Thwarting the cache and carry business

Secret supply stashes symptoms of deeper problems


Ever check the space above the ceiling tiles in the examination and patient rooms at your hospital?

Pffft! Why, pray tell, should I do that, you ask?

When nursing lacks confidence in Supply Chain’s ability — and competence — to provide enough products on storeroom shelves or in the warehouse for replenishment, they may stock some accessible backup materials in the unlikeliest of places for quick and easy access as needed.

Forget just-in-time. This represents just-in-case. In terms of supply chain efficiency and effectiveness, it’s just a mess.

Yet with today’s electronic capabilities for tracking and tracing products are these seemingly desperate measures really needed? Does maintaining a secret stash make for a sacred cow?

Short of regaining nursing’s immediate trust and confidence in their skills, what can Supply Chain do about it?

Healthcare Purchasing News has explored inventory management issues in myriad ways since its inception in 1977. This time, however, HPN decided to explore Supply Chain professionals as performing some archeological/detective work in determining whether their facility contains hidden alcoves of products. Think of it as Supply Chain for the Lost Crusade.

That’s easy, you might exclaim. Go tech! Shouldn’t investing in and implementing real-time location system technology (RTLS) that uses radiofrequency identification (RFID), infrared, ultraviolet, ZigBee, and other “modalities,” do the trick? Bar-code scanners require line-of-sight so products hidden from view may still be hard to find.

Identify and chart the problem first, sources counter. Before you invest in tech you may want to start with the organic, they contend — as in eyes, hands and legs. Bring in tech to maintain an improved process.

Doug Duvall

Doug Duvall, Solution Architect, Versus Technology, worked as an Operating Room Anesthesia Technician in a “former life,” where he had “first-hand experience with missing and stashed equipment.

“We were always in need of IV pumps for our cases, but obtaining one was a difficult exercise,” Duvall recounted to HPN. The search seemed unnecessarily circuitous. “First I’d go to the ICU Charge Nurse and ask for one. She’d refuse to give me one, claiming they had none. I’d ask how is it that the ICU has no pumps? She would assure me there were none. I would explain that this case was coming to ICU after surgery, so if she gave me a pump, it would come back. Still, she held firm.”

Then Duvall got serious and hit the back channels.

“Having gone through the official channel, I’d then look in the secret hiding places I knew about — behind curtains, in supply closets, even ceiling tiles,” he continued. “When I found a pump, I would have to sneak away with it, hoping no one noticed.”

In search of … the walkabout

Carola Endicott

Carola Endicott, Vice President of Services and Operations for Cardinal Health Inventory Management Solutions, Cardinal Health, promotes a “down-under” method of scouting.

“As they say in Australia, take a ‘walk-about’ with the best guide you can find — a friendly nurse,” she said. “We recently toured several operating rooms and discovered numerous secret caches of supplies, carefully stowed for later use. Unfortunately, almost all the supply hidey holes included some expired products. This reinforced the problem with this approach. The Supply Chain team spoke with the specific nurses involved in those rooms, and was able to pull those supplies back into central storage.

“In one case, there was so much ‘recovered’ stock, they were able to stop ordering some products for several months,” she continued. “The key is to find the nurses who have realized this stocking strategy ultimately hurts the nurses and patients. Without a guide, this process can become a wild goose chase and, in the end, can engender more distrust between Supply Chain and Nursing.”

Robert T. Yokl

Bob Yokl, President and Chief Value Strategist, SVAH Solutions, and former hospital Supply Chain manager, also finds that “walk-around management” remains the “best method” for finding hoarded, misplaced or missing supplies.

“At one facility where I worked, every Friday a supervisor and I would check out a different hospital department or to see what was going on,” he said. “Walk-around management involves rummaging through cabinets, drawers, PAR level stations, exchange carts, etc., to see what is going on after the products are delivered from your storeroom or receiving departments. Yet, this search for insight doesn’t need to be intrusive to be effective.”

Yokl found his efforts a “real eye opener” on nursing behaviors.

“We found that nurses were hoarding sheets, towels, wash cloths and blankets by the truck load,” he said. “We also discovered that our trays, kits and sterile packages were being broken into to retrieve just one item needed for a procedure (e.g., glove, syringe, dressing, etc.) then staff members were discarding the rest of the tray.”

To stop the hoarding, Yokl and his team assured the nurses that their linens would be available when they needed them, he indicated. Change didn’t happen overnight. “It took time, but we won our nursing staff over with our 100 percent fill rate on their linens,” he added.

For the kits and trays opened for various component products, Supply Chain “provided individual items that were frequently needed, but not available other than in a kit or tray,” Yokl recalled. “This solved most of the most egregious wasting of our kits and trays.”

David Kaczmarek

Dave Kaczmarek, CMRP, FAHRMM, Principal, Healthcare Supply Chain Solutions, and former hospital Supply Chain manager, muses that a facility simply needs a supply chain distribution system that is so good the clinical staff feels no need to hoard supplies.

Short of such operational near perfection, Supply Chain may “need to get creative as the clinicians,” he quipped. “Where are there potential hiding places? On most nursing units there really aren’t that many. Yes, there is always in the ceiling tiles, but my experience is that linen winds up there much more than supplies. That leaves the desk area, the break room, the clean utility room and staff lockers.”

PAR for the coarse?

Perhaps the better question is whether Supply Chain should try to find these hoarded supplies that nurses unsatisfied with Supply Chain’s performance stow away, and if so, how? Kaczmarek asked.

“The real problem with hoarded supplies is not the value of inventory tied up, it is the waste that so often results as supplies outdate or become unusable,” he continued. “There is also the danger that an expired item will be put back into circulation and be used. But the overall cost and danger is low, and the effort needed to constantly police for this type of activity could be substantial. So Supply Chain actions to prevent the hoarding — education and system that make it unnecessary — are the better use of resources.”

John Freund

John Freund, CEO, Jump Technologies Inc., concurred.

“You could spend all day trying to find technology to get rid of hoarding, but reality is nurses don’t hoard because they like to. They hoard because they still remember the last time there was stock-out, and a doctor yelled at them because an item they needed for a patient wasn’t there and care was delayed,” Freund noted. “Stock-outs equal hoarding. So what we really want to do is eliminate stock-outs — challenging because most hospitals don’t have the data to properly manage inventory.”

Visualization, hunches and gut feelings without accurate data fuel PAR replenishment, according to Freund.

“A Supply Chain tech goes into a store room, visually scans the on-hand inventory and decides what looks ‘low,’ especially among their high-velocity items,” he explained. “They use their first-hand expertise with the unit to decide what they need to reorder, and to make sure nothing stocks out, they’ll key in a number that tricks their system into replenishing an item. This renders PAR levels useless, and the outcome is overstocked on-hand inventory tying up cash and space, and causing problems like higher percentages of expired supplies.

“You can’t have a good process when the only data is what’s kept inside a supply tech’s head,” he added. “Hospitals need real data that’s both continually updated and shared by all.”

Mutual mistrust between Supply Chain and Nursing develops as an unintended consequence of this type of PAR replenishment, Freund insisted.

“The current processes and lack of accurate data feed into a vicious, inefficient process: Stock-outs erode nurses’ confidence in Supply Chain and causes hoarding,” he continued. “The combination of stock-outs and hoarding causes Supply Chain to overstock. Overstocking causes higher costs. PAR levels get reset but not well-utilized. Inaccurate PAR levels and poor replenishment processes cause stock-outs. And so it goes.”

Jamie Kowalski

Jamie Kowalski, CEO, Jamie C. Kowalski Consulting LLC, and a former hospital Supply Chain manager, proffers a composite blueprint from his clients and experience.

Start by having a Supply Chain tech count inventory in each department with a rep from that department at least quarterly, and then reconcile that with either the materials management information system (MMIS), the general ledger, PAR levels, item master or any other record of note, Kowalski suggested.

Eliminate closed cabinets, he continued, and replace them with open shelving, clear bins attached to the wall or on an open — or wire shelf — cart.

“Ask the Environmental Services and/or evening and night Security staff to randomly check departments, looking above ceiling tiles, in closets, etc.,” he said. “If the issue is suspected to be severe, install cameras in supply storage areas or place cameras in some of the rooms that they are most likely to stash inventory, such as an office, lounge, classrooms.”

Record and require a sign-off for all items delivered to all storage or user areas for 6o days, he continued. “Cut the on hand or PAR levels of supplies to a very low level, or just don’t deliver as much, and track how long it takes for those departments to complain that stock is running out or not available.”


Seth Larson

Chesapeake Regional Medical Center initially investigated a number of ways to track items that move around the facility, especially equipment, wheelchairs, IV poles and mobile items that can be hard to find, according to Seth Larson, Director of Supply Chain Management.

“Our team has brainstormed how we could use RFID but so far, we’ve just found the systems to be cost prohibitive, especially for lower-cost items,” he said. “We were not going to put a tag on every package, every bandage.”

Instead, they decided to match the value of an item to the business process to manage it, according to Larson.

“The more expensive an item, the more control you need,” he said. “So by rule, some things, like implants, pacemakers, tissue, have to be recorded by lot and serial number in the implant log, and in turn, you can see usage. Then as you go down the price scale, control becomes the PAR level itself and controlled access to the location where the item is kept. When we looked at RFID, we were all over the board. Some thought the every supply should be tagged, others thought only most expensive items. A colleague new to healthcare suggested we require the manufacturers to put tags on all items, even the most low cost items, but that’s going to drive a lot of additional cost. It’s not that you’re not going to lose a box of bandages occasionally, but for $3, how much control do you need?”

Larson labeled it a life-long problem that relies on trust between clinicians and Supply Chain.

“We’re required by accreditation bodies to control access to areas where supplies are stored,” he continued. “The staff has to have a badge or another method of controlled entry. Even with that, it’s hard to get rid of the movement of supplies that aren’t intended to move. What I see is a nurse hoarding her favorite item, hiding a stash in a desk drawer or in a locker, keeping a supply of her own just in case. She’ll still remember the time the item ran out back in ’93, and she doesn’t want that to happen again. I see this [happen] a lot in specialty areas, like the Cath Lab and the OR. As you get into high-cost items, like implants and tissues, there’s more tracking, so it’s harder for those things to go missing.”

Staff at Duvall’s former hospital tried multiple methods to remedy the situation, but found RTLS combined with PAR-level asset management that finally provided a solution.

“When you’re dealing with thousands of pieces of medical equipment, no shortage of hiding places, and a culture where nursing just doesn’t believe the equipment will be available to them unless they hide it away for themselves, the only way I see to break the cycle is to start from zero, know where everything is, create a shared mission between Supply Chain/Distribution and nursing, and move forward with a plan to support nursing by providing the equipment they need on-demand in real-time,” he said.

Supply Chain and Nursing together embarked on a process improvement initiative that included buying new pumps and employing technology to track equipment as well as automatically alert Supply Chain when their units were running low so they would always have what they needed, according to Duvall. “Because they were involved in developing the solution, they trusted us, and they relinquished all the equipment hidden on their units. We were also able to reduce the overall number of IV pumps we purchased, which saved us a lot of money,” he added.

“Spending time and money to find hoarded items is time and money wasted,” Jump Techologies’ Freund insisted. “Instead, use the resources toward the goal of eliminating hoarding, or really, stock-outs. Build trust and confidence with the nurses that Supply Chain knows exactly what’s going on with the inventory in their unit. Then, work with your CFO to raise the ceiling on what’s being tracked at the individual patient level, moving it up to items costing at least $25 or more. The lower-cost items can be covered in room or procedure charges.”

Freund encouraged hospitals to move the low-cost items to a two-bin Kanban system, and put the higher-cost chargeable items in a perpetual environment.

“Once you have all the data about each item and velocity, you can begin showing clinicians meaningful reports and help them share in your plans for eliminating stock-outs,” he said. “When they feel confident in the data and in your proactive planning, they can get on board with new supply levels and stop hoarding. Fixing this problem is going to allow you to significantly reduce on-hand inventory, which frees up cash that you can spend on better places than inventory sitting on shelves. It’s a win for Nursing and Supply Chain.”

Hoarding hot spots

Larson said he always found the Emergency Department to be a “hot spot for stashing and hoarding” with boxes of favorite items finding their way into lockers and desk drawers.

“Right now, our ED is being redone, and as we go from area to area, we’re uncovering secret stashes,” he said. “Just this week, the nurse manager has brought us cart after cart of overstocked supplies.”

By its very nature, the fast-paced OR can be a culprit, too, fearing a stock-out, according to Larson. However, velocity reports are making a big difference. “We’re going back and checking all the rooms and restocking as needed. We’ll take money out of this area, but we’ll be able to make sure we’re not stocking out,” he said.

Larson’s team also conducts rounds throughout the hospital, especially in areas such as the Cath Lab and OR, to get feedback on supplies. At leadership meetings, they discuss issues and the problem of hoarding specifically. Yet even though hoarding may receive a lot of visibility, Supply Chain still finds it happening, he laments.

“My team recently did inventory in the Cath Lab, poking into cabinets and hiding places, and found a little back room that was stuffed with high end pacemakers and some other items that weren’t consignment and weren’t purchased,” he recalled. “It was a bunch of items a sales rep had left here, so they’re here when he comes back in and needs something. But we’re at risk — if something is lost, missing, stolen — the manufacturer will want us to pay for it. In fact, that just happened recently. But again, these are items without consignment agreements, so I’m not paying for them. We’ve got to get much better visibility and agreements covering everything that’s in our hospital. When we can discover it, we can address it.”

Yet hospitals aren’t alone in the experience of supply hoarding. Larson witnessed it early on in his Navy career, too.

“When I worked in medical records, we found years’ worth of records because we saw a ceiling tile literally bowing,” he said. “It turned out to be from the weight of hidden files, which had been stuffed up above a person’s desk instead of being recorded. So we all use the ceiling tile reference as the punch line of a funny story, but it really does happen.”

Sidebar: Here’s how to prevent hordes from hoarding


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