Intalere Member Best Practice Spotlight – Mankato Surgery Center – Managing the Supply Chain and Inventory Efficiencies

ISSUE

Mankato Surgery Center was noticing variables in the year-end physical inventory counting, inconsistencies in product nomenclature, inaccuracies in identifying consignment inventory, and inaccuracies of the physical counts that lead to significant over-valuation of inventory and difficulty in determining profitability.

SOLUTION

A newly created multi-disciplinary Inventory Efficiency Workgroup identified the general assumptions and developed a project scope. The objectives for the project were to eliminate the duplication of labor that occurred during the annual physical inventory of correcting entry counts and to eliminate the erroneous inventory valuation during the annual financial audit. After thorough auditing, benchmarks were created. The multi-disciplinary workgroup team approached and solved the issues from different focal points.

OUTCOME

It was determined that the Item Master List was the pinnacle of the overall issues. Seven percent of products on the Item Master List were identified as inconsistent nomenclature and product misidentification. Staff spent more than 60 hours correcting the Item Master List. Further, the annual financial audit showed inventory was overstated by 94.4% and by removing vendor-owed inventory from the Consignment List, the correct inventory value was calculated. It was also found that the Implant Inventory was set at an artificially high quantity to save computer key strokes, so this was eliminated, thereby, eliminating the artificial high-value of inventory.

ABOUT MANKATO SURGERY CENTER

Mankato Surgery Center, accredited by AAAHC, is a multi-specialty, physician- owned ambulatory surgery center located in south-central Minnesota. Mankato Surgery Center focuses on providing the highest quality ambulatory surgical care with state-of-the-art surgical equipment and technology, and highly skilled and trained staff.

Check out the project video and view the Mankato Surgery Center page in the 2018 Intalere Best Practices Compendium.

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