LUM model at Concord Hospital sees performance boost through automated demand capture solution at the point-of-use

Concord Hospital, a regional medical center, is one of the busiest acute care hospitals in New Hampshire, with 295 licensed beds and 230 staffed beds. For 12 consecutive years, Concord Hospital has been recognized as one of the “most wired” medical facilities in the U.S. by Hospitals and Health Networks magazine, the journal of the American Hospital Association.

Rigorous advocacy for Lean methodologies and efficiency through innovation prompted adoption of a Low-Unit-of-Measure (LUM) model for supply replenishment, but in order to effectively manage Just-in-Time (JIT) inventory levels, Concord Hospital sought to improve demand capture at the point-of-use, as well as data availability for its LUM provider.



  • Clinical involvement in supply-related activities
  • Labor-intensive demand capture rounds
  • Elevated inventory levels despite LUM model
  • Lack of real-time visibility for JIT inventory management
  • Insufficient storage capacity resulting in poorly organized inventory environment and loss due to expiry


  • Transfer logistics activities from clinical personnel to materials management personnel
  • Automate demand capture at the point-of-use to reduce manual processes and enable data-driven inventory level optimization
  • Provide real-time statistics and tools for improved JIT management
  • Improve layout ergonomics and product accessibility while reducing physical footprint
  • Integrate product rotation workflows for supply expiry avoidance


2BIN-iD environment

A total of 28 locations were identified as the highest impact areas for initial implementation of 2BIN-iD, an RFID-enabled two-bin replenishment solution designed to facilitate just-in-time (JIT)





OR, Day Surgery, Central Sterile



Cath Lab, Radiology, PACU



ICU, Emergency


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“Going stockless means you are 100% reliant on consistent and accurate demand conveyance to your LUM provider. What is a very cumbersome process to do manually, 2BIN-iD does effortlessly"






reduction in clinical time spent on supply requisitions

The implementation of 2BIN-iD improved inventory availability for general supplies, reducing clinical time spent on supply-related requisition activities by 37%, as well as lowering the number of requisitions by 27%. These reductions will increase as subsequent phases are implemented to alleviate clinical personnel of their supply-related responsibilities in managing consignment and high-value items, both beyond the scope of this initial project*.


footprint recovery and 7% storage capacity increase

Implementation of 2BIN-iD with vertical high density storage reduced storage space by 22.8%, while affording a storage capacity increase of 7%. The new physical layout and ergonomics provide a well-organized inventory, fixed supply locations, and a visual location system aligned with workflows and clinical procedures. As a result, clinical personnel spend less time searching for and collecting supplies.

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reduction in materials management time spent on supply replenishment

Despite the additional replenishment tasks transferred to them, materials management is able to increase service levels by virtue of the automation inherent in 2BIN-iD, which recovers 53% of the time previously spent on supply replenishment. Time-consuming and error-prone inventory demand capture rounds have been completely eliminated, and time spent on put-away processes has been reduced by 29%, enabling materials management to focus on replenishing departments efficiently and accurately, based on real-time consumption statistics.


reduction in on-hand inventory value

Immediately prior to implementation of 2BIN-iD, Concord Hospital conducted an aggressive inventory reduction exercise; an initiative aimed at rendering its LUM program as lean as possible by culling excess inventory. It was determined that this exercise eliminated approximately 6% of the total inventory value. The data accuracy that 2BIN-iD provides, the automated information exchanges, and a reengineered layout, allowed Concord Hospital to achieve an additional 13% reduction in inventory value, despite including 4.7% more SKUs in its ‘after’ analysis.


decrease in stock wastage costs

Product shrinkage or wastage is usually caused by expired, damaged or obsolete products, representing up to 8% of the total distributed volume of supplies, primarily due to excess inventory, slow turns and inferior top-up put-away practices. Because 2BIN-iD facilitates just-in-time inventory management, hospitals need only carry optimal levels of inventory, while the built-in stock rotation feature further reduces the risk of products going to waste. It is estimated that the new system has the capability to reduce this shrinkage rate to 3%, representing a 63% reduction in loss due to waste.


real-time statistics

Critical to the success of its LUM program, Concord Hospital benefited immensely from the fully customizable business rule settings and reporting engine. In addition to continuous optimization tools that will guide future optimization opportunities, 2BIN-iD automatically generates requisition orders deliverable to Concord Hospital’s LUM provider for seamless JIT inventory management. Automated response decisions keep reliance on manual processes to a minimum, while compiled consumption data provide key performance indicators to enable informed decision-making.

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