SCOR for Services

1. SCOR for Services Review and Call for SIG/TDSC Committee

2. Agenda • End-to-End? • SCOR Extensions • How to “Make” a Service • Speakers: Research & NeedThom Sloan, MBA, FACHEVice President of Business Development & Crystal Wilkinson, MSN, RN, CNS, CPHQ Sr. Health Services Consultant TMF Health Quality Institute • What is a SIG • Call to action 2007

3. Plan Source Return Return Deliver Return Return Return Return Return Return End-to-End • For a Computer, easy to understand… Make Deliver Source Make Deliver Source Deliver Make Source Customer’sCustomer Your Company Supplier Customer Suppliers’Supplier Internal or External Internal or External SCOR Model

4. source make deliver source make deliver source make deliver End-to-End: For a Hip Replacement? "Supplier" Source/Make/Deliver? Source/Make/Deliver? New Hip Surgical Theatre Anesthesia Physical Therapy Antibiotics Pre & Post-Surgery X-Rays

5. We have a Retail addition…

6. Research SCOR2 Framework This is a configured version of “SCOR for SCOR”, which “makes” SCM processes configured to meet business requirements, with equivalent “source”, “make” and “deliver” process steps… we know SCOR can be versioned for non-manufacturing activities

7. Initial Focus • Critical Issues • Intangibles • Mobile “Factories” • Knowledge and Skills as Raw Material • Location of activities: Make, MRO, Sourcing? • Planning – Labor Management criticality • High HR focus • Key Areas (for a start) • Financial Services • Healthcare • Security • Consulting • Legal, Financial, Engineering, Architecture, Accounting • Education • Government

8. Needs & Research Thom Sloan • 27 years experience in healthcare operations, marketing, product design, and evaluation • Currently VP of Business Development for TMF Health Quality Institute-Austin, TX • 20 years with the University of New Mexico Health Sciences Center as VP of Planning and Development • 4 years with California State University in health management and development • Author and speaker on marketing, business planning, health policy, finance, and economics • Cowboy and rodeo judge • thoms@tmf.org

9. Needs & Research Crystal Wilkinson • Celebrating her silver anniversary as a nurse • Currently a Senior Health Services Consultant in Business Development, TMF Health Quality Institute • Current work activities include consulting with healthcare organization on regulatory compliance, evaluation of the quality of care, peer review, and improving the efficiency and cost effectiveness of health care • Interests – how business theory and healthcare delivery processes intersect • crystalw@tmf.org

10. Why SCOR in U.S. Healthcare? • Healthcare represents 16% of the GDP or $1.877 trillion • 5,700 hospitals in U.S., 885,000 physicians, 2.4 million nurses • Reduced length of stay from 7.2 days in 1990 to 5.6 days in 2004 • U.S. ranking in health status has dropped from 23rd in 1990 to 28th in 2002 • Life expectancy is increasing from 71.8 and 78.8 years for men and women in 1990 to 75.2 and 80.4 years • Federal government pays for 32% of healthcare • Feds are encouraging adoption of electronic communications/records • Medical errors

11. External Motivators to Change • Capacity and efficiency issues • Decreasing reimbursement • Increasing numbers of uninsured • Customer service orientation as a way to secure market share • Electronic documentation and workflow challenges • Renewed focus on six sigma and LEAN concepts of QI • Old ways must change to remain fiscally viable.

12. Reduction in Variability • Healthcare is a highly complex series of interactions among related entities to provide a product of health • Patient is consumer, but patient does not determine need or make purchasing decisions • Physicians are consumers, but don’t pay the bill • Culture of medicine resists standardization • Payment mechanism does not encourage systems approach • Hospitals often address only segmented areas of systems in process improvement • Innovations and use of electronics, robotics as labor substitutes drives need for process documentation and improvement

13. Healthcare’s “Supply Chain” Method • Utilization management - focuses on planning, organizing, directing, and controlling the healthcare product to insure that cost effective, high quality care is provided while contributing to the overall goals of the institution • Assure appropriate services, appropriate setting, quality and cost-effectiveness of care along the care continuum Illness Wellness Admission Discharge Birth Death Healthcare continuum

14. Hip Replacement Process • Decision to replace hip, perform surgery • What facility? • What day • When can a OR suite, the surgeon, an anesthesiologist, an OR team and the patient all be scheduled? • Are all the materials available to perform the surgery? • Decision regarding joint hardware • Does the physician purchase and bring his own “favorite”? • Does the facility stock the physicians “favorite”? • Is the “favorite” the most recommended? • Is the “favorite” safe? • Decisions regarding pharmaceuticals • What to give, when to give, how to give, why to give etc.

15. Healthcare-Summary • There are many opportunities to truly optimize the performance of very, very large healthcare systems, cutting waste, cycle time, and improving cost effectiveness. • What it will take is looking holistically at the healthcare delivery system and adapting business process improvement and supply chain principles to creatively meet demands, reduce cost and decrease variation

16. SIG: Typical Mission • Identify appropriate use of SCOR in the SIG • Professional Education for SIG members • Identify SIG-specific SCOR customization • Identify SIG-specific best practices • Develop relationships between SIG companies • Prioritize or develop SCOR metrics for the SIG • Develop “hard” deliverables • Whitepapers • Reference Guides • Articles • Benchmark Data • Case Studies

17. SIG: Typical Activities • Conferences and meetings • Supply-Chain Operations Reference model (SCOR) development teams • SIG-specific SCOR Workshops • Benchmarking Studies • Surveys • Senior Executive Retreat • SCOR Technical Development projects • Internet web site • Web Casts • Speakers Bureau

18. Current and Past SIGs • Aerospace & Defense • New SCOR elements, metrics • Award Program • Collaboration Framework • Automotive • Industry Professional Education • eCommerce/SCOR and Automotive Industry • Chemical • Best Practices • SCOR use for Process Industry • Electronics • SCOR/Rosetta-Net Integration • Implementation Case Studies • Sig-Sigma/Lean • Whitepapers • Surveys • Training Program (Convergence) • Methodology Documentation • Retail (Past) • New SCOR Process elements & Metrics • Retail Best Practice Extensions

19. SIG Setup • Charter • Development • Approval by SCC Board • Membership • Open to SCC Members • Unlimited participation by SCC Member companies • Structure • Steering Body • Research Teams • Committees • Meetings • Monthly, Quarterly, Annually • At SCC Meetings, SCC Conferences

20. Next Steps • 5-10 Companies to participate • Practitioners mandatory for Board Approval • SCC Board Sponsor • SIG Kickoff • Goals and Objectives • Year Planning • Deliverables • Committees • SCC Visibility Globally

21. www.supply-chain.org jfrancis@supply-chain.org