A few years ago, we realized that our surgery center, Glasgow Medical Center in Newark, Del., despite all its successes, had one flaw that was costing us time, money and manpower: our surgical supply-ordering system.

Six RNs were involved in various aspects of ordering supplies for their specialties, yet no one was coordinating the whole process. Money was slipping through our fingers because no one had the time to routinely compare prices, root out discounts and work closely with staff to identify savings in ordering and inventory processes.

A welcome growth spurt in the number of cases we scheduled just made matters worse. Glasgow is a 13,000-square-foot facility, with four ORs and two procedure rooms. Volume has almost doubled in the past few years as more doctors in new specialties arrived. That meant the supply system was even harder to coordinate and yet more potential savings were being lost, an unacceptable prospect at a time of tightening reimbursements.

At a large hospital, the obvious answer would be to hire a materials manager. But few surgery centers have this position, even though many of them - including our own - really do need one person to bring the whole system together.

No more pain, no more drain
A good materials manager is a combination traffic cop, overseeing the flow of supplies, gumshoe detective, ferreting out the best deals for her facility, and savvy shopper, working with vendors to get the lowest price possible.

I had been a materials manager at a large acute-care hospital and understood the value of the position. I documented our problem and was able to convince our leadership that we needed to upgrade our supply system by hiring a materials manager. At that time, supply levels for thousands of items were recorded in three or four different spiral notebooks, which were worn and dog-eared from constant thumbing.

On a notebook page, it's hard to keep running totals of each supply item and compare them to a par level, which is what the optimum number should be for each item. For example, you can have six catheters costing $1,000 each on the shelf, but if you only need a par level of four, you are wasting $2,000 right there. Without a materials manager, our busy staff simply didn't have the time to establish par levels for all but a few products.

Our staff also didn't have the time to sit down and compare competing prices from different vendors and figure out which product is truly the best for us, as a materials manager does. We also were failing to get the extra discounts vendors give for on-time payments because we hadn't been getting the deadlines to our folks in accounting. Everybody was just too busy.

A new post for the organization
I got the go-ahead to hire our first materials manager for three days a week. For the first time, we would have someone who has the time to coordinate selection and ordering of supplies, manage contracts with our vendors and compare prices.

Linda MacGaffin, RN, BSN, started in the position in May 2003. She works four 10-hour days at our center - three in her position as materials manager and one at her old job in the OR. Her office is in the non-sterile supply room, her desk surrounded by boxes of supplies. At our monthly staff meetings, Linda updates us all about new purchases, changes in product lines, equipment and supply trials and cost savings. We all benefit from this kind of consistent communication.

Her previous work as a surgery nurse at Glasgow was a tremendous asset. It meant that she could knowledgably compare products from vendors and readily understand the needs of our physicians and staff.

Linda is a self-starter. Although she didn't get formal training, she asked a lot of questions. She still calls me when she runs into a problem. Of course, most ASCs don't have someone experienced with materials management, but it isn't hard to link up with consultants and attend seminars.

Controlling supplies would have been nearly impossible if we hadn't moved from the spiral notebooks to recently purchased AdvantX computer software from Source Medical in Birmingham, Ala., which we also use for scheduling. The new system puts all the information at our fingertips. It's much easier to scroll down a screen than to thumb through a notebook.

It took about 10 staff members a month of evening and weekend work to input 23,000 separate supplies into the computer as well as build doctors' preference cards.

The software keeps a running total of our supplies. Here's how. At the end of the day, each circulating nurse logs on to the computer and depletes from the electronic inventory all of the items that she used that day. This gives us greater control over our inventory and lets us price out the supply cost of each case.

Introducing key efficiencies
Nurses in some specialty fields still do some ordering, but Linda coordinates a large portion of the supply system and tackles issues that never got much attention before.

She's working closely with staff to come up with par levels and loading them into the computer so that they can be compared with actual counts. We encouraged staff to think hard about how many supplies they really needed and to establish tight par levels for many items.

Linda also finds items that we should send back to the vendor because they were overstocked or are no longer used. For example, she noticed that no one was using a particular hernia patch. When we sent the items back, we received our money back minus a 30 percent restock fee.

Linda finds the time to surf the net, phone vendors and whittle prices down. In a major coup last December, we saved $30,000 in the purchase of a video tower for the OR. The company was unloading last year's model and sales reps were willing to slash prices to meet their sales quotas. Knowing these things pays off.

Of course, just because you find a less expensive product doesn't mean your physicians and staff will accept it. That's where Linda's relationships with staff in the OR can help. She often asks them to just try one case of a new product and see if they like it. And when manufacturers change product packaging, she informs the staff of these subtle changes before they go into surgery and assures them the product hasn't changed just the packaging.

Our supply system also depends heavily on physician and staff support. For example, they tell us when stocks are running low either by leaving Linda a voicemail or by writing notes on four erasable boards in different parts of the facility, which Linda and the other staff who order supplies check regularly. It is only through communication and the support of the staff that Linda is able to do this job.

Some of the savings we reap aren't immediately tangible, such as persuading vendors to extend warranties from one year to two. Others are win-win situations with an immediate payback, such as when we went from paper to cloth gowns. We saved 65 percent on the cloth, and our patients and staff were happier, too.

Making sure savings don't slip away
With a materials manager in place, we are picking up savings that used to slip away.

We make sure that we get extra payments as a reward for on-time payments, which can be as high as $245 a month, by enacting a three-day limit to turn around invoices.

In another case, our group purchasing organization, MedAssets, based in Alpharetta, Ga., negotiates discounts for us. We then have to make sure that the manufacturer is giving us the discounts that MedAssets negotiated. But due to lack of coordination, that wasn't always done. By routinely comparing the price on the vendor's bill with the price stated in the contract, we found that we had not been receiving contract pricing. So, for example, we were overpaying for sutures by 60 percent. We have since rectified the issue.

Surgery centers with busy staffs would probably want to work through a distributor that can provide a long list of items from many different manufacturers. But with more time for research, Linda found bigger discounts - saving 13 percent to 18 percent, in some cases - by buying direct from the manufacturer.

As a result of these actions, we identified at least $41,000 in savings just in the first eight months of Linda's work, from May to December 2003. In addition to the $30,000 saved in the video tower purchase, we saved $11,000 in measures such as buying the cloth gowns and getting the discount for the sutures.

Off to a great start
We haven't put a price tag on other improvements, such as from having fewer overstocked items on the shelves and a more smoothly functioning supply system.

We can also point with pride to some basic changes in how we operate. We have, among other things, established a consistent communications and reporting mechanism with the materials manager, maintained a positive and consistent working relationship with our vendors and reduced inventory to a workable minimum par level.

That's a good start. We expect to be introducing more improvements as we work out the details of our new supply system.