Good Directions

Software Streamlines HME Deliveries

HomeCare Magazine February 1999

Here's a bulletin for my third-grade teacher: The shortest distance between two points can be a... software program.

That's what Carl Culver, director of Beaumont Hospitals' home medical equipment division, discovered. The program called Resources in Motion Management and developed by SaTech Inc., Bloomfield Hills, Michigan, is a routing and scheduling system designed to improve delivery efficiency - in this case, specifically for an HME provider.

This is software technology, but it's not rocket science. One of the most valuable aspects of the program simply provides exact directions for each delivery, saving drivers time otherwise wasted on wrong turns or rifling through city maps for drop-off points that might not even exist.

"You'd be amazed how many patients don't know where they live, or at least can't give accurate directions to get you there," says Culver, whose hospital is in Royal Oak, Michigan. "Among other things, this program gives specific directions to get from one delivery to the next. You can choose from written directions or a detailed map charting the course."

The program digests data involving each day's scheduled deliveries and provides the most efficient start-to-finish routes for each pairing of driver and vehicle. It takes into account updated road, weather and traffic conditions, and chooses "drive-able roads" matched to each vehicle.

Tom Brisse, assistant hospital director who oversaw the software implementation, says employees initially resisted the change, but are gradually recognizing the benefits. "We're not trying to rock their world. We're just trying to get more production for our money," Brisse says. "As the workers gain confidence in the product, we will be able to customize it and reap added benefits. Right now, there's still some challenging of the system."

Culver said the system has contributed to his home care division being able to deliver $1 million worth of additional equipment in 1998 without adding a vehicle or driver from the previous year's fleet of eight. "We've enjoyed an immediate payoff of about 20 percent in productivity," Culver says. "Now, we're cutting back on the hiring of couriers and FedEx and UPS. We're still tweaking it, but overall, we're excited about it."

That's the kind of testimonial Joseph Sadler loves to hear. He's director of marketing for SaTech, which provided other division of Beaumont with similar products, but is debuting in HME circles.

"Many HME companies focus on the front end, but we say it's just as important to tackle the delivery costs, because the providers are not reimbursed for them," Sadler says. "Our product minimizes the amount of outsourcing that's necessary, it tackles overtime expenses, and it maximizes capital equipment."

The system's monthly fee ranges from $1,000 to $3,000 and Sadler says it's cost-effective for five or more vehicles. Culver's department did roughly $7 million in sales in 1998 and has 30 employees. He said the hospital hopes to trim the $500,000 annual budget for mileage reimbursements by using a similar system for the skilled nursing division.

"It behooves everyone in this industry to better utilize resources and be more efficient, so you get the job done in a more orderly fashion," Culver says. "Our hospital is proactive on technology. It understands there's an investment, but you can see the efficiencies."

"The program that has rung the loudest for me and is blowing my competition away when it comes to efficiencies in routing is the one that is offered by SaTech Logistics.
"...after better than two years of experience with SaTech, the benefits have been ten fold at a miniumum."
Director of Operations
Midwest Dairy Distributor
"A 14% reduction in just 6 months..."
"Efficiencies aside, we have also taken a manual task that used to take up to 90 minutes to perform down to a task of no more than 5-10 minutes."
Director, Materials Distribution
East Coast Utility Company