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A Materials Management Success Story

by Davin Wilfrid

April 27, 2010

By Davin Wilfrid, ERP Expert

Last year I wrote a case study on Kingston General Hospital, a large teaching hospital in Canada, which had recently expanded its SAP system to manage all the tubes, bandages, needles, and other medical supplies distributed throughout the facility. Capitalizing on a reimplementation of SAP ERP 6.0, the hospital was able to create a centralized system that tracks supplies from the moment they arrive at the hospital loading dock, feeding real-time data into the SAP system for accurate planning and supply chain management.

Here are seven different transactions KGH was able to move onto the mobile platform:

1. Goods receipts (stage one)

The KGH team divided the process of goods receipts into two parts. In this first stage, receipts generated by mobile devices alert the SAP system that a quantity of goods has arrived at the hospital, but is not yet ready for use.  

2. Goods receipts (stage two)

The second stage of the goods receipts process occurs after the goods received at the loading dock are put away in the warehouse. This alerts technicians that the goods are available for use.

Upgrading to a two-stage goods receipts system offers several advantages. For one, it avoids confusion over whether items have merely arrived at the hospital or are stocked and accounted for in the warehouse. The system also helps KGH track where items are in the warehouse and how long they have been there.   

3. Storage location and transfer

Before implementing the new mobile device strategy, there was no good way to track the movement of items from one storage unit to another inside the hospital. This affected the overall accuracy of the system, according to Morey.

The new mobile device system allows technicians to account for such items during the move, feeding the updated data directly into the SAP system.  

4. Stock overview

This overarching transaction performs a basic function ? allowing the MM team to view supplies broken down by quantity and location.

“That transaction is used across the supply chain by our supply assistants at the units as well as our warehouse assistants within our central distribution center,” says Morey.  

5. Departmental inventory

With the increased ability to track inventory in real time, the MM team began to track inventory by department, rather than just from a central depository. This allows the team to track items that have been purchased for the department but have not passed thr ough the central inventory warehouse.

For example, some specialty medical devices are used only by one department. To track those devices as part of the greater supply chain, a supply assistant can scan the items into the system at the department level ? rather than routing the items to be checked in at the central warehouse.  

6. Goods issued reservation

Prior to implementing the mobile device solution, paper transfer slips created issues for KGH’s inventory management goals. Because the paper slips would have to be entered into SAP manually, there was a lag between the time when goods were reserved and when the item arrived at the right place. To keep inventory counts accurate, technicians would have to manually adjust the inventory counts based on the paper transfer slips.

“Now, our pickers have the ability to adjust pick quantities on the fly in real time. So if they walk up to the shelf and they’re looking for 10 items but there’s only five there, they can issue that five and we don’t have to make any manual adjustments moving forward,” says Morey. 

7. Enter count results

The MM team does a daily count of items in the central warehouse based on the SAP system’s projections. Having real-time data available from the SAP system makes this process more efficient by directing warehouse employees to the appropriate location for a certain item and prompting him or her to verify a specific count.

You can read the full article at the ERP Expert Web site, or by searching for "Kingston General Hospital" in the search box on this page. I'd also love to hear some more success stories of extending the reach of SAP ERP out to your entire company.

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