Healthcare logistics company, Clifford Hallam Healthcare (CH2), has undertaken a 10-year plan to improve its supply chain and warehouse initiatives to overcome data and traceability issues in the medical and pharmaceutical wholesale industry.
Partnering with GS1 Australia, CH2 CIO, Ged Halstead, said the company adopted the GS1 System — a set of universal standards for product identification — in 2006 to improve such inefficiencies within supply chain operations, as it “didn’t have enough products with standard identifiers” such as Global Trade Item Numbers (GTINs) and physical barcodes.
“We had to engage with our suppliers to make them realise that in the supply chain now, you’ve got to have a barcode on your product otherwise it’s invisible to us.”
CH2 also implemented a radio frequency (RF) barcode scanning inventory management system in 2007 over 14 months to enable the company to scan barcodes; to data capture through to receipt, suppliers and dispatch; and allow its customers to scan products using CH2’s barcode labels.
The company also installed an e-messaging service with a number of key suppliers to provide despatch advices with expiry dates, lot and Serial Shipping Container Code (SSCC) labels.
Prior to the adoption, Halstead said the company had to ensure its Enterprise Integrated Platform (EIP) solution — which uses Oracle’s JD Edwards EnterpriseOne 8.11 software — could manage its GS1 standards.
Thereafter, Halstead got the board’s support and found qualified project managers to assist in the implementation.
“When we started implementing, we discovered there were a lot of people who were willing to tell us how we could do things better and we took their ideas,” he said.
“We’re not afraid of change anymore, whereas in the past changing warehouse processes were quite a task. So we’ve gotten over that by listening to our workforce and adopting their ideas.”
However, it wasn’t all smooth sailing. Halstead said CH2 was ready to scrap JD Edwards a few years back due to a previous integration that “hadn’t gone too well”, but decided to keep it on board and smooth out the bumps instead.
He added that JD Edwards worked seamlessly with Data Systems International’s DC Link solution, which is used to support the RF system.
There were also hurdles in expanding the company’s functionality while keeping performance up for users, Halstead said.
“We’ve had to do things like virtualisation and find a good data retention plan and then a good data management tool, which helps us keep our active files as small as we possibly can so we can get good performance out of our software,” he said.
“The frequency of scanning could be up to 6000 scans per hour and you need it to be fast, so you’ve got about 120 or 130 odd people waiting for sub-second responses; you don’t want slow performances.”
Following the implementation of the GS1 standards and RF system, CH2 has seen improvements in its inventory accuracy, which increased from 30 per cent to 97 per cent; pick accuracy reached 99.8 per cent from 93 per cent; working capital was reduced by 25 per cent; and lock control in the wholesale space is now a reality.
“Our industry is moving ahead in traceability which is very important,” Halstead said.
“It was non-existent before. I look forward to the day that we get mandated to do it; we’ll get a stronger uptake in traceability.”
Looking ahead, CH2 has devised a five-year plan to deliver better customer service, such as improving its online ordering system, CH2 Direct; retiring old legacy architecture and replacing with more collaborative infrastructure; and implementing a “collaborative extensible supply chain”.
Halstead said CH2’s customers, being large hospitals, can not only check their own stock holdings, but also CH2’s and its supply community “to better meet their chances of getting urgent deliveries or urgent orders and save a bit of money, and not have stock lying around on shelves everywhere”.
“That’s one of our problems in the industry. One of the things that cost healthcare quite a bit is that stock expires and we can’t afford that, so I want to give stronger visibility to what’s in the supply chain and how we can optimise the logistics of the total supply chain.”
The company is also working on the National Product Catalogue (NPC), which is part of NEHTA’s platform for building a single catalogue with all healthcare items on it. “When we launch into the e-health world [1 July 2012], you basically need to have good identifiers for your products and they need to be kept somewhere,” Halstead said. “So you’ve got to have those GTINs attached to those products and those GTINs need to be recorded in the NPC.
“The doctor has an e-health number, you as the patient need to have a number and the product needs to have a number so that we can marry the three things.”