Hardy
Hospital
Within the State University
Introduction & Background:
Caroline Highgrove, Director of Materials Management, glanced at the papers spread
across her desk, wondering where the week had gone. On Monday, the Director of
University Operations, Drew Paris, had asked Caroline to look into the purchasing and
supplies system for the hospital. Drew specifically wanted Caroline to evaluate the current
materials-management system, identify ways to reduce costs, and recommend a final
plan of action. Drew explained the university was under pressure to cut expenses and
hospital inventory did not seem to be under control.
As Caroline reviewed her notes, she was struck by the variations in order sizes and order
frequencies for the hospitals Stock Keeping Units (SKU’s). For some SKU’s, inventory
ran out before new orders came in, while for other SKU’s excessively high stock levels
were being carried. The university and hospital’s computerized materials-management
system was about a decade old and generally worked well; however, employees often
ignored, or did not update, key information. Thus, data integrity was a major problem in
this information system.
