CASE STUDY
Hospital makes substantial productivity gains
and reduces inventory levels with two-bin
RFID-enabled replenishment system
Another customer
SUCCESS STORY
provided by
2BIN- D – HOW IT WORKS
The CHU de Québec1, seeking to improve its operational performance,
implemented 2BIN-iD in two of its hospitals, Hôpital de l’Enfant-Jésus
and Hôpital du Saint-Sacrement. The patented RFID-enabled two-bin
replenishment system developed by Logi-D was implemented across a
selection of its general and clinical specialty units. Implementation of
this technology has greatly improved overall supply chain efficiency in
these areas, allowing for time savings for both clinical and material management staff by eliminating materials-related tasks, a reduction of its
inventory levels, and a minimization of expired products.
THE ISSUES
Labor-intensive demand capture rounds
M
aterial management-related tasks interfering with
clinical work
High inventory levels; slow turns
Insufficient storage capacity resulting in poorly organized
inventory environment
2BIN-iD, the patented RFID-enabled two-bin replenishment solution,
begins with an established quantity of a given item divided into two batches
and stored in primary and secondary compartments of a single storage
module.When the primary compartment is empty, clinical staff transfer its
identification tag (which contains an RFID transponder) to a wall-mounted
RFID “reader” board located near the storage unit. They then begin using
items from the secondary compartment, which holds a set number of
days’ worth of inventory. Placing the primary compartment’s tag on the
board triggers an automated replenishment request before critical supply
thresholds are met. (It is important to note that this simple action to
trigger replenishment is not required frequently; indeed, on average it
represents less than one tag per nurse per shift.) The system transmits
the request to a middleware application and, prompted by customizable
business rules, onward to the hospital‘s material management information
system, which then generates a pick list for stock items or a requisition for
direct purchase items. During their delivery rounds, material management
staff transfer the remaining supplies to the primary compartment and
replenish the new supplies in the secondary one. This ensures stock
rotation and helps prevent stock wastage due to expiration.
ADVANTAGES OF AUTOMATION
THE SOLUTION
2 BIN-iD, the patent pending RFID-enabled two-bin replenishment solution designed to facilitate just-in-time (JIT) inventory
management, recover valuable clinical time, and reduce
operating costs
The CHU de Québec is the result of a July 2012 merger between the Centre hospitalier
universitaire de Québec (CHUQ) and the CHA. The hospital center offers general,
specialized and ultra-specialized care. Closely affiliated with the University of Laval, its
multiple missions include patient care, teaching, research, and the evaluation of new
healthcare technologies and intervention methodologies.
1
The 2BIN-iD solution optimizes and automates supply chain processes,
allowing for:
t ransfer of supply chain activities from clinical personnel to material
management while reducing the overall time spent on supply issues
r eplenishment closer to the point of use to make it more efficient
a reduction of nursing staff movements and the time spent searching
for and retrieving supplies in storage areas
r eorientation of resources previously assigned to replenishment
tasks (mainly staff on nursing units) towards their primary mission of
patient care.
By streamlining workflows and eliminating non-value-added activities,
automation substantially frees up time that can be put to better use. The
benefits: increased service levels at a lower cost.
BEFORE
AFTER
THE RESULTS
Post-implementation measurements allow for remarkable gains relating to
productivity, supply costs and storage space.
Recurring productivity gains
Clinical staff
The implementation of 2BIN-iD accounts for up to an 80% reduction
in the time clinical staff spend on material-related tasks such as
searching for, ordering and retrieving supplies. A number of key
changes explain this extraordinary outcome, including the transfer
of logistics activities to material management staff, a better organized
inventory environment; and a drastic reduction in stockouts. Fixed
supply locations and a visual location system aligned with workflows
and treatments as well as the decentralization of inventory closer
to the point of use have freed up clinical staff and enabled them to
devote more time to their core activities.
Material management staff
The 2BIN-iD solution is able to increase the level of service offered
by material management staff, despite the additional replenishment
tasks transferred to them, as all clinical areas are now serviced by
material management compared to just half of these areas prior to
the transformation. And because time-consuming and error-prone
inventory demand capture rounds have been completely eliminated,
material management can now focus on replenishing departments
efficiently and accurately, based on real-time consumption data.
Supply-related gains2
Able to generate more than $2 million in
inventory reduction
With accurate demand data now instantly captured through RFIDtechnology, staff need no longer maintain just-in-case inventory out
of fear of supply shortages. This positively impacts inventory value
and storage capacity and has dramatically reduced inventory wastage.
2
All calculations and projections in this document are Logi-D estimates.
Up to 50% decrease in stock wastage costs
Product shrinkage or wastage is usually caused by expired, damaged or
obsolete products. Recent studies reveal that wastage can represent up
to 8% of the total distributed volume of supplies, primarily due to excess
inventory, slow turns and inferior top-up put-away practices.
Because 2BIN-iD facilitates just-in-time inventory management, hospitals
need only carry optimal levels of inventory, while the built-in stock rotation
feature further reduces the risk of products going to waste. It is estimated
that the new system has the capability to reduce product wastage by up
to 95%.
Space-related gains
Although space savings per se were not compiled, the gains generated by the
vertical high-density modular storage equipment quickly became evident, as
it optimized the storage capacity and improved the visibility of supplies.
The storage system that accompanies 2BIN-iD improves ergonomics, easily
adapts to changing conditions, and generally reduces the storage footprint
by an average of 50% as compared to a conventional shelving system.
Beyond the benefits described above, 2BIN-iD also provides evidence-based
optimization tools, real-time reporting and statistical information, which
supports insightful decision-making to help drive cost reductions and efficiencies
on an ongoing basis.
Revising our processes to incorporate new technology and make the most of
available resources in order to enhance the institution’s performance is one
of the key objectives of our hospital centers. The Logi-D RFID-enabled twobin replenishment system generates gains through improved logistics processes,
which, among others, relieve nursing staff of supply chain duties, allowing them
to focus on the hospital’s primary mission: patient care,” explained Mr. PierreAndré Tremblay, Technical Services Director at the CHU de Québec.“The
Logi-D RFID-enabled two-bin replenishment system was selected because
of the gains generated through improved logistics processes, which, among
others, relieve nursing staff of supply chain duties, allowing them to focus on the
hospital’s primary mission: patient care.
“We have seen many advantages by adding this practice to our supply chain. Notably, the Logi-D RFID-enabled two-bin replenishment system allows us to recuperate an enormous amount of stor¬age space and facilitates the management of
supplies and inventory. In addition, it is possible to generate productivity gains, and
above all, the system allows nursing personnel to spend more time with patients,”
continued M.Tremblay.
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