Healthcare Provider Case Study:

Helping a large hospital network improve inventory network visibility

A healthcare provider established across the western U.S. was faced with the challenge of moving from an inefficient, manual inventory process to a real-time, dynamic inventory solution which included best in class automation combined with human augmentation
Octagon was retained to assist with the transformation.  The first step was to understand the key drivers and influencers to inventory management within the value chain network, represented here with Octagon's Healthcare Supply Chain Quality Pillars 
The supply chain team was data rich but wisdom poor when it came to making inventory decisions.  Usage data was difficult to gather and required merging multiple reports into spreadsheets, a costly and time-consuming process.
Employing an inclusive organizational systems model to seamlessly integrate technology within the existing business domain, demand and supply data was transformed naturally into operationalized information upon which strategic decisions could made, then extended to the daily execution level to be combined with tacit, applied knowledge to provide incredible value when taking operational actions. Implementation efficiencies were also gained, extending capital dollars to allow 30% more of the network footprint to be included within the automated solution than originally planned.
Benefits from migrating the inventory management process were astounding, and included the following:
  • Eliminated daily inventory counts

  • Eliminated exchange cart systems

  • Minimized to near zero the potential for unnoticed stock outs

  • Minimized express freight charges

  • Eliminated telephone orders

  • Inventory productivity increased by 65%

  • Inventory working capital decreased by $23MM

  • Supplier delivery performance has improved by 10 percentage points and still going

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