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Northwestern Memorial Hospital Smoothing Material Flow Through The Receiving Area Case Solution

Solution Id Length Case Author Case Publisher
1807 837 Words (3 Pages) John P. McNicholas, Hussam Bachour, Paul Suett Ivey Publishing : W19168
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Northwestern Memorial Hospital is facing a huge problem with regards to inventory accumulation. The hospital has a receiving area which, as a result of a slow processing time, has become a warehouse of sorts which has items amounting to millions of dollars pile around waiting to be cleared and delivered to their rightful places. The new supply chain performance manager, Paul Suett, has his work cut out for him. The current internal supply chain is haphazard and complex which slows the flow of resources down and results in a crowded receiving area. All orders are processed through the ERP (enterprise resource planning) and are kept a record of through the EDI (electronic database interchange). Despite these innovations the processing remains a tedious and long process which leads to the practice of the staff ordering items well in advancing, compounding the problem even further.

Case Analysis for Northwestern Memorial Hospital Smoothing Material Flow Through The Receiving Area

The flow of materials and supplies for a hospital need to be fast and accurate. Yet at NMH the situation is bad. The lack of efficiency is resulting in a financial burden. Securing the receiving area, which should ideally be for getting the packages and instantly dispatching them onwards to their destinations, is important as it contains hundreds of packages worth a lot of money. The entire process can be improved and cost saving can be achieved by streamlining the entire process and reducing the glut of packages at the receiving area. 

The first step should be to identify the steps that are a source of inefficiency. Suett developed a kaizen team effort to identify the problem areas. Observing the entire process from start to finish helped to highlight the issues. The dock team was overworked and had to deal with multiple deliveries in quick succession leading to the stockpiling issue as well as an increase in mistakes. The problem of spoilt deliveries due to long lead time and failure of the system to sort out the items requiring refrigeration also was a huge problem. Another source of the slow process was the slow movement of the pallets as each had to be filled up completely for it to move. Once in the receiving area, workers were instructed to place packages anywhere they could find space. This lack of organization created a messy store which again resulted in wasted time spent on looking for each package and identifying its destination. Furthermore, in the receiving area workers wasted time going back and forth between their workstations and the inventory in a random manner. Since the packages were kept without any organization workers spent time moving about looking for packages to be cleared and delivered. Loading the package onto the pallet resulted in the most waste. Due to these wasteful activities staff ordering the items usually had to wait more then 24 hours to receive the items they ordered, and it was also not uncommon for them to get an incorrect delivery. In fact, the average delivery time was three days, which is quite high. 

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