Cardinal Health Inc : Cardinal Health Launches Lean Six Sigma-based Inventory Management Solution

DUBLIN, Ohio, Sept. 24, 2013 - Cardinal Health today unveiled its 2-Bin Kanban solution, an innovative approach to inventory management, at the Fall IDN Summit and Reverse Expo in Phoenix.

The Cardinal Health 2-Bin Kanban solution combines principles of the Lean Six Sigma managerial concept of improving business efficiency and effectiveness with proprietary, cloud-based software. It can replace expensive point-of-use systems, improve supply forecasting to prevent overstocking and stockouts, eliminate expired and obsolete supplies, and reduce clinical labor in materials handling.

"Cardinal Health is dedicated to delivering high-impact, long-term services to health care providers," said Steve Inacker, president Hospital Sales and Service at Cardinal Health, "and the 2-Bin Kanban solution is one more example of how we're engaged with them and innovating to meet their emerging demands."

How it works

In the 2-Bin Kanban solution, a nurse removes the last product from the front bin. The nurse then places the empty bin on a top shelf in the inventory area and pulls the rear bin forward. Materials management scans the empty bins to trigger replenishment and initiate orders. Materials Management restocks empty bins and transports the bins to patient floors. During the replenishment process, Materials Management inserts the restocked bin as a rear bin in the two-bin set-up to support a first-in, first-out inventory approach. The process then repeats.

The system's proprietary software "learns" from consumption patterns in real time and calculates correct bin quantities as changes in patient census, clinical practice and seasonal factors occur.  The system generates supply orders based on standard bin quantity.

Pilot yields success

In a recent pilot program, Bellevue Medical Center in Omaha, Nebraska achieved more than an 80 percent reduction in clinician time in the supply room and more than a 40 percent reduction in the time it took clinicians to obtain supplies. The institution also realized more than a 40 percent reduction in supply put-away time and more than a 60 percent reduction of inventory on hand. There was a 100 percent reduction of the cycle count function.

"If we attempted to go back to the old model, we would have a riot on our hands." said Brandon Quindt, former director of Support Services at Bellevue Medical Center. "They really like the fact that they can just grab and go and not tie up their day doing activities that aren't driving patient satisfaction.

A recently conducted clinician satisfaction survey at Bellevue reiterates the success of the Cardinal Health 2-Bin Kanban solution, with clinicians agreeing that the system as made their jobs easier by making it easier to locate supplies and enables clinicians to spend more time with patients. They further agreed that the Cardinal Health solution saves time and is preferable to the previous scanning system.

To learn more about the Cardinal Health 2-Bin Kanban solution or to view an instructional video, video testimonial, related infographics or a case study, visit cardinalhealth.com/2binkanban.

About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $101 billion health care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals, ambulatory surgery centers, clinical laboratories and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality. Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products and services to more than 100,000 locations each day and is also the industry-leading direct-to-home medical supplies distributor. The company is a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company operates the nation's largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Ranked #19 on the Fortune 500, Cardinal Health employs 34,000 people worldwide. More information about the company may be found at www.cardinalhealth.com and @CardinalHealth on Twitter.