Proven Supply Chain Optimization Strategies Help Spectrum Health Reduce Logistical Costs and Stock Outs
Johnson & Johnson Medical Devices Companies Offer a Tailored Approach to Help Hospitals and Health Systems Improve Supply Chain Efficiency
SOMERVILLE, NJ – August 23, 2017 – Spectrum Health realized considerable improvements across its twelve-hospital system with help from CareAdvantage from the Johnson & Johnson Medical Devices Companies and its Supply Chain Optimization capability*. Leveraging this approach, the Johnson & Johnson Medical Devices Companies (JJMDC)** have helped Spectrum Health cut the weekly number of out-of-stock devices by half, nearly eliminated expedited shipping fees, and reduced the average number of days that products are out of stock.[i]
For many hospitals and health systems making the transition to value-based care, the supply chain continues to be a strategic area of focus to identify opportunities for managing costs while improving the quality of care. For instance, nearly one-fifth of clinician time is spent on supply chain and inventory management, and reducing supply chain inefficiencies can help increase clinician time to be spent with patients, on research and education, or even training new staff.[ii] Additionally, up to 45 percent of a provider’s operating budget can be attributed to total supply chain costs, which could have been reinvested into improving patient care.[iii] CareAdvantage (www.careadvantagejjmdc.com) offers a tailored approach to help improve supply chain efficiency, decrease complexity, and reduce waste through best-in-class order performance, inventory management, and logistics strategies for JJMDC products.
“We engaged JJMDC to help us improve efficiencies and standardize processes within our distribution center for their products. Our efforts thus far have resulted in significant improvements for Spectrum Health, our clinical teams, and the patients we serve, and we now consider the work we’ve done together as a new standard for continuous improvement moving forward,” said Kurt Knoth, Vice President, System Supply Chain at Spectrum Health.
Together with the Spectrum Health team, experts from JJMDC analyzed data from across the Spectrum Health and JJMDC supply chain, identified the critical interdependencies between performance metrics and ordering behaviors, and provided insights on supply chain performance compared against a benchmark of similarly sized health systems. Once gaps were clearly identified, JJMDC and Spectrum Health worked closely together to set clear performance goals, support the use of data across the health system, and improve processes that make JJMDC medical devices more readily available at the point of care.
“We are dedicated to listening to the needs of our customers and helping them solve their supply chain challenges by utilizing our unique combination of clinical expertise for our devices and supply chain insights. Our approach focuses on not only creating efficiencies and reducing costs, but also driving a more patient-focused supply chain between JJMDC and our health system customers that helps reduce delays and disruptions in patient care,” said Melinda Thiel, Vice President, Customer Marketing & Solutions at JJMDC. “Our Supply Chain Optimization capability helps put the right supplies where they’re needed and when they’re needed, putting clinicians back where they are needed most: caring for patients.”
Spectrum Health achieved considerable improvements across all targeted goals. Compared to baseline measures, Spectrum Health reduced weekly product codes out of stock by 49 percent, reduced expedited order fees by 96 percent, and average days out of stock by 18 percent. [i]
CareAdvantage was launched earlier this year to help hospitals and health systems realize operational efficiency and drive better care and outcomes through a holistic, tailored approach. For discussions on a variety of topics in value-based care, visit Voices for Value on LinkedIn.
About the Johnson & Johnson Medical Devices Companies
The Johnson & Johnson Medical Devices Companies’ purpose is to reach more patients and restore more lives. Having advanced patient care for more than a century, these companies represent an unparalleled breadth of products, services, programs and research and development capabilities in surgical technology, orthopaedics, cardiovascular and specialty solutions with an offering directed at delivering clinical and economic value to health care systems worldwide.
About Johnson & Johnson Health Care Systems Inc.
Johnson & Johnson Health Care Systems Inc. (JJHCS) provides contracting, supply chain, business services, and strategic solutions to customers and commercial intermediaries of U.S.-based Johnson & Johnson companies, including hospital systems, health plans, distributors, wholesalers, purchasing organizations, government payer programs, and government healthcare institutions in the U.S. JJHCS also engages with customers to provide streamlined supply chain services for our products that seamlessly integrate with customer operations, address shared evolving market challenges to value-based care, and develop innovative solutions that improve patient care and access.
*CareAdvantage from the Johnson & Johnson Medical Devices Companies is offered through Johnson & Johnson Health Care Systems Inc. Its Supply Chain Optimization capability is provided for Johnson & Johnson Medical Devices Companies products.
** The Johnson & Johnson Medical Devices Companies comprise the surgery, orthopaedics, and cardiovascular businesses within Johnson & Johnson’s Medical Devices segment.
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[i] Data on file. Johnson & Johnson Healthcare Systems Inc. Weekly stocking reviews with Spectrum CSC / J&J Supply Chain. April
2016 – April 2017.
[ii] Marzouk S, Nelson S. “The biggest untapped resource at your hospital? Your supply chain.” Available at:
http://www.cardinalhealth.com/en/essential-insights/the-biggest-untapped-resource-at-your-hospital--your-supply-chai.html. Updated February 14, 2017.
[iii] Conway, K, “Applying Supply Chain Best Practice from Other Industries to Healthcare.” Available at http://www.ghx.com/industry-resources/white-papers/supply-chain-best-practices/.