Supply Chain pros must master the fundamentals before they can play ball

A few days ago I was watching some old baseball games on YouTube while I was working out. The games I specifically watched were the seventh game of the 1952 World Series between the Brooklyn Dodgers and the New York Yankees and the seventh game of the 1960 World Series between the Pittsburgh Pirates and the New York Yankees.

Having been a baseball fan my entire life, it was really exciting to see games and players I remembered from my distant childhood. It was also interesting to compare and contrast the game from that era to today.

Of all the major sports, it can be argued that the one that has remained most consistent is baseball. From 1900 to the present, there have been some notable changes, but to a great extent, the game has remained pretty much the same.

All of us who have ever played the game have had to learn the fundamentals of throwing, fielding, hitting and running the bases. Along the way, we were taught how to slide and how to bunt and how and when to throw to the “cut-off” man.

But sometimes when I watch today’s game, it seems to me that the fundamentals have been left out. Science has replaced art. The home run has replaced the single, the sacrifice bunt and the stolen base. The number of strikeouts per nine innings has skyrocketed. Players are put into and taken out of games due to mathematical probabilities. Everything is programmed.

In the seventh game of the 1952 World Series, the following players either bunted or attempted to bunt: Pee Wee Reese (B), Phil Rizzuto (NY), Jackie Robinson (B), Billy Cox (B), Roy Campanella (B) and Duke Snider (B). Campanella and Snider are in the Hall of Fame for hitting home runs, yet each tried to bunt for a base hit in the game. Campanella and Robinson succeeded. Most of today’s players don’t know how to bunt.

Today’s game is rife with strikeouts, with teams averaging more than nine per nine innings played. The seventh game of the 1960 World Series featured home run hitters galore. The game was decided by a walk-off blast in the bottom of the ninth inning by Pittsburgh’s Bill Mazeroski. The final score: Pittsburgh 10, New York 9.

There were no strikeouts in the game!

Both of the games point out the importance placed on learning the fundamentals in bygone years.

So what’s this got to do with the healthcare supply chain?

Simple. Alongside high-brow educational offerings that sport titles like “Value-based Selling in Action” and “Best Practices for Consolidated Service Centers” we need exposure to the basics – how to do them and how to tell if you’re doing them well.

What are the basics?

Understanding the needs of the customer. Listen, interact, repeat what you think you heard and continue to interact with the customer until both you and the customer agree you are on the same page. Ultimately, you will wind up getting the…

• Right product
• In the right place
• In the right amount
• At the right time
• At the right price

Measuring what you do. In my 45 years in the healthcare supply chain, the most common measurement of effectiveness has been, “Did I get yelled at today?” Unfortunately, that does not constitute actual measurement of performance. Key performance indicators (KPI) can be devised to measure virtually all activities in the Supply Chain, both financially and individual performance-wise.

Examples of financial KPI include:

• Inventory dollars/inventory turn targets: general stores, or, cardiac cath lab
• Inventory turn performance compared to turn targets
• Supply costs as percentage of total operating budget
• Supply costs per cmi-adjusted discharge
• Supply costs per patient day
• Supply chain operations cost per cmi-adjusted discharge
• Supply chain operations cost per patient day

Examples of performance-based KPI include:

Receiving:

• Total lines received
• Lines received per receiving FTE
• Total POs received
• POs received per receiving FTE
• Number of returns processed
• Number of items invoiced but not received
• Number of open POs

Distribution:

• Units inventoried and filled
• Units filled/FTE
• Number of cycle counts performed
• Percentage accuracy of cycle counts
• Number of items at 0 inventory level
• Number of stock-outs or back order from distributor
• Number of floor stock shelves replenished
• Number of floor stock shelves replenished/FTE

The idea of measuring should never be punitive. Its purpose is to see how well your operation is performing as measured against criteria that you determined were important. These same criteria can also measure the impact that changes you make have on performance. Constantly striving to improve may not be a basic task or action, but it should be a basic premise. Working together with the customer and constantly striving to excel is at the heart of every fundamentally sound organization’s purpose.

Learn the fundamentals, do the fundamentals, measure your performance and revise as needed. After all, success is fundamental.