Not Approved
Paper Disbursement Requests
ERP
system
Dept.
Users are frustrated;
search is slow and
cumbersome
ERP
Purchasing
system
Paper
Location
Requisitions
Purchasing
Contract
compliance
eroded by rogue
spending
Automation is
non-existent
Manual
P.O.
Poor data quality;
no data
standardization
Approved
Suppliers
Match exceptions
result in
extensive rework
Opportunity
Answering Supply Chain Managerial Challenges
Reducing Execution Costs
Costs
Customers
• Reduce the cost to train and onboard new hires
• Reduce inventory handling costs
• Reduce overtime required
• Reduce resource idle downtime
Improving Organizational Service
• Provide real time order status visibility
• Provide real time service request status visibility
• Respond to last minute order changes
• Expedite urgent service requests
Managing Exceptions
Exceptions
• Get orders out the door faster to avoid expediting costs
• Respond to last minute order changes without
disruption
• Scale to meet spikes in demand
• Reduce equipment downtime
The Supply Chain Solution Life-Cycle
Highly Automated Facilities
Integrated Warehouse Management
Product / Order Complexity
High
Automate physical inventory handling
Warehouse Management
Integrated Warehouse Management
Implement a true “execution system” using
system directed tasks and task management
RF / Barcode Only
Mobile Supply Chain Applications
Improve accuracy and reduce latency
of existing transactions
Baseline Inventory
Traditional Inventory Management
Manual?
Record transactions and track balances
Low
Small
Transaction Velocity / Volume
Large
Managing For Recovery
What Winners in Last Recession Did Right
Set priorities based on value
creation
• Focused on strategic & sustained
cost management AND value
creation
Leveraged technology
• Invested in systems to manage &
gain insight about key value
drivers
Collaborated with customers to
improve value propositions
• Developed new products, services
uniquely suited to the downturn
Priced for profitability
• Shaped demand to gain market
share with pricing
Source: Accenture Consulting
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New Approaches/
Strategic Opportunity
High Definition Supply Chains
Requisition –PO
tracking and
Replenishment
Warehouse Tasks
and Activities
Cold Chain and
Logistics
Facility and
Delivery
Solutions
Shipment,
Global Track
and Trace
Business Process
Platform
Timely Decision
Support
Automated Event
Management
ERPs Go Mobile
From Record Keeping Repositories to Execution Engines
ACCOUNTING
• Inventory
Accounting & MRP
• Limited Execution
Support or
Integration
• Stale Data
• Integrated Planning & Execution
• Choices in User Interfaces
• Real Time, System Directed Tasks
EXECUTION
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Why Go Wireless?
Accuracy
Efficiency
Visibility
Eliminate Data
Entry Errors
Paperless, Point of
Use Data Entry
Real Time Updates
Information You
Can Trust
Simplified Data
Entry
High Definition
Supply Chains
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Mobility Saves Money
Reported by best-in-class companies running a WMS
BENEFIT AREAS
PERCENTAGE OF SAVINGS
 Inventory Count Accuracy

Achieve Accuracy of up to 99.9%
 Shipment errors

Achieve Accuracy of up to 99.9%
 Productive hours

Achieve productivity of >=95%
 Perfect order fulfillment

Achieve fulfillment of >=99.1%
 Lost sales

Reduce lost sales <0.25%
 On time ready to ship

Achieve shipment time >=99.98%
 Inventory Shrinkage

Reduce shrinkage <= 0.005%
 Reduction in distribution costs

Reduce distribution costs <2.1%
 Data entry errors

Reduce errors upto 1 in 3 million
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
What is RFID/RTLS?
RFID is a technology for tagging physical items with a unique ID that can be easily and
non-invasively read -- a “wireless bar code.” The ID can then be associated with a system
representation of the object that contains all associated records (e.g., contents, state)
• Chip holds
• Antenna receives power and
memory that
stores identifier
• Implements
wireless protocol
• Tag contains chip,
•
power source, &
antenna
Sends back identifier
upon power up
•
analog signal from reader
Converts radio signal to and
from analog electrical
signals
• Reader communicates
with tags in range to
read all identifiers and
memory (payload)
• Edge Server collects
observations & drives
readers
• Forwards events to database
tier for distribution
• Application
receives transient
messages &
reacts
immediately
• Event Queue, often implemented as transient queue
• At most basic level, Database serves as a “better
bus”
• Data archiving and aggregation performed in
application-neutral level
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
IDTechEx: Apps by Type
# Companies implementing (in 000’s) – surveyed (not pilots)
• More data for convergence – using
WiFi location capabilities to
complement RFID
• Uses: WMS, Yard, Carrier & Fleet
Mgmt, Retail (Store), Logistics,
Field Services, MSCA, Any facility
tracking & event management
solution
Source: IDTechEx, Review of RFID in 2009
http://
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
RFID, RTLS Ecosystem
RFID Applications
Process
Oriented
Optimization, Analytics
of Events using rules,
heuristics and solvers.
Dashboards for
Exception Processing
Data
Oriented
Mapping Device events
to Business Events and
Controlling Data Flow
Device
Oriented
Adapters, Drivers to
process reads and
aggregate them
Infrastructure
Hardware & Edge: tags,
readers, network
infrastructure
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Master Data Management Brings Insight
First Step to Clinically Driven Resource Planning
Designed for “Configurability” in
a heterogeneous environment
Designed for “Trends” in a
heterogeneous environment
Supplier Hub
• Single Source of Truth
Vendor Profile
• De-Duplicates
Master
Data
Analytical
Data
Procurement & Spend
Analytics
• Interactive Dashboards
• Ad-hoc reporting
• Merges
• Alerts
• Standardizes
• Charts
• Captures
3rd
• KPI’s
Party Data
• Validate Addresses
• Classify Vendors
• On-Board Vendors
• Pivoted and tabular
reports
Transactional
Data
• Guided navigation
Supplier Relationship Management
Designed for Transactional
“Throughput”
• RFx
• Contracts
• Auctions
• Ship Notices
• Purchase Orders
• Invoices
• Receiving
• On-Board Vendors
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
17
Master Data Management for Healthcare
SOURCES
DESTINATION
Multiple
Inventory
Locations
WMS
Par
Location
Product
Data
Data
Repository
Standardization
and Normalization
3rd Party
Pharmacy
Inventory
Locations
Item
Item
Masters
Masters
MedSurge
Consolidation
Access
& Search
Workflow
enabled
Change
Management
Synchronization
to downstream
systems
Multiple ERPs
GHX Data Loads
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Core ERP
Applications
Creating a Common Repository for Products and
Systems
Consolidation
Internal Systems
Individual Facility
Item Master
Central Hospitals
Item Master
Surgical Systems
Access
& Search
Point of Use Systems
Workflow enabled
Change Mgt.
*
Import
Product
Data
Par Locations
Pharmacy
Repository
PeopleSoft ERP
External Systems
Synchronization to
Downstream Systems
Synchronization
ERP
XML
Output
(print catalogs,
data sheets,
Distributor’s
Catalog
GHX
etc.)
Mfg’s Catalog
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Inventory Policy Planning

What is Inventory Policy Planning?
Inventory Policy Planning enables you to strategically manage
inventory policies and service levels throughout the supply chain.
Calculate order quantities and safety stocks using selected
inventory strategies. Conduct what-if analysis, compare your
current inventory policy with simulated inventory policy
scenarios—and improve inventory levels.
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
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Inventory Policy Planning
•Reduce Inventory $
Investment while
Increasing Inventory
Turns
•Monitoring Seasonal and
Trend Sensitivity
•Planning to Target Service
Levels
•Knowing your Inventory
Investment beforehand.
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
21
GS1 Mandates
Formerly EAN, UCC & ECCC
1 Barcodes
• Identification standards for items, packages & other label data
Designing the
standards
that drive the
supply chain
2
Locations
• Standards for identifying trading partner sites
3
Item Master Synchronization
• Global network for secure, continuous data synchronization of
item master information
4 RFID
• Electronic Product Code, an RFID tagging standards system
5
Traceability
• Standards & processes for product track & trace
• Focus on quality conformance, authentication etc.
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Why Comply?
Accuracy and Safety
Inventory Accuracy
• Eliminate discrepancies and confusion
between internal and supplier item numbers
• Eliminate scanning errors
Cost Savings
• Avoid relabeling at receipt
• Automate complex synchronization
processes
Patient Safety
• Zero discrepancies in what you
buy, receive and dispense
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Drug Supply Chain Integrity
Serialization and ePedigree Management Application
1
6
Returns
Reconciliation
• Import returned serials
• Reconcile serials
against sales orders
• Assess and authorize
valid returns
• Serial disposition
Serialization
•
•
•
•
Unit & case serialization
Multi-site provisioning
Serial import and export
Contract manufacturing
serial data exchange
• Custom serial algorithms
2
Packaging
• Web services integration
to packaging systems
• Packaging hierarchy
maintenance UI and
services
• Serial and packaging
inquiry
Comply, Track,
Trace, Protect
5
3
Track & Trace
• Portal for customer and
consumer serial
verification
• Mobile access
• Flag counterfeit serials
• Protect public health
4
Receiving
• Inbound ePedigree
management
• BI dashboard drilldown
into receipt and serial
details
Shipping
• Outbound ePedigree
management
• Shipment and serial
analytics
• Export product data to
regulatory database(s)
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Sourcing At-a-Glance
Identify
Opportunities
Implement
Agreement
Approve
and Issue
Identify Suppliers,
Define Strategy
Buying
Professional
LOB
Stakeholder
Analyze
and Award
Supply
Base
Define
Negotiation
Conduct
Negotiation
“Strategic sourcing applications are providing the triggers
for cultural change, higher productivity and -- above all -return on investment.”
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Solicitation Life Cycle
Standards
Team
Contract
Expiration
Sourcing
Event
Requisition
Vendor
Responses
• Created from Req’s, • Notify individuals
PO’s, Contracts,
Bids, etc.
• Bid Factors
• Cross-Functional
Collaboration
• Internal or external
Deliverables
or groups via
email/website
• Vendor SelfService
Registration
• Surrogate
Bidding
Analysis
Award
• “What-if”
• AutoCreate
Analysis
Purchase
Orders or
Contracts
• Auto-Award
Recommendation
• Import/Export
Excel
• View status
change history
• Formal
Ammendment
Tracking
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
• Track History of
Bids/Award
Issued
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Facilitated Online Bid Comparison
Make Faster Award Decisions
• Filter Out Identical Bid Factors
- Focus Review on Bid
Differences
- Easily Identify “Outlier”
Responses
• Side-by-Side Comparison
- Use structured bid data
- Automatic bid scoring
• Provide online analysis for
fast, accurate awards
- Graph formats and export to
Excel
- Flexible award methods
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Sourcing Knowledge Capture
Drive Optimal Results by Re-Using Best Practices
Bidding Rules
Supplier Lists
Sourcing Policy Rules
New Sourcing Event
Sourcing Templates
BID Factors
Scoring Methods
Negotiation Event Style
Knowledge from
Past Sourcing
Events
• Leverage Proven Practices and
•
•
Buyer Expertise
Retain Knowledge across the
Organization
Reward The Best Suppliers With
More Opportunities
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
What Analysts are Saying…
Sourcing Challenge
Average Improvement Through E-Sourcing
High material costs
14.3% cost savings
Ave sourcing cycles 3.3 - 4.2 mos
Cut sourcing cycles in half
High transaction & admin costs
Reduce sourcing admin costs by over 60%
Long time to market cycles
Shrink time-to-market cycles by 10-15%
Inconsistent sourcing procedures and
skills
Improve ability to identify and standardize on sourcing best practices.
Enhanced knowledge capture and transfer
Inability to exploit market changes
Enhanced market knowledge and improved transparency
Unable to effectively exploit low-cost
country supply sources
Dramatically improve ability to identify and negotiate with new
sources of supply on a global basis
Transactional and combative supply
relationships
Detailed RFx and enhanced collaboration clarifies expectations and
improves supply relations. Cycle times savings free up buyers to
build and develop supply base.
Inadequate spend under management
Process efficiencies empower application strategic sourcing to more
spend
 Strategic sourcing is emerging as the leading strategy to control costs, capture
innovation, and maximize performance
 E-sourcing technologies deliver information visibility and globally infrastructure to
enhance and accelerate strategic sourcing
CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract
Analytics Drives Effective Supply Chains
Primary KPI Dashboard
Clinical
Data
Cost
Data
Data
Warehouse
Supplies / Discharge Elevated
Drill to Region
Drill to Supply Category
Revenue
Data
Drill to Diagnoses
Drill to Providers
It will give you a serious competitive advantage –
that will eclipse all other early savings!
Challenges in Spend Analysis
Incorrect Classification, Multiple Taxonomies
Incorrect Classification
• Large uncategorized Invoices (>50% of invoices
not tied to PO’s)
• Pervasive use of Miscellaneous category
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Adapting and Adopting
A Need for Change
Leading Business Trends
• Focus on consolidating product information
• Drive toward better product data quality
• Automatic data synchronization with trading partners
• Improve collaboration across and beyond the enterprise
• Increasing component reuse in product designs
• Accelerated new product introductions & changes
The Top Strategies for Process
Improvement
Deploy Best Practice Processes
• Close down non-controlled,
non-compliant P2P flow paths
• Incorporate eCommerce
language into contract
templates
• Incorporate internal service
operations (Print, Catering,
Telecom etc.)
• Use of pop-ups/forms/websites
to capture strategic information
needed for order (Serial #, Lot
# etc.)
• Think “Lean”
Collaboration is Essential
Process
Technology
•Integrate
•Optimize
•Simplify
People
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Technology’s Impact
Marriage of Process and Technology
Time and Technology are Driving
Efficiency – Real World Example
Vendor
Intercontinental Subscription Service
Software House
Airgas
Worldwide Technologies
Grainger
WorkflowOne
Jeter
BatteriesPlus
Franklin Interiors
Corporate Express
Go-live Date
Jan 9 2009
May 9 2008
Mar 7 2008
Feb 26 2008
Feb 19 2008
Oct 17 2007
Sep 13 2007
Oct 9 2007
Oct 10 2007
May 30 2007
Total eligilble
Lines
145
1,067
554
5,385
6,537
45,209
4,951
382
2,674
331,362
398,266
Requisitions via ePro accounted for 97% of activity (97% lights out).
Reduced work load from 1 FTEs to .25 FTEs (less than WFO due to EWay)
Match Exception Improvement
Better catalog control
Increased MWDBE business (improved business compliance and improved
reporting)
eMarket Lines
#
%
145
100%
255
24%
435
79%
2,438
45%
5,621
86%
44,043
97%
3,859
78%
197
52%
435
16%
326,993
99%
Lights out lines
#
%
143
99%
0
0%
0
0%
678
13%
5,055
77%
43,624
96%
660
13%
127
33%
118
4%
311,076
94%
384,421
361,481
97%
91%
Current
Run Rate
99%
0%
0%
32%
77%
96%
84%
53%
13%
97%
Leverage Technology to Reach
Partners
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Summary
Summary of Best Practices for
Effective Supply Chain Management
Adopt Industry Standards
Consolidate with Shared Services Solutions
Collaborate within the Community (suppliers and end users)
Automate material flows and leverage technology
Leverage business analytics and decision support
Q&A
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