CAP TODAY Pathology/Laboratory Medicine/Laboratory Management
Kevin B. O’Reilly
June 2015—Sharon Cox, MT(ASCP)SM, has a passion for the correct count.
Charged with managing the laboratory supply inventory as core lab supervisor at Saint Francis Health System in Tulsa, Okla., she knows the right tally matters. Get it wrong and the lab can wind up with too little of what is needed. That can mean big overnight shipping charges when things run out unexpectedly. To avoid that outcome, the lab may order more supply than necessary, which leads to a different kind of problem.
“All those reagents you have sitting in the refrigerator—that’s just wasted money sitting there that could be better used by the health system,” Cox said last month during a talk at the Executive War College in New Orleans.
Cox
“Now we run a lot leaner ship,” Cox said, explaining the impact of the lab’s implementation of an inventory management system powered by radio-frequency identification. “We used to have two of everything, and we had $1.2 million worth of supplies in stock. That’s now down to $700,000.”
This sort of just-in-time supply management is enabled by getting the correct count, of course, but doing so is easier said than done. As with any other process in the laboratory, the more manual it is the more prone it is to error. Before adopting Abbott’s RFID system in November 2013, the Saint Francis laboratory, which performs 8.8 million tests annually, employed labeling and supply-chain software made by the German company SAP to manage its inventory.
After a review aided by Abbott, Cox and her colleagues discovered a 27 percent inventory error rate that added $68,000 in expenses annually due to expired stocks, urgent orders, and items out of stock. Those mistakes came about because products had to be labeled by hand. It is easy enough to slap the wrong label on a product. What shows up in the tracking system as C-peptide reagent could actually be C-peptide calibrator because someone goofed.
Manual data entry was another source of mistakes, Cox said.
“If you’re off by one digit, then it could be the wrong product that’s being decremented. There are all sorts of areas with that touch system where you’re making mistakes with labeling or how you’re consuming your product.”
Abbott, by contrast, ships all of its supplies with the RFID tag already affixed to the product, reducing costly and error-prone hands-on time at Saint Francis. The companion software automatically enters any changes as read by handheld RFID readers or strategically placed RFID-scanning portals.
As an Abbott shop, Cox tells CAP TODAY, about 70 percent of Saint Francis’ laboratory supplies come from the company. For the more than two dozen other vendors it works with, the lab uses a printer that can spit out 100 RFID tags in two seconds. In all, the lab tracks more than 2,500 RFID-tagged items. Cox said she is pushing the other vendors to adopt RFID to save her lab the time and expense of applying the RFID tags.
“As we’re negotiating with vendors now, part of our demands are going to be: ‘We have this RFID system, and you have to accommodate this system or, frankly, we can find another vendor to work with us,’” she said at the War College.
One shortcoming of barcoding is that it requires a line of sight between the handheld barcode reader and the barcode tag for counting purposes. That makes reconciling discrepant inventory levels a time-consuming process.
“We used to do a wall-to-wall inventory once a year,” Cox said. “It took two of us 20 hours to go through the entire core lab and count every widget in there. That’s every part in your lab, every reagent and consumable.”
Now, using the Abbott Inventory Manager system, that everything-and-the-kitchen-sink count takes just 15 minutes and is done once a week. The handheld RFID reader needs to be only in the same general area as the tags to do its counting. Geoff Zawolkow, former CEO of RFID Network, an RFID product-testing website, explains the impact.
Zawolkow
“The barcoding stuff was a big improvement over having to visually figure out what you had. Now you can just use a barcode reader. But if you think about it, you have to basically touch each item or have a line of sight with each item and manually read each one individually,” Zawolkow tells CAP TODAY. “With RFID, you can bring the handheld reader within range of the area where the supplies are being stored and quickly read all of them. If you had a refrigerator with a bunch of reagents in it, you can read those in a matter of seconds, compared to a number of minutes or maybe even an hour to do so.”
Cox said RFID works at room temperature, the cold temperatures found in lab refrigerators, and in freezers.
“A refrigerator turns out to be the best conduit for that technology,” she said. “It’s a big metal box, so when you shove the RFID beam in the fridge, those beams actually bounce up the walls. So I get 100 percent read rates with refrigerators jam-packed with reagent boxes.”
The switch to RFID has saved Saint Francis more than 1,200 labor hours a year in hands-on inventory time, valued at nearly $40,000, Cox said. Reducing the amount of inventory, enabled by automated tracking of supplies, slashed nearly $300,000 in costs right off the bat. The lab also slashed nearly $27,000 in overnight shipping costs. Using RFID, Saint Francis decreased its inventory error rate from that 27 percent mentioned earlier to about one percent.