Managing demand with demand flow
The team implemented a new system based on the ‘demand flow’ supply chain methodology. Demand flow consists of a two-bin system—one bin placed behind the other—for every SKU. Each set of bins is labeled with a bar code that pinpoints its specific location, down to the shelf.
When a supply bin is empty, it is removed from the shelf, and the full bin behind it is pulled forward. Empty bins are collected, scanned, and refilled at night. Employees then restock bins into the rear position on the shelf—ensuring that older product gets used first.
With the new demand flow system, approximately 1,000 bins are scanned per day.
This new methodology required the team to rely on reporting to track product usage and plan for future orders. At first, the team queried their Lawson ERP system, but it was difficult to see the big picture.
Jason says, “The only thing we had to begin with were these very stale, very monolithic reports from our ERP system. You would have to download five different spreadsheets, combine them all together to get something usable, and then combine that additional information to get to the point of how fast things were turning and where you should be doing your focus work.”
And if they wanted to create or update a report they would have to submit a ticket with the Information Systems (IS) department. Requests to update a standard report—such as comparing inventory at the main campus with that of the Bellevue clinic—went to the back of the reporting queue for the entire hospital.
In addition to reporting, auditing product was difficult and required hours of manual logging the data in the ERP system.
“There was no good way to actually look at every single product in every single location to check to see if the item had an expiration date, and then to go through every single product to make sure that none of it was expired,” Jason explains.