With more than 438,000 SKUs to manage, Universal Health Services (King of Prussia, PA) - one of the nation's largest hospital management companies, was experiencing wide variation in products across the system, inconsistency in care delivery, inefficiencies in supply chain operations, and limited control over item master management.
To tackle these problems, UHS embarked on a partnership with Premier in early 2015 called the Accelerated Reduction in Item Variation (ARIV) project. An ASCEND collaborative member, UHS also used Premier's Supply and Service Line Analytics, and engaged with Clinical Performance Partners to identify and implement commodity product standardization and rationalization opportunities. The end goal was to reduce the number of SKUs in their materials management system in order to realize savings, improve quality of care across their facilities and put into place sustainable business practices that ensure appropriate product introduction while reducing variation.
In the end, through 48 different product category initiatives, UHS reduced their SKU count by 61,977 items and realized $5 million in savings through July 2017, just two years after launching the project. In addition to the savings realized, UHS has adopted many of the key process steps implemented during ARIV to enhance their value analysis processes and ensure that gains achieved are maintained.