Executive Summary

The following report is done based on there material receiving area for northwestern memorial
hospital as a case study analysis. The report analyses the main causes for the creation of a
bottleneck in the material receiving area and the negative impact it has on the entire value chain
of the Hospital. In the report they have been critical areas of identification indicating that the
bottleneck is primarily created due to the hospital following the batch oriented process.

The batch oriented process has been discussed in detail indicating that it is a time-consuming
method. The need to wait until the number of units to complete the batch essentially increases
waiting time that leads to the bottleneck situation. The recommendation that is given in this report
is to focus on single piece flow method.

The adopting of a carbon methodology will help to implement the single piece flow method. This
particular methodology allows for better information floor and more transparency of information
at different levels which are essentially helps to improve the Visualization of material movement.

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Contents
Executive Summary ........................................................................................................................ 1

1.0 Introduction ............................................................................................................................... 4

2.0 Analyzing material movement process. .................................................................................... 5

2.1 Critical problems in the receiving area causes for bottlenecks in material movement and 3 day
delay. ............................................................................................................................................... 5

2.2 Major problems arising from the disorganized the receiving area process. ......................... 7

2.3 Benefits of moving to single day lead time .......................................................................... 8

3.0 Describing the material movement process to the receiving area........................................... 10

3.1 Batch oriented process ........................................................................................................ 10

3.2 Analyzing the batch oriented approach for the receiving area at NHM ............................. 10

3.4 Single-piece flow ................................................................................................................ 12

4.0 Recommendation to change the value stream map and move to a single piece flow ............. 14

5.0 Conclusion .............................................................................................................................. 16

Reference ...................................................................................................................................... 17

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List of Figures

Figure 3.1 Batch Process flow vs Single piece flow ..................................................................... 12

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1.0 Introduction

The focus of this report is to consider the case study analysis of Northwest Memorial Hospital
which is a leading teaching hospital in downtown Chicago. Having partnerships with the north-
west University Feinberg School of medicine they are a leading teaching hospital that has a staff
complement of 1600 medical professionals (Suett et al., 2019). The large volume of patient care
and teaching activities created a distinctive requirement for material supplies for the hospital. The
report looks at the case study from the perspective of Paul Suett who was hired in 2016 as a supply
chain performance manager to the hospital (Suett et al., 2019).

Based on the analysis of the case review it is evident that the hospital had a significant problem in
maintaining an efficient package and supply receiving area due to a non-streamlined process. The
problem statement of this report is to critical areas of the material receiving process using operation
management tools and propose suitable solutions to increase material movement efficiency.

The structure of the report considers five different areas which is designed to analyse the reason
for bottlenecks, look at the residual impact to efficiency due to a 3-day lead time variability for
material movement into the design department and also consider how the one-day moment process
would help to make improvements. The report also considers the dimensions of batch oriented
operation vs single piece flow and what it would mean in this particular context.

In making recommendations the report considers suitable changes to the receiving value map
process in order to move it to a single piece flow as well as consider changes to the receiving area.
In order to properly justify the changes that would be recommended the hospital's existing value
map flow mentioned in exhibit 2 and the facility layout of exhibit 5 which refers to the spaghetti
diagram has been their basis of workings.

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2.0 Analyzing material movement process.

2.1 Critical problems in the receiving area causes for bottlenecks in material
movement and 3 day delay.

The hospital's material process specifically dealing with the receiving area is analyzed the internal
supply chain is having several critical issues. It is these critical issues that are causing the 3-day
lead time from the point of packages arriving on the unloading dock of the hospital to it being
added to the Inventory system in the hospital.

The first challenging situation that can be noticed in the fact that there is a high level of time
consumption between the packages being loaded into palettes at the point of unloading from the
supplier trucks to the point of them being added to the system and efficient inventory count of the
Hospital. When we consider the value mapping system that was used to identify the process it can
be seen that a 24-hour maximum time period is taken only for the goods to be added to the
Officially inventory (Suett et al., 2019). There was significant time delays in terms of loading all
of the packages which could number even up to 500 packages a day into individual pallets at the
hospital is practicing the batch processing approach (Suett et al., 2019). This means that multiple
packages of different sizes would be loaded onto a single toilet in order to create a single Batch
and then it would be moved over to the processing area.

There are also very poor levels of information exchange at different levels in the fact that packages
requiring refrigeration but not identified early. It essentially meant that replication of processes
would have to take place or the entire process would be further delayed at different levels when
refrigeration requiring packages need to be rerouted. There was also a significant level of
inefficiency with packages being loaded into a single pallet and the pellet not being moved until it
is completely full (Suett et al., 2019). This essentially causes a significant time delay concept with
many goods being held at different locations at the point of unloading of supplies.

Once the pellets were moved into available workstation the goal was to add them to the system as
soon as possible and put them into any kind of storage space. The concept of somewhere anywhere
was the fundamental driving Force behind the official process. When companies do not have a
proper inventory unloading, categorizing, processing and storage system to cause major
bottlenecks of different areas. According to Petrillo et al (2021) this is mainly due to the fact that

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there is finite resources both of human resources as well as technological resources in any
warehousing complex. There is a limited capacity and capability for dealing with incoming
packages which essentially means that the company should take this into account when designing
the entire material receiving area and process operation.

Due to the delay of adding inventory to the ERP system the employees need to resort to the manual
operation of counting inventory which causes human error (Petrillo et al., 2021). The disorganized
storage of inventory can lead to wrong counting of inventory which essentially compromises the
total value that is added to the system. This leads to the fundamental aspect of ordering the product
Even though it is physically available (Suett et al., 2019). This causes a significant financial loss
for the hospital as they duplicate orders and at the end of the financial year will have a large
material write off value. The entire process leads to an over processing of orders which is a
duplication of work. This becomes wasted motion when we consider lean management systems.

Considering the present situation in the receiving area that is a very real concerns about the existing
quality policies and control mechanisms being put in place (Wiklund et al., 2016). For example
the need to ensure proper quality standards is paramount in this type of operation. The fact that
they are is medicine that is being administered to human beings which is a major part of the supply
indicates that there are compliance and quality standards that need to be maintained by the hospital
(Wiklund et al., 2016). The fact that there is no proper consideration for the necessary storage
space and that supplies are stored Anywhere and everywhere indicates that a compromise quality
policy will be practiced.

Considering that there flow of information is compromised to the point that there is no
identification of even the need for refrigerated product until the last minute , compromise quality
standard is a very real concern (Slack et al., 2013). Quality inspections will become delayed due
to the material being improperly stored and there can also be several drawbacks in terms of the
placement policy for quality defects (Morgan et al., 2016).

The capability of reporting back to the supplier the necessary information to address a quality
claim can take anything up to 3 days. The process of verification will also be added onto this time
frame indicating that any type of replacement action would definitely be a minimum of 5-days.
Depending on the lead times of manufactured product replacement format this can be seriously

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compromise agreement. Until the replacement is arrived requisitioning department may not have
access to the inventory to provide the required services to the patients. This can further compromise
situations in terms of patient care and customer satisfaction.

2.2 Major problems arising from the disorganized the receiving area process.

Due to the bottleneck situation being created at the receiving area there are several inefficiencies
taking place across the entire supply chain. Additionally ordering supplies for fear of shortages is
taking place. This potentially increases the number of inventory movement with creating the aspect
of duplicity. Duplicating supply orders when it is not required increases the financial cost for the
company as well as consumers more resources at the intake department as they have to deal with
additional material movement (Morgan et al., 2016).

The inventory does not match the desired required levels according to the erp system and there is
a high cost of inventory taken on by the hospital. Certain products can also go into a spoilage
situation such as the refrigerated required product if they have not been clearly identified and
categorized early. This situation of slow-moving inventory internally based on the bottleneck in
the arriving department can caused considerable delays in the entire service process of the hospital.
This can then lead to significant customer complaints.

Maintaining manual inventory records in order to compromise the integrity of perishable supplies
which could compromise conformity to Healthcare regulations. There is a much higher risk of
perishable supplies not being properly stored which can compromise quality integrity (Morgan et
al., 2016). This could compromise the effectiveness of the medication when it is being
administered and there will be no way to determine the source of the problem since human kept
records can be erroneous. In addition inventory that is all over the place at the higher probability
of not being recorded properly in terms of quantity and quality, dealing with over 71000 variations
of products in 765 Par Locations increases the probability of record keeping and compromised
quality management processes.

Finally there is a major concern with the inventory and in stock not being stored properly in terms
of employee safety. If large boxes of inventory are not properly stored into proper locations it can
lead to hazardous working conditions and in danger employees of the company.

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2.3 Benefits of moving to single day lead time

The improvement of material management internally can lead to several benefits for a hospital.
Not only does efficient material management help to reduce unnecessary cost factors for the
hospital it creates a match happier and healthier working environment for employees. Considering
that hospitals are in the service industry the manor and attitudes of employees have a fundamental
impact on how the service is delivered to the customer. Ensuring that a 1-day material movement
processes in place will essentially reduce the undue pressure felt by many employees and will
lead to much better working conditions within the organization (Morgan et al., 2016).

If the hospital is able to move to a single daily time by making the receiving area more efficient
they will be able to improve purchasing efficiency and purchase stock of only what is required.
This is because it will be added to the ERP system within a 24-hour period allowing for respective
department to identify accurate shortages. Create a more transparent process and also save the
hospital more money in terms of inventory purchasing (Meredith, 2011).

Another critical benefit is that it will be a cost-effective process in terms of reducing the number
of overtime hours the hospital needs to work in the receiving area. It will reduce inventory holding
Going to the one-day the time system will help to improve sorting and organizing storage by
putting stock into specific shelves or flow space location that have been specifically designated.

This will also reduce the hazardous environment of working in the receiving area as it will reduce
the chance of accidents taking place as inventory will be stored properly. It will also ensure that
specialized inventory is recognized and the special storage facilities such as refrigeration is made
available quickly (Meredith, 2011). This will reduce the spoilage of inventory which is also a
major cost saving from the hospital. The hospital will be able to minimize the additional cost of
rushing overnight orders and improved space management.

The one day process will be a controlled mechanism of Smooth material flow through the
Receiving area without taking any shortcuts to the process. This means that material that is
received will be routed through the various stages of the receiving process which will also include
quality inspection. Consideration for the quality inspection process will also become part of the 1
day lead time for material control. This means that any quality standard which is compromised can
be noted within the same day and reported to the supplier instantaneously. It will create a much

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better response time from the hospital as the customer to the supplier allowing them to resolve
the problem much faster. Most importantly maintaining quality management processes within a
24-hour period indicates that any type of supply which would either be perishable, or non-
perishable would be identified for a quality flaw quicker. The chances of in defective supply going
into the actual supply chain reduces exponentially with this type of process. Essentially the
hospital can increase it conformity to compliance standards and health regulations. They also
maintain a high level of social accountability .There is a good level of traceability with the proper
chain of custody in the paperwork as well as the physical inventory (Meredith, 2011).

Most importantly there will be a high level of customer satisfaction being created as they will be
less delay in materials being received by the relevant department to provide immediate service to
the Patience. This is one of the most important factors giving the dimensions of the hospital being
classified as a training Hospital. The this means that it has to maintain one of the highest standards
as it is these types of training standards that will be passed onto the students in the hospital will
make it their career benchmark when they going to other hospitals (Leseure, 2010).

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3.0 Describing the material movement process to the receiving area

3.1 Batch oriented process

The definition of batch oriented process is to treat materials as independent batches by grouping
them together for the purpose of easier recognition and better Handling of products. Batch oriented
process is generally common when there are many variations in any type of material category
(Leseure, 2010). Most companies will consider using the batch oriented process when there is a
large amount of materials being received at a single time and there are limited human resources
and other technical resources necessary for the processing of materials. By grouping materials into
batches companies will be able to more efficiently move the material from one location to another
with the given resources. The batch oriented process is also used to control the flow of material
from suppliers to destination. This allows for better allocation of resources for the Handling of
individual activities (Krajewski et al., 2019).

When considering the hospital receiving area and the entire process it is evident that the main
consideration was too secret material movement into batches. The fact that there are over 500
packages received and over 71000 variations that are stored at any given time the capability of
Grouping Medical Supplies was done to reduce the frequency of movement between locations.

3.2 Analyzing the batch oriented approach for the receiving area at NHM

When the value stream mapping is being considered that have been displayed in exhibit 2 it is clear
that a majority of the operation has been segregated into a batch oriented approach with the
exception of Step number 4. While the batch oriented approach is used as a means of reducing
movement requirement between locations it has the propensity to be extremely inefficient and
time-consuming leading to High waiting times at each of the movement nodes. This is mainly due
to the fact that the batch of inventory does not move the next location note in the process until
the batch has been completed.

Step one to step 3 of the package receiving a dock clearly shows the the batch oriented process.
The first indication is that truck drivers are giving specific delivery windows as Schedule times
essentially group in the deliveries together into a single batch. When truck drivers add here to this
delivery schedule a large amount of inventory will be received at a single point in time which

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essentially overcrowded the receiving area. Large amounts of inventory volume become
increasingly overwhelming for the existing process in the receiving area.

The batch oriented process required the palletizing of packages until they reached a certain volume
dimension before they could be moved into the receiving area from the dock. Both of these factors
indicates that the physical package would not be considered into the receiving area or even the
destination until the batch size was completed. For example if a package was received on a
Wednesday due to the batch processing approach the package would have to wait until the desired
batch volume had been reached before it must the next node in the process (Krajewski et al., 2019).

The largest delay that is being created is in step 3 of the value stream mapping which is between
8 hours to 24-hours for the inventory to be categorizing added into stock. In step 5 and 6 of the
value stream map it indicates that packages required to be scanned sorted and placed into
individual pallets once again and this was done in batches of 8 packages leading to waiting time
being created. The movement of the palace was also done in batches which would increase the
work in progress time frame (Kansra & Jha, 2016). By in the receiving area no movement of
inventory takes place to the next level until the desired number of packages that have been
domesticated to accomplish the batch volume is reached.

The using of the batch oriented process only creates the 38% value added activities indicating that
there is a significant limitation on communication and an increased number of delays with non-
standardized batch processing systems. Another critical issue with the batch oriented process that
is used by the hospital is the fact that there is no priority given for the materials and they are all
treated equally in the processing function. For example even material that requires refrigeration is
not identified and it becomes part of the batch process (Kansra & Jha, 2016). In this type of
situation perishable cargo can reach upper limits of perishability since it is not identified in the
process.

In step 7 and 13 the package deliveries to the designated Par locations will only take place after
palletization of the package. This means that there is a large waiting time as there is no movement
of packages until the pallet has been filled (Harvey et al., 2016). This means that the movement
into storage locations is not done based on material availability and scheduling but rather based on
Fulfilling the number of units that are designated to become the batch. This can lead to a non

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prioritization and erratic delivery of material. Defected there a batch oriented approaches at
multiple points of the value stream map indicates that the package goes through multiple
inspections and it is handled at different points duplicating the process. There is also no proper
performance tracking in the system which means the batch oriented approach in terms of start time
and finish time is not monitored.

3.4 Single-piece flow

When considering the inefficiency of the batch oriented process it is evident that the receiving area
would be more benefited using the single piece flow system (Harvey et al., 2016). The single piece
flow system indicates that even a single piece will move throughout the receiving process reaching
each of the nodes based on the priority of the package being handled. It can also be considered as
a first in first out basis in which all packages would be processed based on time and not based on
value. The following illustration demonstrates the difference between the batch oriented process
and the single piece flow process.

Figure 3.1 Batch Process flow vs Single piece flow

Source- Harvey et al (2016)

As indicated in diagram 3.1 the oriented process does not move from section A up to section B
until the number of independent packages the total volume demarcated for the batch (Greasley,
2014). At this particular time the movement of volume can cause a delay as the operations in
section C is not being given any work until the batch has been completed. This is critically a time
wasting operation.

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When the one piece flow is considered material movement between the Independent sections are
extremely fast. Even a single piece is moved to out the process indicating that all locations in the
receiving area will have some sort of material to be handled throughout the timeline of the day. As
it is clearly shown in the illustration the first part in the batch oriented floor moves in 21 minutes
and the full batch of 10 parts takes 30-minutes.However with the single piece flow the first part
will take 3 minutes and full batch of 10 parts will only take 12 minutes. There is a continuous
movement of parts between A, B and C locations when it comes to the single process flow . In the
batch oriented process location B and location see will not have any workload until location moves
that initial batch over to them respectively.

In this particular case study the movement was single-piece flow would indicate that packages
would have to be moved as soon as they are received at the dock into the next stage of the arriving
area (Greasley, 2014). The stages in the value map between one and three would mean that even a
single package should be brought into the receiving area from the dark and be put into the system
and then allocated to the Par location.

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4.0 Recommendation to change the value stream map and move to a single piece
flow

As it can be proven that the single piece flow is more efficient the following recommendations are
being given to modify the value stream map.

Implement a standard operations policy that is designed to reduced motion waste and consistently
evaluates bottlenecks and propose a method to eradicate the backlog. The use of the Kanban
Methodology of material management can be implemented (Greasley, 2014). It essentially allows
the process to take on a more visualization approach the workflow. The process will allow for the
following factors to be taken into consideration.

Visualization of the workflow through proper digital channels will allow for all person in the
receiving area to see the work load in a dashboard (Gligor et al., 2014). This will help to better
manage the workflow as persons will be able to identify the upcoming packages and also determine
what packages have gone through specific nodes on to the next stage. It will link up the receiving
area with procurement area so that better information exchange is taking place (Dobrzykowski et
al., 2016). This will also help to establish the implementation of feedback loops so that information
moves back and forth more smoothly, and all persons are kept aware of the locations of the package
and different time sets. More collaborative if it is created at different stages of the receiving area
as the constant flow of packages take place (Bettley et al., 2005).

The movement of information through real-time communications is one of the most important
aspects with handling material movement. The maintaining of a kanban board which allows team
members to see every three-piece of material movement at a given timeline creates a high level of
transparency (Gligor et al., 2014). It will also help for the movement of the materials from my
location to the other more smoothly as persons in every location has an idea of the upcoming
material movement as well as the down flow of material movement. Digital process through the
ERP with RFID tagging will help to achieve this. the following diagram is the process by which
the hospital can move to a single piece flow using the Kanban Methodology.

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 Figure 4.1 Single piece flow

Source- Authors Work

As it is indicated the material flow will be grouped at the loading dock and then separated taking
place so that it can go into the single piece flow of processing. The continuous flow of material
without any bottleneck backlog will move straight into package scanning and storage locations
and then can be easily located to the relevant department without a backlog.

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5.0 Conclusion

The analysis demonstrates that although the hospitals intention has been to save on time and
Resources using the batch oriented process it has had the reverse effect. This means that there can
be several instances where packaging movements are can be hindered even with the best of
intentions. The focus on creating a process that revolves around schedules and not around time
sensitivity has been the fundamental cause of this problem.

Movement away from batch oriented process has a higher degree of success to improve material
movement. However it is noted that there may be a higher consumption of human resources and
technical resources in the initial stages to reduce the backlog. Even though this would be a cost
for the hospital the overall benefit of not duplicating orders and paying excessive overtime will be
a substantial financial saving.

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