Besides providing the population with healthcare, Grupo Hospitalar Conceição is also dedicated to fostering education and research, thus becoming a center of knowledge and people training for SUS. To reach our mission of developing full healthcare actions with organizational excellence and efficacy, our group employs technological and human resources and education and research programs.
One of our strategic processes is the supply and service procurement process used by the entire hospital complex. At GHC, purchases are made according to Law 8666/93, which regulates the acquisitions of goods and service and construction contracts by entities making use of public funds in Brazil.
The instances of this process used to be manually controlled and could take up to 3.5 months to complete, depending on the type of purchase. Some of the difficulties found in that work format are highlighted below:
- Lack of systematization and standardization of all stages involved in the process;
- Difficulty to trace information related to processes underway;
- Slow process execution;
- Difficulty to make process-related information publicly available, a principle set forth by Law 8666/93;
- High costs related to storage and physical transportation of process-related documents.
To solve those issues, our group adopted BPM (Business Process Management) technical and management principles in the course of an implementation process that lasted approximately 12 months between 2009 and 2010. The work was carried out by an outside consulting firm along with the team in charge of the procurement process at GHC.
It was decided that the process flow would be designed by those involved along with outside support; therefore, in the initial phase of the project several workshops were held with the work groups; in such workshops the process was reviewed, redesigned, and in later phases, automated. That way, the cultural and technological bases were created to set up a new management approach focused on operating quality and efficiency.
Optimizing the process allowed us to cut execution time by 20% to 70%, according to the type of purchase. Additionally, the automated process afforded monthly savings in the amount of BRL 10,000 right in the first months after the process was automated, besides eliminating the use of paper. The application was based on the BPMS Orquestra BPM, by Brazilian company Cryo Technologies. Such BPM application allows us to trace and monitor the entire process cycle, making it possible not only to optimize costs but also to make information transparent.
The procurement process involves the phases of purchase requests by GHC departments, market research, legal opinions, budget and financial clearances, publication of the purchase public notice, receipt and review of proposals from potential suppliers, supply authorizations, contracts, and monitoring the delivery of materials and services provided. All those procedures used to be carried out manually, involved many people, and required large amounts of resources such as time and paper.
Excessive efforts were required to manage and control the instances in this process, considering there were no standards for carrying out the activities and that the information was decentralized, under the responsibility of each department involved in the process. Those issues made it impossible to supply precise information and provide transparent services to clients in an effective manner.
Also, it was difficult to control the history of processes and to define and monitor performance indicators, which made it hard to manage the work and carry out improvement actions. However, in public service, one of the ever-pressing issues regards compliance with deadlines and fulfillment of its activities. Therefore, implementing the BPM technical principles has made it possible to identify all the deadlines of the tasks involved and control and monitor them.
The Key Motivations
Grupo Hospitalar Conceição is under the great responsibility of providing healthcare services to the Rio Grande do Sul population because we are the largest hospital complex in the state and dedicate 100% of our services to patients of Sistema Único de Saúde – SUS (the public healthcare system). The purpose of our management and knowledge-generating actions is to turn them into a benchmark for SUS services, and consequently a benchmark for the other hospitals that also provide health services through this healthcare system.
The monetary volume of GHC purchases is close to BRL 150 million a year. The procurement process is responsible for purchasing all the materials and services required by our hospital complex’s units. Such units include four hospitals dedicated to general and emergency, pediatric, and physical trauma care, besides services specific for women.
Some of the goals for implementing BPM technical and management principles are highlighted below:
- Systematize and standardize all the tasks involved in the procurement process;
- Shorten the deadlines involved in the procurement process and expedite the work;
- Make the process more transparent for the population, according to the legal principle of publicly supplying procurement-related information set forth by Federal law 8666/93;
- Make the procurement process fully traceable;
- Decrease the costs inherent to each purchase and ensure greater environmental sustainability by cutting back on the use of paper.
The Key Innovations
Public management, especially in terms of its resources, is seen across the world as a vital factor to increase the efficiency of governmental actions serving the population. The adoption of BPM by GHC has made it possible to optimize and automate our procurement process, actions which are still restricted to few public institutions in Brazil. It has also given us greater ability to generate results for the population, be transparent, and make improvements that positively impact the environment by eliminating the use of paper.
While the project was being carried out, there were great efforts to get all those involved in the process engaged in the stages of flow chart review and redesign. We were able to see everyone’s motivation and commitment to pursuing our goals to standardize and improve our procurement process.
It is a strategic process for GHC, at the same time relatively complex and comprehensive, given it includes activities ranging from the request to the receipt of materials, besides involving several of our hospital group’s departments responsible for, for instance, planning the purchases, managing the materials, managing the contracts, clearing budgets and financial issues, and legal matters. The participation of most of the operating team was essential to improve the quality of team work and get everyone committed to our organization’s strategic plans.
The procurement procedures adopted by GHC were identified, analyzed, optimized, and automated on an online BPM application. The online BPMS software allowed those involved to access the process, receive and carry out activities, and monitor reports via the Internet.
The procurement process was originally performed manually and the forms and documents related to each purchase were physically processed at GHC. Transporting documents from one unit to the other used to take one day, on average, and considering such transportation could take place several times while the process was underway it took a long time to complete a purchase.
Besides requiring too much time and too many human resources, the process used up a large amount of paper. Using paper considerably helped increase the costs associated with each purchase process and negatively impacted the environment.
After the mapping, we were able to identify 700 activities that were then optimized or excluded after the processes were reviewed and modeled so the process could be implemented in the BPMS. Today, the set of processes comprises 566 human activities. The procurement macro process was split into three processes, according to the type of purchase (Price Registration, Tender, Exemption and Unenforceability).
- Flow of Adherence to another institution’s Price Registration;
- Flow of Procurement via Exemption/Unenforceability;
- Flow of Procurement via Tender.
Figure 1 Diagram of the initial part of the Flow of Procurement via Tender.
Now that the technology platform has been implemented, the procurement process for each type of purchase is requested via an electronic form by those responsible for the Materials Management department. They concentrate all the needs for materials and services and are in charge of organizing and prioritizing such needs before they start each one of the three processes mentioned above.
All the documents that used to be printed out are now attached to such electronic form in all stages of the automated processes. In other words, emails containing requests for materials, certificates from suppliers, and market research files, for instance, are now digitally sent to the other people involved in the process activities. Once a request is submitted, the GHC team immediately starts analyzing the information.
Figure 2: Electronic form requesting the Flow of Adherence to another institution’s Price Registration
Those involved in the processes receive and perform activities via a simple, intuitive interface that highlights the list of pending activities. As defined in the process design, each instance started will proceed along a sequence of activities automatically sent to those in charge, who will have deadlines to complete them.
Figure 3 List of tasks to be performed by a process player.
The BPM implementation project allowed us to generate knowledge and conduct our management through a systemic view of the procurement process. Through the flowcharts defined for the material and service procurement processes we were able to detect improvement opportunities and optimize the activities and procedures involved.
Using the BPMS has significantly decreased the number of manual operations and allowed the GHC team to have greater control of and monitor the performance of process instances. It has also made it possible for the population and audit agencies to view the information, which resulted in greater transparency for the services we provide to society.
Since the project was completed in 2010, over 2560 processes involving more than 300 GHC employees have been carried out. Such executions are now monitored through the process execution average time indicator, which has shown a decrease of up to 70%.
While the project was being carried out, we came across a few challenges on our way to reaching the goals we had set, as follows:
Lack of Knowledge regarding the Procurement Process
In the early stages of project development, the procurement process was yet to be defined and standardized by GHC. So, the flowchart was designed with help from the people involved in the process.
Starting from the initial work flow generated and a first optimization cycle, said flowchart was implemented and today is adjusted following continued improvement cycles.
Some people involved in the process operating activities resisted the implementation of the project. They opposed some changes that were to be implemented in the way they used to do their activities and operations.
To overcome such hurdles, we tried to get as many people as possible engaged in helping design the process and collectively put together the work flows to be automated on the BPMS. That action got those involved in the process committed to the project and has ensured it is properly put into operation every day after it was implemented.
Adoption by the Organization
Another challenge we faced was getting GHC employees to adopt new software after having spent years performing their work manually. Training sessions were held to educate BPMS users on its application.
The success of the project and of the BPMS implementation was also largely influenced by the constant support from the institution’s senior management and the existence of a permanent planning and implementation team assigned to the project and to supply the IT infrastructure resources necessary to accommodate the new work format.
Lower Costs and Increased Earnings
Because we are a public institution that provides healthcare services to Brazilians, increasing our earnings is not among our goals. Our focus is on providing complete healthcare with excellence, on the efficiency and efficacy of our strategic processes, and on shortening the time it takes us to cater to our inner and outside clients.
Nevertheless, given our commitment to sustainable development, our hospital group monitors the cost indicator related to the use of paper in our manually performed processes: since the BPM system-featuring procurement process was implemented, we have been saving approximately BRL 10,000 a month. By decreasing the use of paper, we have also cut back on print-outs and on the use of ink cartridges.
It is also fair to assume that, by eliminating procurement processes processed physically, we have cut costs associated to their transportation and storage. Likewise, the optimized work flow and fewer errors and less rework have positively impacted the costs associated to the process.
One of the project’s goals included shortening the time to complete procurement process instances so as to allow GHC to more swiftly meet our units’ and departments’ needs in terms of goods and service acquisition.
By using the Flow of Procurement via Exemption/Unenforceability we have found the average time to complete the procurement process via the Exemption mode has decreased by approximately 70%. Regarding tender-based purchases, completed through the Flow of Procurement via Tender, we have found a decrease of approximately 22.5%.
After the procurement process was automated, GHC employees that perform activities in this process have seen their work gain in productivity. The BPM system automatically forwards the activit es defined in the procurement macro process flows to those responsible for them, who have defined deadlines to complete them.
We have seen a considerable drop in the need for rework and also the elimination of actions replaced with automated BPMS tasks, such as emailing and exchanging documents between our institution’s departments. Consequently, after the project was completed, the GHC team has been able to dedicate a larger portion of their time to actions that continuously improve the process. Problems related to procurement process traceability and information transparency have also been solved.
Best Practices, Learning Points and Pitfalls
Best Practices and Learning Opportunities
Some of the best practices identified in the project that implemented BPM technical and management principles into the GHC procurement process are listed below:
- Understanding the expectations of the people involved in the BPM implementation project, clearly stating the goals we wish to reach and how important cooperation is for us to achieve good results;
- Getting all those involved in the process to participate in the early phases of the mapping project. Their input was essential to define the work flow, and their involvement minimized hurdles related to project opposition;
- The senior management’s support for the project to be carried out, which especially helps overcome the initial resistance and cultural barriers.
- The main pitfall we found was the lack of a deadline set for GHC to adopt automated flows at 100% of our procurement processes. Consequently, in the first few months, while the process was carried out via the BPMS, some instances were still being physically processed at the institution.
- Therefore, setting deadlines for the adoption of changes resulting from the BPM implementation project is seen as a lesson learned for future projects.
The project implementation and the use of process automation software represent an innovative initiative for the Brazilian public management, given that such practices are adopted by only a handful of public institutions. Additionally, because of GHC’s great reputation in terms of catering to the population via SUS, our initiatives may become a benchmark for the other Brazilian hospitals.
Another advantage lies in how society sees the services provided by our hospital complex. Today, the information related to the instances of our procurement process is available to all those who wish to view it, which enables transparent public management.
By analyzing performance indicators, we have been able to see more efficient management in our everyday operations. After the project was completed, tracing and monitoring the procurement process have become permanent operations, and so has carrying out continuous improvement actions.
Long-Term Plans to Sustain the Competitive Advantages
The GHC team continuously identifies opportunities to improve the procedures related to procuring goods and services and optimizing the process. Therefore, in order to sustain the competitive advantages obtained from the project, continuous improvement cycles are going to be carried out.
There is also the possibility of taking BPM practices into the other strategic processes at GHC, all the while following the best practices and lessons learned in this project.
The Orquestra BPM tool from Brazilian company Cryo Technologies was chosen to automate the procurement macro process flows. Some of the reasons for choosing this BPMS are highlighted below:
- Geographical proximity to the manufacturer;
- Product focused on human, collaborative processes;
- Support for human and computer activities;
- Report generation and performance indicator updates;
- Simple, intuitive interface.
Regarding the hardware and software features used to put the solution together, such information is provided below:
|OS||Windows||2008 R2 Standard|
|BD||SQL Server||2008 R2 Standard|
|Processor|| Dual Processor: Dual-Core AMD Opteron Processor |
2218 HE 2.60 Ghz
The Technology and Service Providers
The consulting firm hired to implement the project was H&R Consultores, a company specializing in Organizational Management and Business Process Management catering to companies and government agencies. H&R Consultores is a partner company of Cryo Technologies, the supplier of the BPMS we use.
Copyright: This case study was originally published in the Excellence in Practice series in the book entitled “Delivering Competitive Advantage” published by Future Strategies Inc. ©